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Optical Switches: $16 Billion Worth?

The worldwide market for optical switch components and subsystems will soar from $308 million in 2000 to $2.8 billion in 2005. After that, it will continue growing at 42 percent a year, reaching $16.1 billion in 2010, according to a forecast from ElectroniCast Corp..

The projections are based on interviews with network planners at 15 service providers, according to Jeff D. Montgomery, ElectroniCast’s chairman. He maintains that it’s perfectly possible to make such long-term predictions, even though the optical switch market is in its infancy. He claims ElectroniCast’s forecasts have never been more than 50 percent out at the end of a 10-year period. “The actual figures are almost always more,” he adds.

ElectroniCast’s study covers components and subsystems made by the likes of JDS Uniphase Inc. (Nasdaq: JDSU; Toronto: JDU) and OMM Inc.. It doesn’t cover what these products are mainly used for -- to make the optical switches sold to carriers by vendors like Ciena Corp. (Nasdaq: CIEN) and Sycamore Networks Inc. (Nasdaq: SCMR).

The study distinguishes between “conventional” switches, the small-scale widgets that have been sold for many years, and “matrix” switches, which typically have multiple input and output ports. Matrix switches vary in size from 4x4 to many thousands of ports.

ElectroniCast reckons that the market for matrix switches will grow rapidly, accounting for 59 percent of the 2010 market, compared to 35 percent of the 2000 market.

Figure 1: Photonic Switch and Switch Matrix Global Consumption Value Trends Montgomery says there will be particularly strong demand for very big matrix switches -- a finding that contradicts an earlier study by Pioneer Consulting (see Optical Switch Market Faces Slow Start). Montgomery says this could be because his panel of network planners came from a wider range of operators, including a number of next-generation carriers such as Level 3 Communications Inc. (Nasdaq: LVLT), Qwest Communications International Corp. (NYSE: Q), and Williams Communications Group (NYSE: WCG). These types of carriers want to buy “the biggest optical switches anybody can provide,” according to Montgomery.

ElectroniCast figures that 81 percent of optical switch components were sold in the U.S. last year. This will decline to 75 percent by 2010.

Table 1. Photonic Switch and Switch Matrix Global Consumption Value Trends, by Region -- Peter Heywood, international editor, Light Reading http://www.lightreading.com

CogswellCogs 12/4/2012 | 8:54:31 PM
re: Optical Switches: $16 Billion Worth? "optical switches sold to carriers by vendors like Ciena Corp. and Sycamore Networks Inc." Amazing how the only two vendors mentioned just happen to be two of the biggest LR advertisers... Is this a form of product placement, as is done in movies?

As always, it's just a coincidence.
TechnoBabble 12/4/2012 | 8:54:29 PM
re: Optical Switches: $16 Billion Worth? If Corvis would shed more light on their technologies they would probably be mentioned in the article. Technology blanketed in secrecy and some shady business deals for customers don't add up to the great products they are supposed to have. If you've got the technology, flaunt it. If not, don't get your feathers ruffled when you are not mentioned in an article.

--TechnoBabble
kwdickens 12/4/2012 | 8:54:29 PM
re: Optical Switches: $16 Billion Worth? Right. Where is a mention of Corvis, the only provider of a PURE optical solution? Corvis' CoreWave solution saves bandwidth providers money in many ways....(1)deployment, (2) maintenance, and (3) management. You want mesh? Corvis can provide it. You need distance? Corvis's CoreWave demostrated transmission lengths of 350Km without the need for re-amplification thus allowing unbroken lines to be laid submerged from the coast to offshore islands? And that is a fraction of the distance Corvis technology is capable of? You want speed? Corvis' routers, the only commercialized routers that maintain a pure optical signal without conversion to an electrical signal, are the routers of the future! So why is Corvis not mentioned?
iprsvp 12/4/2012 | 8:54:28 PM
re: Optical Switches: $16 Billion Worth? Hello,

calm down. This article is not talking about
the type of switches made by corvis. Why don't
you guys talk to some other optical analyst about
corvis switches and find ouy if they can compete with NT, cien, sycamore and tellium type switches.

Or send a mail to Corvis IR and ask them if they
compete with cien's core director or sycamore's
SN16000 switches or tellium's aurora or Xros's optical switch. When you get the reply post it
here. unless without proper proof that corvis
can compete with above mentioned products don't
argue with lightreading.

Get your facts right first. It looks like corvis
was successful in fooling you people.

CogswellCogs 12/4/2012 | 8:54:21 PM
re: Optical Switches: $16 Billion Worth? You said "and find ouy if they can compete with NT, cien, sycamore and tellium type switches" and "ask them if they compete with cien's core director or sycamore's SN16000 switches or tellium's aurora or Xros's optical switch". Note the inclusion of more than just Ciena and Sycamore in your post. Funny how LR only includes those who advertise.

Lightreading is becoming Litereading - instead of half the calories, it has half the vendors: just the ones who pay them.
stout4555 12/4/2012 | 8:54:20 PM
re: Optical Switches: $16 Billion Worth? <sigh>, What's with all the conspiracy theorists? Care to comment on the article outside of Corvis not getting a blurb? It gets awful tiresome listening to the bleeding hearts whining about how unfairly their favorite company is being treated...meanwhile, another interesting topic gets buried amongst the rubble...

Please, lets move on already...</sigh>
photncowby 12/4/2012 | 8:54:18 PM
re: Optical Switches: $16 Billion Worth? I agree. Apparently, some readers are hyper-sensitive. It seems reasonable that these two companies were mentioned to provide an example of a type of company. It is not reasonable to expect a laundry list of manufacturers be provided each type a facet of some technology is reviewed.

Step outside of the fray an re-examine your position.
CogswellCogs 12/4/2012 | 8:54:16 PM
re: Optical Switches: $16 Billion Worth? The post from iprsvp mentioned Xros and Tellium along with Ciena and Sycamore. My point was that there are more than just the two ad-buying vendors. Where did I mention Corvis in either of my posts? Some people seem to enjoy reading between the lines for 'facts' that do not exist.

Although "It is not reasonable to expect a laundry list of manufacturers be provided," is it reasonable (or ethical) to only list the advertisers to LR as examples? I would think that respectable and professional sites would try to avoid the appearance of improper behaviour by purposly including companies who do not pay them.

Too many coincidences occur here to simply laugh off.

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