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DWDM

Infinera Talks Metro, 40-Gig

Surprise! Infinera Corp. (Nasdaq: INFN) is shipping metro gear.

After more than a year of dodging and strong-arming questions about the metro ("Are we there yet? Are we there yet?"), Infinera slipped a Securities and Exchange Commission (SEC) 8-K form under the door this morning to tell the world it's got a metro box.

Infinera's claim to fame until now, the DTN, is a long-haul DWDM box. Since last summer, executives have acknowledged that they want to expand into the metro market. (See Infinera Surprises, Targets Metro Access, Metro Move for Infinera?, Infinera Numbers, and Infinera's Metro Expansion.)

Infinera started shipping the metro product in August, the filing says. The company plans to show off the box at Supercomm next month.

The filing also says Infinera expects to have its 40-Gbit/s photonic integrated circuit (PIC) in-house by the end of the year. That's a less long-awaited development, but it could be more important. Infinera's lack of a 40 Gbit/s appears to be the reason why Level 3 Communications Inc. (NYSE: LVLT), Infinera's earliest supporter, defected to Huawei Technologies Co. Ltd. for a recent optical deal. (See Is Huawei in at Level 3? and Infinera's Smoking Gun.)

The new PIC can carry 10 lanes of 40-Gbit/s traffic; Infinera's current PICs do 10 lanes of 10-Gbit/s traffic.

Finally, the filing says Telefónica SA (NYSE: TEF) is an Infinera customer, adding another big-name carrier to the company's roster. Telefonica is using the DTN for submarine as well as terrestrial links.

Submarine contracts tend to arrive in clumps separated by very long intervals, so Infinera is making a push to get its share while the business is out there. (See Infinera Goes Underwater.) As for why Infinera is suddenly blabbing all this, the 8-K simply notes that it's what the company will be saying "at meetings with investors this week."

— Craig Matsumoto, West Coast Editor, Light Reading

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mellonHead 12/5/2012 | 3:56:23 PM
re: Infinera Talks Metro, 40-Gig

I like data.&nbsp;&nbsp; Infinera claims&nbsp; on the order of 10,000 40G transponders shipping (I guess this is the current year or last 12 mos) and 100s K (plural) of 10G.


So if you believe them 10,000 / 210,000 (minimum)&nbsp;&nbsp; &lt; 5% of the market.


Niche market ?&nbsp;&nbsp; :)


&nbsp;


&nbsp;


mH


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&nbsp;

paolo.franzoi 12/5/2012 | 3:56:22 PM
re: Infinera Talks Metro, 40-Gig

&nbsp;


Okay Ninja, maybe you and I have a different defintion of disruptive.



Disruptive to me is the iPod.&nbsp; Remember Sony Walkmans?&nbsp; Seem like a long time ago?&nbsp; Disruption leads to MASSIVE market share redistribution.&nbsp; Being a 2% player in a multi-billion dollar market is not horrible but it is not disruptive.


WDM was a disruptive technology when first introduced and it fundamentally changed the optical systems made and who made them.&nbsp; PICs have lowered the cost of optical systems by a certain percentage.


See the difference?


seven


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paolo.franzoi 12/5/2012 | 3:56:21 PM
re: Infinera Talks Metro, 40-Gig

&nbsp;


Yep they innovate.&nbsp; I am completely good with that.&nbsp; They have done very well for themselves up until this point.&nbsp; The real question for them is this next generation of technology and then the next.&nbsp;


The whole disruptive thing is one of my hot buttons.&nbsp; I listen to people tell me about their disruptive product offerings that are 0 to 10% better than their competition.&nbsp; I also think people disregard the ability for companies to cost reduce ongoing technology as a response in many cases.


seven


&nbsp;

ninjaturtle 12/5/2012 | 3:56:21 PM
re: Infinera Talks Metro, 40-Gig

Ask the competition if it's disruptive. It really doesn't matter what you and I think. But I can see your point. Either way INFN has made it's mark and will continue to be innovative. Maybe that the word that's best describes them. seven are you OK with that 'word"?

^Eagle^ 12/5/2012 | 3:56:20 PM
re: Infinera Talks Metro, 40-Gig

Ninja,


As far as I can tell from deep carrier contacts, IFN has almost NO pricing advantage link over the other approaches and certainly no margin advantage over any the other players.


