CIR: Strong Growth for Optical Switches

Market for optical switching devices will grow at an annual rate of over 24 percent between 2003 and 2006

December 18, 2002

3 Min Read

CHARLOTTESVILLE, Va. -- According to Optical Switching Markets: 2003-2006, a new report from Communications Industry Researchers, Inc. (CIR), an optical market research company based here, the market for optical switching devices will grow at an annual rate of over 24 percent between 2003 and 2006. However, the report warns that a switching manufacturer's success in the market will depend heavily on its technology choices and the timing of its product releases. In With the Old During the optical boom period there was a tacit assumption that victory in the optical switching space would go to the supplier with the most advanced technology. By contrast, CIR's recent interviews with customers at all levels of the optical value chain suggest that, for the next few years, the fastest growing markets for optical switching devices will be those with the most conventional technology:

  • The most rapidly growing segment of the market is to be found in OEO switching subsystems, driven mostly by the growing need for OEO cross-connects in the public network.

  • A renaissance of liquid crystal technology in reconfigurable OADMs will help to give this sector healthy growth between now and 2006.

  • Even the optomechanical sector can expect to grow, since switching devices in this sector are by far the most accepted type of technology for protection switching.

And In With the New, Too But CIR does not see optical switching remaining technologically conservative forever. While noting that there will be significant new revenue opportunities generated from improving on older optical switching technologies in the next two years, CIR's new report also claims that emerging customer requirements for small footprint, integration with other components, and rapid response times will ultimately lead to the decline of older optical switching technologies. For example, the now ubiquitous optomechanical switches are exactly what customers are not going to want in a few years time - they are huge, slow, and hard to connect to other devices. The alternative to these older technologies is either MEMS switches, such as those made by OMM, or various species of PLC-based switch, such as those made by OpTun. Unfortunately, CIR research indicates that while in many cases they would like to adopt these technologies, many questions still seem to remain in users' minds about the reliability of devices built with these new technologies, and they are also usually much more expensive than "lower tech" alternatives. But if the future belongs to MEMS and solid-state/PLC-based switches and the short-term opportunities are with more conventional opportunities, then market planning becomes essential to the success of optical switching firms. Optical Switching Markets: 2003-2006 provides an invaluable input to that planning process. It provides forecasts for all segments of the optical- switching-device market, broken down by technology type (OEO, optomechanical, MEMS, liquid crystal and solid-state/waveguide). Additionally, it includes forecasts of OEO and all-optical switching systems markets. Also provided is a strategic analysis of each sector, including an appraisal of the key firms, what their main competitive advantages are, and where the opportunities lie. Communications Industry Researchers Inc.

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