Optical/IP Networks

Lucent Unveils Product Lineup

Lucent Technologies Inc. (NYSE: LU) today revealed its strategic product lineup, including new optical products officials say could produce as much as one quarter of the company's revenues for fiscal 2002.

In a session with Wall Street analysts lasting over two hours, execs were optimistic about the telecom market, despite recent setbacks.

"This is clearly a challenging environment, but it's a large market, and it will grow again in the long term," said Bill O'Shea, president of Bell Labs and executive VP of corporate strategy and business development.

He and other presenters said carriers will spend roughly $212 billion on their networks next year. To take advantage of the market, Lucent's reorganized around two key product groups, INS (integrated network solutions -- or wireline gear) and wireless equipment.

Janet Davidson, president of the INS division, further detailed several key areas within the overall market for wireline gear, which she says represents an $80 billion market opportunity in 2002. These areas include the core optical sector, itself expected to generate $16 billion next year.

During the presentations, Lucent execs confirmed expectations that had been grinding in the rumor mill for several days (see Lucent Gears Up for Product Blitz ). These included the release of a series of new products for the optical core and edge, including the following:

  • LambdaXtreme: Lucent’s first ultra-long-haul optical system supporting 128 10-Gbit/s channels for a total capacity of 1.28 Tbit/s, or sixty-four 40-Gbit/s channels for a capacity of 2.56 Tbit/s. This product is based on Raman amplification, and Lucent claims its first release, due out in March 2002, will support distances up to 4,000 kilometers without regeneration for 10-Gbit/s wavelengths, and 1,000 km without regeneration for 40-Gbit/s wavelengths. A later release, due out at an unspecified date, will support 3,000 km for 40-Gbit/s channels without regeneration, Lucent says.

    The LambdaXtreme won’t supersede Lucent’s existing long-haul optical line, which includes the WaveStar series. But the distances it supports should enable Lucent to compete against products from Corvis Corp. (Nasdaq: CORV) and a host of vendors gearing up for ultra-long-haul networking.

  • LambdaUnite and LambdaManager: These combination crossconnect/ADM systems are designed to compete against the CoreDirector platform from Ciena Corp. (Nasdaq: CIEN). LambdaUnite is designed for small central offices and is slated to ship in January; LambdaManager is a redundant system geared to large facilities and is slated to ship in May.

  • TMX880 Multiservice Xchange Switch: Due in January, this product is Lucent's answer to products such as the 7670 Routing Switch Platform from Alcatel SA (NYSE: ALA; Paris: CGEP:PA) and the 3200 from Équipe Communications Corp., which support ATM and IP in a single platform with MPLS (see Alcatel ATM Switch Steps Up). The new platform also supersedes the older MSC 25000 core ATM switch, which Lucent has discontinued (see Lucent Bags High-End Switch). "Given the retraction in the core, we found that the sweet spot was a gigabit switch, not a terabit switch," Davidson said, noting that the new switch also came about because Lucent saw it was crucial to feature MPLS as early as possible.

    Officials confirmed that the TMX880 hardware is based in part on technology from Nexabit, a startup Lucent acquired in 1999. The software is derived from the same programs Lucent uses in its multiservice ATM and frame relay switches.

    Besides these announcements, Davidson reiterated announcement of the MetroDMX and MetroDMXpress platforms, which combine digital crossconnect and Sonet ADM functions in one box. Also shipping is the Metro EON DWDM platform, a metro box that Davidson says automatically fits ring configurations and integrates its amplifiers inside the box to avoid upgrade problems.

    Davidson also said that Lucent is upgrading its GX 550 and CBX 500 Multiservice ATM/frame relay switches with software that increases reliability and density. One card, due out in December, will increase GX performance 400 percent, she said. The GX is also set to get gigabit Ethernet connectivity during the first half of 2002, and both GX and CBX will get packet-over-Sonet in the same timeframe.

    Analysts on today's call expressed concerns that Lucent is simply recycling its older technologies into so-called new products. Officials countered with acknowledgements that indeed they were reusing gear, but they said there were enough features to call everything "new."

    "We're not just rehashing old stuff," Davidson said. The LambdaXtreme, for instance, uses patented techniques that haven't been incorporated elsewhere.

    Wall Streeters were also concerned that even though Lucent may have its optical lineup assembled, it's behind the curve set by competitors. The Navis network management platform, for instance, which has been revamped to manage all of Lucent's INS and wireless gear, is only just now entering the OSMINE process of certification at Telcordia Technologies Inc. That process, which is a prerequisite for selling to the RBOCs, is notorious for taking many months to complete. In contrast, Nortel Networks Corp. (NYSE/Toronto: NT) just announced that its Optera platform has been certified for OSMINE use (see Nortel's Optera Gets Osminated).

    One analyst also questioned whether Lucent was ready to face an increased focus on routing devices at the edge of the network, which he said would be the inevitable outcome of revamped metro networks. Janet Davidson answered that Lucent was well prepared with a full line of products to cope with any changes to carrier networks.

