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DWDM Slump Temporary, Says Report

Light Reading
News Analysis
Light Reading
6/20/2001

A small but vital component of dense wavelength-division multiplexing (DWDM) is emerging as a vigorous new market, according to a recent report from research firm ElectroniCast Corp. (see ElectroniCast Projects DWDM Growth).

DWDM filter modules -- thin-film filters and waveguide array gratings -- will account for 9 percent of the overall DWDM component market from now through 2010, the report says. These passive filters are used by equipment makers to direct wavelengths of light through specific channels in DWDM devices.

DWDM filter modules represent a total market of $406.32 million worldwide right now, chiefly coming from U.S. suppliers, ElectroniCast says. By 2010, DWDM filter modules will account for $3.8 billion of a market for DWDM components that will reach nearly $35 billion annually.

DWDM Filter Module Consumption by Region: 2000 - 2010 The market will continue to grow at about 22.6 percent annually over the next five years, then gradually increase to 28 percent by 2010. U.S. demand will dominate, with European and Pacific Rim vendors sharing the remainder of consumed filters in fairly uniform distributions through 2010.

In 2000, for instance, 68.8 percent of DWDM filter modules were sold in the U.S., 21.1 percent in Europe, and 7.5 percent in Japan or the Pacific Rim. By 2010, ElectroniCast forecasts, 56.9 percent of filter modules will be sold in the U.S., 20.4 percent in Europe, and 7.5 percent in Asia.

According to report author and ElectroniCast president Stephen Montgomery, the growth in DWDM filter modules will be driven by the clamor for bigger bandwidth and the need to make the most of installed fiber.

"You'll definitely see a growth in the number of DWDM channels supported in various devices," he says. "At some point, optical add/drop multiplexers may support 1,000 fibers, each with a couple of thousand wavelengths per fiber."

Montgomery concedes that scenario isn't likely to happen anytime soon. But burgeoning metro traffic -- and the corresponding increase in DWDM kit sold -- is already widening the scope of players in the DWDM filter module space.

According to Montgomery, leading suppliers -- such as Agere Systems (NYSE: AGR), Corning Inc. (NYSE: GLW), and JDS Uniphase Inc. (Nasdaq: JDSU; Toronto: JDU) -- are being squeezed by scores of upstarts. The report profiles well over 200 makers of DWDM filter modules.

Will tunable lasers, which dynamically allocate DWDM channels, displace any of this growth in passive components? No, Montgomery says. "Tunable lasers will help this market." They'll facilitate the creation of optical add/drop multiplexers, which will have integral DWDM and amplifier capabilities, he maintains. Passive components will continue to present cost-effective ways of directing DWDM within these kinds of devices.

- Mary Jander, Senior Editor, Light Reading
http://www.lightreading.com

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Milano
Milano
12/4/2012 | 8:12:55 PM
re: DWDM Slump Temporary, Says Report
How many times can Stephen Montgomery replay his "there will be a 20% average annual growth in that market from now to 2025". Was there still someone left at the end of his last speech at OFC conference?

Anyone out there like E'cast? My take is that UBS, RHK and CIBC (in that order) are the credible ones out there.

M.
rafaelg
rafaelg
12/4/2012 | 8:12:53 PM
re: DWDM Slump Temporary, Says Report
I can't believe that this made it into a report. Things must be slow in the industry.
Somewhere in here on another article, there is another quote as to the need for more bandwidth is far away...may be it will never materialize...

Bill Gates once thought that 64K was all anyone would ever need...
#1 says we need more
#2 says we will never need it.
#3 says its metro.
#4 says is core.

If they knew, why aren't they retired with all the other CEO's?

Give me a break! Take it with a grain of bytes...
dlharding
dlharding
12/4/2012 | 8:12:53 PM
re: DWDM Slump Temporary, Says Report
Mentioning the words Credibility and RHK in the same sentence is a crime. Look at how much they have had to downgrade their forecasts. And why LR continues to give Electronicast coverage is beyond me. There are other sources out there for analysis by people who don't plug in simple formulas or base their results on who's paying for the services or giving them equity. Yet, for some reason people keep quoting these firms in their releases or marketing materials.

And let's not mention the shameless self promoting that LR keeps doing for its own employees who do work for the companies that they quote for. (maybe even an equity position here and there??? )


Face it. Forecasting is trying to predict the future. If people were any good at it they would be doing something else for a living besides doing forecasts or working for the Psychic hot lines.

troubleticket
troubleticket
12/4/2012 | 8:12:34 PM
re: DWDM Slump Temporary, Says Report
Too many 20 year metro leases going on
for todays passive components to handle
let-there-be-light
let-there-be-light
12/4/2012 | 8:12:30 PM
re: DWDM Slump Temporary, Says Report
Come on guys!

