Market conditions prove challenging for tunable-device manufacturers

May 1, 2002

The competitive landscape and economic condition of telecommunications carriers have delayed the market for tunable lasers, tunable filters, and wavelength converters, despite improvements in laser performance and reduced manufacturing costs. A new report from market researcher Strategies Unlimited (Mountain View, CA) says "device manufacturers will have to 'fine-tune' their wavelength-agile products to the particular economic and technical requirements of distinct applications in order to succeed in a period of carrier malaise."

The market for tunable lasers, tunable filters, and wavelength converters is expected to reach $1 billion by 2005. Today, wavelength-agile devices are used primarily for test and measurement applications, but new applications are beginning to emerge. According to Strategies Unlimited, wavelength-agile devices help address the following key challenges facing network operators and equipment providers: Reduce carriers' inventory of spare line cards; lower operating costs by introducing 1:N channel protection schemes; reduce manufacturers' in-process inventories; allow dynamic provisioning with optical add/drop; provide for wavelength conversion in photonic crossconnects; monitor optical channels; facilitate optical packet switching.

Strategies Unlimited reports that unscheduled private placements and retrenchment are "signs of the times" within such pre-public ventures as Agility Communications and Bandwidth 9 as well as established vendors, including Alcatel Optronics, Agere, and Fujitsu. All companies in this space, particularly the early-stage startups like ChiLight Technologies, Fiberspace, and Princeton Optronics, will require tight coordination of R&D, business development, and production activities to succeed.

For more about the report, "Tunable Lasers, Tunable Filters, Wavelength Converters: Applications and Markets, 2001-2005," call 650-941-3438 or visit