Total OADM market to surpass $1 billion by 2006

The market for optical add/drop multiplexers (OADMs) will experience steady growth from 2002 to 2006, reaching a market value of $1 billion by the end of the forecast period, claims a new report by KMI Research (Providence). This growth rate will outpace growth in the DWDM market, propelled by larger numbers of OADMs being deployed per DWDM system, deployments of OADMs to upgrade existing systems, and the impact of larger average channel counts in DWDM networks.

Most of the growth in the OADM market will come from the emergence of reconfigurable OADMs, though fixed OADMs—already available on the market—will continue to experience growing demand. "Many of the reconfigurable OADMs will be ideally suited for metro applications, where dynamic wavelength management capabilities will be most needed," says KMI analyst Michael Arden. "As a result, OADM demand generated by metro applications will grow faster than long-haul and enterprise-segment demand." The deployment of OADMs in the metro will be propelled by an increased use of DWDM in the segment. Many of today's networks feature less intelligence in the backbone core network; wavelength management is conducted in the metro space, which creates a demand for equipment like OADMs with dynamic capabilities.

Fixed OADMs will continue to compose the majority of long-haul OADM deployments, though there will be some need for reconfigurable OADMs in long-haul. The deployment of long-haul units should experience a compound annual growth rate (CAGR) of 48%, say analysts, which compares to an overall OADM unit CAGR of 57% and a metro-specific growth rate of 63% over the forecast period.

For details on the report, "Optical Networking: Worldwide Market for Optical Add/Drop Multiplexers," visit www.kmiresearch.com.