All of a sudden, we want to take the analysts to court, and expose them as valueless know-nothings, or even worse, deliberate liars. But that would be VERY unfair.

When everyone in the optical industry was riding high not too long ago, we shamelessly quoted various analysts ....

"according to ..., the industry will grow to xxx billion by the year ...." how many times did you read (or even use) these lines????

Did we really believe all that? Nope.

So why did we use it so often? Let's face it. It looked good on our business cases and made it much easier to get investors (and customers) to part with their money.

In today's world, with reality setting in, the analysts are looking somewhat discredited and we jump on them, forgetting we are all part of the same big game.

I say to the analysts, keep up the good work, and thanks for helping us along! Hang in there and kepp on plugging away with the good news...
cfaller
cfaller
12/4/2012 | 8:12:27 PM
re: DWDM Slump Temporary, Says Report
Someone once said that there are three sides to a story- your version, my version, and the truth.

Many Wall Street analysts are claiming that they are being scapegoated for the stock market losses. Investing is a risky business, occasionally people will lose money, blah blah blah.

Congressmen/women are claiming that analysts helped cause the stock market collapse, pushing stocks of companies they knew to be dubious at best, blah blah blah.

The truth, in my opinion, lies somewhere in the middle. Investors should do their homework before they throw money at a company they don't understand, and they shouldn't invest more than they can afford to lose. But that doesn't and shouldn't absolve analysts from any guilt in this debacle. How many analysts had/have "buy" ratings on GST, E.spire, ICG, 360networks, Winstar, Lucent, Nortel, Level 3...need I go on?

All stock market movements begin and end with the investors, but the analysts certainly threw a lot of gasoline on the fire.
petertor
petertor
12/4/2012 | 8:12:27 PM
re: DWDM Slump Temporary, Says Report
LTBL: What purpose do the analysts serve besides cheerleaders in your opinion?
dlharding
dlharding
12/4/2012 | 8:12:26 PM
re: DWDM Slump Temporary, Says Report
A few points:

1. The high numbers and media quotes are incredibly self serving both for the analysts and the companies that are using them. What are they used for? I would say to primarily bullshit the investors into forking over money or the press so the PR game is handled. Just because everyone is doing it is not a good enough reason. Ethics and Integrity should count for something. (Unless you are one of those people out there who lacks principles or who believes that people deserve to be screwed if they are stupid enough to allow it. If so, I feel sorry for your children for having such a wonderful role model) Furthermore, if people are going to produce products that they know are wrong or use them for disengenuos means, why not then start taking software home from work, pass trade secrets to competitors or add cheap chemicals to food that children eat? Where's the line?


2. The fact that people quote them so often says something. Journalists are too stupid to write a story without having someone available to validate their thesis given their own lack of competence or credibility. People need someone to lend them credibility as to their product, financial picture or their management. Or, they need someone to blame if things don't work out.

The worst part of all of it is that most of the analysts don't realize that people don't take them seriously or laugh at their numbers or paid endorsements. I got out of the business years ago given the amount of compromised information and shilling that goes on. It makes me want to puke sometimes when I see people adding their name to bullshit press releases or acting like ho's just to see their names in print. Perhaps they are too dumb to know that they are being used. Or maybe they have gotten to the point that whatever makes you a buck or gets you famous is fine. After all....

prostitution is the world's oldest profession.

rafaelg
rafaelg
12/4/2012 | 8:12:26 PM
re: DWDM Slump Temporary, Says Report
Common guys/gals!

In your experience--please enlighten me-- has anyone seen a sucessfull, accurate forecast?
It seems to me that is an oxymoron...
I am on the negative side of my investments not by listening to "forecasts" and these fools, but by having complete trust in a Company and its future. In the end, "the beast is us"...
let-there-be-light
let-there-be-light
12/4/2012 | 8:12:15 PM
re: DWDM Slump Temporary, Says Report
I wasn't really being serious when I made my comments about analysts. First of all, it is a very serious matter whenever an "innocent" person loses hard-earned money (hey, I also own some Lucent stock, but luckily not too much). The analysts contributed to the hysteria, and they are definitely not completely innocent, but I was trying to make the point that they are not entirely to blame and they do serve a purpose.

Petertor, to reply to your question, they serve as more than cheerleaders. In the ideal world (I know that doesn't exist), they serve as honest gatherers and processors of information. They are supposed to be objective and impartial. They can also be a good conduit for communication between proups of people who may not always have the opportunity to meet and talk: competitors, investors, scientists, customers, etc, etc.

I think the comment about prostitution is going too far.
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