Medium-term 'tea leaves' looking up

By Matthew Peach

Whatever is happening out there, market analysts never tire from cutting and dicing the figures and inspecting the metaphorical fortune teller's "tea leaves".

Global use of Optical Fibre Amplifier Gain Blocks will grow from an annual sale value of USD1.2bn (2002) to USD2.5bn by 2006, says ElectroniCast. Company president Stephen Montgomery said, "OFGB consumption is dominated by 1550nm EDFA types. Telecommunications applications leads in OFA use. However, private data communications, cable TV, military and test and measurement will provide opportunities for both component and system suppliers."

Electronicast also predicts that global consumption value of the Optical Modulator market will increase at 38% per year over the next five years, from USD266m in 2002 to USD1.3bn in 2007. And by 2012, the value will exceed USD3bn, the report adds. By this time market dominance will have switched from North America (40% share in 2002) to the Japan/Pacific region, which will take on that exact market share.

Sales of Optical Switching devices will grow at an annual rate of 24% between 2003 and 2006, says analyst Communications Industry Researchers Inc (CIR). However, switching manufacturers' success will depend heavily on its technology choices. CIR says that, for the next few years, the fastest growing markets for optical switching devices will be those with "conventional" technology.

The best bet is in O-E-O switching subsystems, driven mostly by the need for OEO cross-connects in the public network. There will be a renaissance of liquid crystal technology in reconfigurable OADMs.

CIR says that there will be significant new revenue opportunities generated from improving on older optical switching technologies in the next two years, while traditional technologies will decline.

The Metropolitan Ethernet Equipment market will grow from USD837m in 2002 to USD4.4bn by end-2007 (with 39% CAGR), says IDC. "The metro Ethernet market is an enormous opportunity," says Sterling Perrin, senior research analyst. "Revenue and growth will be substantial and should attract the attention of any large telecommunications and networking suppliers looking for growth."

IDC believes that, by 2007, more than 60% of revenue will come from Asia/Pacific. Contributing to revenue will be a mix of optical and datacom equipment, including metro DWDM, SONET/SDH MSPPs, layer 2/3 switches and routers.

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