Market Leader Programs
I am sure you'd agree that 40G is not the end game for carriers but a line to line need until an economical 100G solution is available. Based on the PIC integration of INFN's 100G product details (200+components squeezed into a chip) they seem to be the economical models needed to make the switch. In addition through ASIC technology their software and hardware will be a smarter more configurable product. Everyone else is using the same commercially available components on their 100G DWDM. Higher carrier cost and lower margins for the Box suppliers. PIC integration will prove its worthiness more incrementally with 100G then it ever did with 10G. Plus they are hitting the market at the very early adoption phase this time. Two huge advantages for INFN.
CEO Tom Fallon made an interesting point about 40G at the end of the earnings call. A lot of the 40G opportunity is in China and therefore closed to Infinera (he didn't specify why, but obviously it's because of Huawei and maybe ZTE). Another chunk of 40G is happening at AT&T and Verizon, two customers that happen to not use Infinera.
So, whatever percentage of the 40G market that adds up to -- that's a part of the market that Infinera had no chance at anyway.
Infinera's still losing business because of 40G, they admit as much on every conference call. But one analyst was asking how much available market would be added with a 40G product, and Infinera claims it's not as much as you'd think.
I still think they had to give up on 40G mainly because they just couldn't get it done in time, but ... if they can pull off 100G in a big way, maybe all will be forgiven.