23 September 2002 -- According to KMI's report "Optical Networking: Worldwide Market for Optical Add/Drop Multiplexers", the OADM market will grow steadily to more than USD1bn in 2006.
This growth 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 will come from the introduction of reconfigurable OADMs, although fixed OADMs will continue to see growth in demand. According to analyst Michael Arden, "Many of the reconfigurable OADMs will be ideally suited for metro applications, where dynamic wavelength management capabilities will be most needed. As a result, OADM demand generated by metro applications will grow faster than long-haul and enterprise segment demand."
The use of OADMs in metro applications will be pushed forward by the shift in DWDM deployments toward the metro space in the next several years. Many networks are being designed with the approach of using less intelligence in the backbone core network and managing wavelengths in the metro space. This creates a demand for equipment like OADMs with dynamic capabilities. Because of this synergy between reconfigurable OADMs and the demands for wavelength management in the metro space, much of the OADM market will be dedicated to the metro area.
Long-haul applications of OADMs will include a majority of the fixed OADM deployments. There will be some need for reconfigurable OADMs in long-haul networks, although the dynamic capabilities of these products will not be needed in many long-haul networks. The deployment of long-haul units from 2002 through 2006 will grow at a compound annual rate of 48%. This compares to an overall OADM unit compound annual growth rate of 57% and a metro-specific rate of 63%.