Opto-electronics bets on low cost
With the help of a $1.6 million government grant, AT&T Bell Laboratories in Murray Hill, NJ, and Teterboro, NJ-based Allied Signal are working together to develop low-cost opto-electronic modules that will be used in commercial and military applications.
The goal of the research and development effort by the partnership is to integrate such opto-electronic components as lasers, detectors and power splitters into the same packaging framework at 10% of current costs.
"The packaging of individual opto-electronic components currently dominates product cost in excess of 50%," says Philip Anthony, head of the passive optical component research department at AT&T Bell Labs. He also notes that the high price of these non-integrated, discrete components currently limits their applications in the marketplace.
The two-year project, which got underway last June, received matching funds from the Advanced Research Projects Agency`s Technology Reinvestment Program, a government agency. ARPA pursues the expansion of defense-related technology into the commercial marketplace.
In their businesses, AT&T uses a variety of opto-electronic components for fiber-optic telecommunications applications, whereas Allied Signal employs customized opto-electronic components for optical gyroscopes used in military applications. By combining their respective expertise, AT&T will enhance its existing opto-electronic module technology and integrate Allied-designed electronic components with AT&T photonic devices into prototype AT&T opto-electronic packages.
Lower cost opto-electronic components are the key to expanding market opportunities in the global communications market. In North America alone, consumption of fiber-optic opto-electronic components was $1.06 billion in 1993, according to Electronicast Corp., a market-research consultancy based in San Mateo, CA. By 1998, the market is expected to reach $2.03 billion, a growth rate of 14% per year.
Furthermore, Electronicast reports that during 1998 to 2003, the consumption value growth will accelerate at an average annual rate of 27% to reach $6.66 billion. "This period will be characterized by rapidly rising quantity growth and rapidly falling average prices," says Stephen Montgomery, vice president for marketing at Electronicast.
Fiber optics technology represents the latest advance in optical gyroscopes. Implementing optical fiber has lowered costs and improved reliability. "Fiber-optic gyroscopes are less susceptible to the shock and stress they`re put under in some military applications," says Don Siebert, manager for electro-optics and fiber-optic gyro design at Allied Signal.
The new integrated opto-electronic modules are expected to be used in low-grade gyroscopes, such as rate-grade gyros, for platform stabilization applications in military tanks and smart munitions, for example, as well as in tactical gyros.
Allied Signal is also exploring new market opportunities for the volume production, lower cost rate gyros in commercial applications. In automobiles, for example, rate-grade gyros can be used for course navigation, ride stabilization and global positioning systems that will allow drivers to access map information located on the dashboard. "Customers won`t pay hundreds of dollars for these types of bells and whistles, but lower-cost rate gyros could bring this type of technology to market at a price they are willing to pay," says Siebert.
The ARPA award has enabled two industry giants to share their technical strengths and has activated a partnership that Siebert claims "wouldn`t have otherwise happened."
AT&T is hedging its bets that the advent of low-cost opto-electronic components will be the company`s foot in the door to the projected billion-dollar residential digital communication services market. Already a provider of high-bandwidth telecommunication solutions to the business community, AT&T hopes that low-cost opto-electronic components will provide an inexpensive way to bring fiber network applications, such as video- on-demand, data and voice, to the more price-sensitive home market.
The local exchange market was worth $90 billion in revenues in 1993 and according to the Federal Communications Commission, is expected to reach $150 billion by the turn of the century.
Many types of competitors, including local and long-distance carriers, independent telecommunications providers, cable-TV companies and utility companies, are all vying for a piece of the booming residential digital communications market. They all agree that the breakthrough is providing the high-speed connection from the fiber backbone loop to the home at reasonable cost. q
Lynn Haber is a freelance writer based in Boston.