1310nm Transceiver Market is Shaky

MOUNTAIN VIEW, Calif. -- Suppliers in the otherwise mature 1310-nm transceiver market are threatened by excess competition and continuing developments, such as competitively priced 1550-nm transceivers, and commercialized long-wavelength VCSELs and quantum dot lasers. While the market is currently depressed by slack demand and lingering inventories, one scenario projects over $500 million in annual transceiver sales by 2007, according to a new market study released by Strategies Unlimited. However, the report, High-Data-Rate 1310-nm Lasers: Datacom and Telecom-2003, says that there will be little relief for suppliers without consolidation, which has not really begun. "This dynamic market has not had as high a profile as that of lasers used in WDM systems, but it represents a much larger volume of lasers, and it has been steadier through the downturn," says Tom Hausken, Optical Communication Components Practice Director at Strategies Unlimited. "This market appears mature, but the drive for even lower prices in the downturn combines with innovations in technology to upset the apple cart," Datacom and telecom components converge in the 1310-nm laser market. The lasers are used for short to intermediate reach SONET/SDH, Gigabit Ethernet, and Fibre Channel applications. The datacom world brings a strong focus on low cost, standards, and familiarity with 850-nm VCSELs. The telecom world brings a strong focus on performance and familiarity with Fabry-Perot and DFB lasers. Their convergence at 1310-nm makes the battleground especially interesting. The outcome will depend on the ability of suppliers to execute on their promises to deliver price reductions. Long-wavelength VCSELs need a breakthrough in both technology and manufacturing cost to beat Fabry-Perot lasers. DFB lasers have better prospects, but are increasingly threatened by 1550-nm lasers. Suppliers will have to stay ahead of innovations to gain or maintain market share. Most of the leading suppliers of 1310-nm transceivers are North American companies, while Japanese and Chinese companies dominate the merchant laser subcomponent markets. There is an excess of suppliers in this market, but start-up companies are generating many of the most intriguing innovations. Some of the best ideas may be yet to come, and many will likely come from start-ups. High Data Rate 1310-nm Lasers: Datacom and Telecom-2003 reviews the applications, markets, technology, and suppliers of 1310-nm laser products in both datacom and telecom applications. It presents forecasts by format and application broken down by data rate, format, and reach, along with estimates of revenues and market shares of key suppliers. Strategies Unlimited