Why JDSU Bought Scion

Scion accidentally leaves its customer list lying around where Light Reading can find it

July 2, 2002

3 Min Read
Why JDSU Bought Scion

For a company that claimed to have no sales and marketing staff whatsoever, startup Scion Photonics, which was bought by JDS Uniphase Corp. (Nasdaq: JDSU; Toronto: JDU) in April, seems to have done a pretty good job of getting its product accepted by customers.

According to a nice, shiny marketing presentation that fell into Light Reading's hands recently, Scion managed to get its products tested and approved by ten major OEMs in the industry.

Listed were:

All of the above OEMs are described as having sampled Scion's Arrayed Waveguide Gratings (AWGs) or integrated AWG-based components. And all but two have also approved what they found, according to the presentation. A decision is still awaited from Nortel and Lucent.

"Sampled and approved" means that "customers have tested our parts to our/their specs (performance, form factor, and reliability) and given us the stamp of approval," according to a Scion employee who probably doesn't want to be identified. It is not stated whether this has resulted in design wins, although the presentation does boast of repeat orders.

One startup featured on the list: Lynx Photonic Networks, which has approved Scion's process for manufacturing its thermo-optic switches (see Lynx Claims Optical Switch Advance).

Furthermore, the presentation includes statistical results that show the AWGs meet and exceed Telcordia Technologies Inc. GR-1221 CORE -- the standard for passive components.

All this goes a long way toward explaining why a company that lost $4.3 billion last quarter is still out there shopping for startups (see JDSU Posts Loss, Buys Startup).

The list, which predates the acquisition, is outdated, of course. Most likely it has grown and progressed as a result of Scion becoming a part of JDS Uniphase, thus being able to leverage the larger company's sales channel and established customer accounts.

There are a couple of other interesting points worth noting. One, OEMs are very interested in planar waveguide-based components; and two, JDS Uniphase has a chance of being a key supplier, taking on Lightwave Microsystems Corp., Hitachi Cable Ltd., and NTT Electronics Corp. (NEL)

The presentation, which was probably used to woo JDS, also notes that JDS Uniphase's future strategy should involve closing its thin-film filter product line to make more room for the AWGs -- the exact opposite of what Agere Systems (NYSE: AGR) has done (see Agere Favors Thin-Film Filters). To make this happen, Scion plans to price its products at under $100 per channel, which will allow it to compete on price with eight-channel TFF wavelength multiplexers (see Scion Seeks to Slice Components Costs).

— Pauline Rigby, Senior Editor, Light Reading
http://www.lightreading.comWant to know more? The big cheeses of the optical networking industry will be discussing this very topic at Opticon 2002, Light Reading’s annual conference, being held in San Jose, California, August 19-22. Check it out at Opticon 2002.

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