Report: PON Gear Takes Off

SAN JOSE, Calif. -- Worldwide OLT and ONT PON equipment revenue hit $525 million in 2004, and is projected to grow to $2.2 billion in 2008, with port shipments reaching over 8 million, according to Infonetics Research's biannual market share and forecast report, PON Equipment.

"Asia is the major action point for PON, accounting for 93% of worldwide PON subscribers, which topped 1.4 million in 2004, and are expected to grow to almost 22 million worldwide in 2008 as the broadband boom continues," said Michael Howard, principal analyst of Infonetics Research. "North America accounts for just 6% of total PON subscribers now, but will grow to 23% by 2008. Asia took in 76% of worldwide PON revenue in 2004, followed by North America with 20%. We project that in 2008, Asia Pacific will make up 39% of worldwide PON revenue, North America 43%."

The battle between BPON and EPON continues, with BPON currently making up 84% of all PON subscribers in Asia in 2004. However, EPON is being rolled out so fast in market-leading Japan that it will overtake Japan's BPON subscriber base in 2005. NTT East and NTT West together have over a million subscribers, more than two-thirds of the world's PON subscribers, and these providers are now switching to Gigabit Ethernet PON (GEPON, a form of EPON) almost exclusively.

BPON is the PON technology gorilla in North America, making up 81% of North American PON revenue in 2004, and will continue its reign through 2006, when its successor, GPON, becomes more available. GPON is s a flexible option for providers because it is designed to handle Ethernet, IP, and ATM traffic, and can stream video over IP or a separate analog wavelength. GPON offers roughly twice the capacity of EPON.

EPON is firmly entrenched in much of Asia, but GPON is gaining momentum in North America, Europe, and several Asian countries, with China a good possibility, where analog video is an issue. By 2008, North America will account for 43% of worldwide PON revenue (where GPON dominates), and Asia will account for 39% of worldwide revenue (where EPON dominates).

Infonetics Research Inc.