    — Mary Jander, Senior Editor, Light Reading
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    invictus55 12/4/2012 | 10:43:12 PM
    re: Lucent Unveils Product Lineup Lucent Future is Luminous

    The resurrection of the institution
    Sees an awakening - a resurgence unimaginable
    With an adaptive engineering approach to problem-solving
    We claim more than the name with the flame still ablaze

    So no desperation here, the talent pool still intact
    The bell-labs' mantra emanates confidence over all

    Yes the stocks dwindling by number, so it is everywhere
    True a panacea not yet insight, technology is emerging
    But I do bank on a promise sure
    And look to reclaim our Lucent glow
    For these Jersey boys do know how to delivuh
    For we still make the things that make communication work
    ivehadit 12/4/2012 | 7:37:01 PM
    re: Lucent Unveils Product Lineup mary,
    since when do network management products have to go thru the OSMINE process. Since Telcordia supplies most of the NM software for the RBOCs, this would certainly put the fox in charge of the chicken coop. Are you sure you got that piece right?

    otherwise, a good article.
    kbkirchn 12/4/2012 | 7:36:57 PM
    re: Lucent Unveils Product Lineup OSMINEing the NMS is the preferred practice, and it can eliminate the need to OSMINE the box itself. Thus multiple boxes can be OSMINEd via the NMS. Telecordia still has to play along and usually charges more...
    sassman 12/4/2012 | 7:36:54 PM
    re: Lucent Unveils Product Lineup anybody have an idea of how many oc-48 equivalents the lambdaUnite supports?

    Tellium's aurora optical switch is 512, coredirector is 256, sn16000 is 512.
    just trying to size lucent's product up.
    BenGrahamMan 12/4/2012 | 7:36:51 PM
    re: Lucent Unveils Product Lineup http://boards.fool.com/Message...

    Lucent Technologies

    Strategic Product Focus Discussion

    Analyst Conference

    November 7, 2001



    Frank DG«÷amelio, CFO reviewed guidance given in October. Nothing new in that area. During the day he was asked several times about future guidance, etc. And was clear to tell the audience that LucentG«÷s goal today was that of products and not financial. The few things he did mention were as follows. Indicated the global market remains challenging. Expects global market to decline 15 G«Ű 20 % in last calendar quarter. He said if was forced to discuss the industry he would gather that the numbers would come closer to 20 % decline. He projects that Lucent is guiding towards a 10 % quarterly decline.
    Bill OG«÷Shea, President Bell Labs, discussed that market dynamics have changed a bit since August. The global market for Lucent remains large and attractive. The entire Lucent possible market will spend about 200 million next year. This is down from year 2001, but still quite large. He said that the lack of visibility continues (this includes the short term as well). He mentioned that the short term looked G«£challenging yet large G«£ and the long term looked G«£attractive with growthG«•. He mentioned that the large Service Providers would lead the eventual growth. He described that Lucent is trying to establish themselves as the full end-to-end solution partner of choice. He explained the focus of Lucent in two key areas as Integrated Network Solutions (INS) and Mobility Segment (which I thought sounded unexpectedly greatG«™basically combining the PC, Cell phone and PDA in a very quick, very affordable manner, via 3G). He explained that Lucent is offering a complete portfolio of products. Need to remove the complexity from the networks. Envisions a heterogeneous network, which knits Lucent products seamlessly together (including 3rd party equipment). LucentsG«÷ R&D remains the largest in the world for Service Providers. He made a great statement. He mentioned that over history Service Providers (i.e. ATT, Verizon, Sprint) spend a range of 10 G«Ű 20 % (probably closer to 20 %) on Capex (Lucent and its competitors are the recipients of this capex). This range is a range of sustainability. He expressed future revenue growth of 10 G«Ű 12 % and that is in F2003 (assuming Phase II continues to move along on schedule.). He claims that the Internet has grown from the beginning and continues to grow now at a rate of 75 G«Ű 125 % annually (he said there was a short period in the mid 90G«÷s where the rate increased, yet he indicated much of that was hype.). Sees eventual industry growth of 10 %.
    Lucent wants to provide all services for their vision of the network.
    Decrease deployment time
    Simpler network
    Wants Lucent to be the lowest cost per bit provider

    Springtide is a very important product. This dynamically provisions IP/VPN. Customers are asking for this and it is a much sought after product.
    Janet Davidson, President of Integrated Network Solutions.
    Believes growth will come back after overbuild and excess inventory settles.
    Metro market has not been overbuilt. Metro creates a bottleneck. This is known as the Last Mile. Last mile is expected to get faster.
    Core Optical Market is $ 16 billion
    Expects to remain as the market share leader of optical worldwide. She emphasized that this was before the deployment of new products.
    Explained the new Ultra Long Haul (ULH) product Lambda Extreme can go 4000km (128x10G)(1.28 T). It is based on Soliton and Raman technologies with programmable optical add/drop and built in service intelligence. Lucent claims the longest reach at 40G and lowest 40G cost per wavelength. Claims it can start at 10G and upgrade to 40G is simple. Ties together muxers and optical cross connects into one system. Says typical office, a carrier could expect to save 1.5m in Cap-Ex, 15 bays of equipment, and space/power savings of $18K per month.
    Metro market is not retracting, it is growing.
    Metro DWDM is cost effective vehicle (please go to website to determine, I am getting exhaus
    My thoughts at this point of the program were that it seems that Lucent is focusing on easily changeable products. Lots of plug and play and can work with just Lucent stuff or seamless integrate with 3rd party systems.
    Some last mile products were released within the last few weeks and traction is already occurring.
    Claims that contrary to popular belief Lucent has an end-to-end IP portfolio.

