Infinera looks to be a step closer to announcing its product plans for the metro 100G market, and has identified a specific sector of the market, which it is calling the "metro cloud," to target.
CEO Tom Fallon said during the company's second quarter earnings call late Wednesday that the optical system vendor, which is experiencing increasing demand for its long-haul DTN-X transport platform, would offer a "deep dive" into its metro plans on September 18, during its Insight Infinera 2014 analyst day event. (See Infinera Reports Q2.)
That comment inspired one analyst, George Notter of Jefferies & Company Inc. , to speculate in a research note that Infinera Corp. (Nasdaq: INFN) could unveil its much-awaited photonic integrated circuit (PIC)-based metro product, which some have dubbed the DTN-M, during the September event. (See Infinera Earnings & Metro Expectations on Tap.)
The vendor, which won the Public Company of the Year at this year's Leading Lights awards, confirmed in March that it had developed a PIC for the metro market. (See Infinera Shifts Up a Gear and Leading Lights 2014 Winners Video.)
Notter wrote: "Perhaps the most 'tantalizing' thing we picked up on the call was the company's disclosure -- in effect -- that they'll formally announce the new 100G, PIC-based, metro WDM platform at their upcoming Insight Infinera analyst day on September 18th. We believe this system will be their PIC-based, 100G metro WDM platform which management has referenced numerous times in the past."
Fallon, for his part, didn't specifically say on the earnings call that the product would be announced at the event, though he did note that the company would provide a "deep dive look" into the metro market and Infinera's "specific plans to win in this market."
The CEO said Infinera views the near term metro opportunity to be around the data center interconnection market. He noted that this market is "segmented into long haul and metro," and that the very high capacity metro part of that market, which Infinera is calling the "metro cloud," should be seen as "distinctly different from a more traditional metro aggregation market [that is] driven by telcos and cable operators."
According to the Seeking Alpha transcript of the Infinera call, Fallon noted that vendor believes that large scale 100G metro deployments will "happen first in the metro cloud market, starting in earnest in early 2015," and that 100G in the metro aggregation market will "become interesting in late 2015 or early 2016, a view shared by many industry analysts."
Meanwhile, other optical vendors have been aggressively attacking the metro 100G market, with some boasting of early success. ADVA Optical Networking , Ciena Corp. (NYSE: CIEN), MRV Communications Inc. (Nasdaq: MRVC), and Ekinops SA , among others, have all announced new products and capabilities to chase this opportunity, while Huawei Technologies Co. Ltd. has announced its own PIC-based product. (See below for more on these developments.)
As expectation builds for the metro 100G opportunities, Infinera continues to build its long-haul transport business. The vendor reported second quarter revenues of $165.4 million, a near 20% increase compared with a year earlier and up 16% sequentially. Its earnings after one-time costs (non-GAAP) came in at $13.5 million, or 11 cents per share, higher than expected.
"I continue to be convinced in our ability to gain share in a long-haul market on a yearly basis as well as take meaningful market share with the new products we are going to introduce over the intermediate term," noted Fallon the earnings call.
Infinera's share price closed Thursday at $9.07, giving it a market capitalization of just over $1.1 billion.
For more on the metro 100G market, see:
- Ciena Fans 100G Metro Flames
- Ekinops Entices 100G Metro Market
- MRV Unveils OptiPacket for Metro Edge
- Ciena Stirs Up the Metro Market
- ADVA Touts Encryption for 100G Metro Optical Networks
- Huawei Ups the Metro Ante
- The Rise of 100G & Terabit Transport Networks
— Dan O'Shea, Managing Editor, Light Reading