    Jim Brewington, President of Mobility Systems Group
    PC and phone are coming together at lightening speeds. It will make Lucent tons of money. Says market will be $ 95 billion by 2006.
    Feels trend of low cost voice will continue.
    Lucent is totally committed to 3G (3rd generation wireless).
    Says Bell Lab workers are the best in the world, hands down. Says they are working on new techniques for Voice over IP.
    Raved about product called OneBTS. Claims it is a money making machine. (He apologizes to the crowd, but he loves it so much he needs to stand in front of the screen and admire the OneBTS, claims he had many pizzas and cokes as he helped develop the product). Says if in 5 years carriers donG«÷t have the OneBTS then they are in trouble. Claims it is the best radio access platform in the world. Says margins are great. Based on advanced electronic components to ensure less materials and hence less costs. It will be able to share UMTS and CDMA platforms. It will have a smart antenna.
    Claims he has never been more confident on LucentG«÷s choices in mobility solutions. He said, G«£There has never been a more exciting time for this exploding industry.G«•

    Henry Schacht, Chairman and CEO
    His regime has been in charge for about one year now. Since he has been in charge all they have discussed was distressed financials and cures for distressed financials, but they never discussed the products that would remedy the ailments. Today was the day to discuss their product portfolio.
    Does not underestimate how challenging this market is. The visibility is murky; there is no visibility for Lucent or anyone. Yet, although we are in a period of retraction, there is still big money, which exists. Underlying strength is the $200 billion dollar industry.
    Lucent wants to offer volume, low cost and reliability. Wants to give customers lower cost and capacity, so they can generate revenues. He feels that Lucent can garner higher margins and customer lower costs if high volumes can be achieved. That is why they are focusing on the 30 largest companies that control 75 % of the total funding in the industry.
    Wants Lucent to service intelligent architecture.

    My thoughts are that the meeting was a success. We now have to research and determine if these new product offerings and if LucentG«÷s perception of the future in communications is in sync with our never-ending research and thoughts. I suspect that many in the community will both applaud and criticize Lucent for their direction. I will be doing a lot of research in the immediate future to attempt to determine if the Lucent vision is what I perceive to be the future of the communications network. My gut feeling is that the answer will be a resounding yes. I was impressed with the meeting (I even participated with a question on their LambdaRouter, which Lucent claims as the only optical switch in deployment. They admitted they have made an error in that terminology and continued to answer my question about their all-optical switch, which now will be based on Raman Amplification (that is what Corvis uses). I look forward to the reports that will follow. Many of you who read this will not understand much of the terminology. This is difficult terminology and impossible to understand without the proper background. I have been researching this for about 17 months now, and I am barely technologically literate ;-) . If you do have questions and you received this via an email, please just send me or call me with a question. The reason I send these reports is because a few people who get the notices are able to use them in their research. Clients, friends, investors, optic professionals, research analysts and other industry professionals view these notes.

    Belzebutt 12/4/2012 | 7:36:50 PM
    re: Lucent Unveils Product Lineup Lucent claims the longest reach at 40G and lowest 40G cost per wavelength. Claims it can start at 10G and upgrade to 40G is simple.

    When will the 40G ship?
    Photonboat 12/4/2012 | 7:36:49 PM
    re: Lucent Unveils Product Lineup Digital cross-connects are considered as core optical? Isn't that an edge product? Also, metro optical comprises what? 40 channel, 2.5 Gb/s transport systems?

    Also, the SONET gear is Cerent, etc. MSPP?

    BenGrahamMan 12/4/2012 | 7:36:49 PM
    re: Lucent Unveils Product Lineup I think somewhere between jan 02 to March 02
    doped 12/4/2012 | 7:36:46 PM
    re: Lucent Unveils Product Lineup Nope, the tounge twister goes something like this:

    Fibrelane -> Siara, Cerent and Cyras

    Siara -> Redback
    Cerent -> Cisco
    Cyras -> Ciena

    (and Sirocco -> Sycamore)

    Try saying that after a drink or two!
    manoflalambda 12/4/2012 | 7:36:39 PM
    re: Lucent Unveils Product Lineup Initial LambdaUnite is 320G switch in 1/2 bay. 128 OC48 interfaces. Plans for a 640G switch and 2 UNITEs per bay. Gives you 512 OC48s. The LambdaManager grows beyond that, size-wise.

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