Again, they are NOT the dominate supplier in ANY account. &nbsp;Even their flagship accounts continue to buy LOTS of optical transport gear not based on IFN version of PIC's.


they are a very strong niche supplier. &nbsp;NOTE: the founders former company, Lightera reached the 400M in sales annually MUCH faster than IFN did, and did it no lots less investment. &nbsp;


As I stated in another post, where IFN wins is where there is very little "Transport" over long distances, but a strong need for LOTS of digital drop and insert ports at every node, like for corporate leased line networks in regions. &nbsp;


a good company, but so far, not even remotely close to disruptive, or even dominate.


Also remember, first mover almost never wins in this business. &nbsp;Ask Coral Networks. &nbsp;Ask WellFleet. &nbsp;Ask many many chip companies. &nbsp;Ask IBM and Pirelli who were the first with WDM platforms. &nbsp;Often, the biggest winners are the second and third movers who follow and learn and then dominate. &nbsp;Ask Cisco. &nbsp;Ask Microsoft.


Ninja, amigo, you might want to change your lightreading "handle".. sometimes you remind me more of jerry lewis playing a ninja than a real ninja...


also wondering if you might be a cousin to danp...?&nbsp;


sailboat.

ninjaturtle 12/5/2012 | 3:56:19 PM
re: Infinera Talks Metro, 40-Gig

Jerry Lewis? Hey I've been called worse. Also until you see my sword collections please don&rsquo;t question my Ninja status :)


Ok so let me tell you the story with Lightera just so you and others understand the details. First of all I joined Lightera in mid 1998. We were acquired by CIEN March 15th of 1999 and I believe only after ~ $17M in funding CIEN pulled out a fist full of Benjamin&rsquo;s ~ $625M. We had less then 45 employees at the time. Oh... by the way, CIEN&nbsp;did I thank you again today for buying us. If not...thanks.


So from that point on it took us ~ 2 years to get Core Director to GA and a few more Benjamin&rsquo;s ~$300M. But hey that's OK because by the time we went GA CIEN had a Market CAP of ~ $20B. Can you believe that? In fact&nbsp;I think it was October 2001 when CIEN's stock was ~ $150 a share post the 2 for 1 split (Again, CIEN did I thank you for buying Lightera) I'll let you all do the DD on that.


So after working for another 2 plus years milking CIEN I joined INFN in June of 2002 and you know that story. So I may sound like Jerry Lewis to you but if you had lightening strike you in the head twice you may be a little...well you know ;)


Chao amigo!!!!!!!


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macster 12/5/2012 | 3:56:18 PM
re: Infinera Talks Metro, 40-Gig

Disruptive to me is the iPod.


What did the iPod disrupt?

paolo.franzoi 12/5/2012 | 3:56:17 PM
re: Infinera Talks Metro, 40-Gig

&nbsp;


The iPod disrupted the portable music player market.&nbsp; They existed before the iPod with my example of the Sony Walkman as the market leader.&nbsp; After the iPod the market changed product types and the particpants and their market shares were different.


That is disruption as a classic.


seven


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photon2 12/5/2012 | 3:56:16 PM
re: Infinera Talks Metro, 40-Gig

Infinera would have been disruptive if the PIC technology could have been leveraged to 40G and 100G awhile ago, not in the next few years.&nbsp;


And, if it could have been leveraged for much lower cost WDM PON market, THEN, it would have been disruptive, as a few have mentioned, by significant cost advantage.&nbsp; That has yet to happen, so what had the potential to be disruptive, has somewhat fizzled in my mind.


P2

macster 12/5/2012 | 3:56:15 PM
re: Infinera Talks Metro, 40-Gig

The iPod disrupted the portable music player market. They existed before the iPod with my example of the Sony Walkman as the market leader.&nbsp; After the iPod the market changed product types and the particpants and their market shares were different.


WDM existed before INFN. Before INFN, the direction was all-optical (analog). INFN made OEO feasible and have been disruptive to the all-optical model. In their WDM segment, they have done very well for themselves (not quite a Microsoft, but nontheless, successful). It's not just about churning things out cheap.


Also, INFN's gear is very suited to the IPoWDM model (at least I think so). We can talk about port explosion (reducing router port usage), bypassing core nodes, etc., but there isn't a single vendor out there (and I have spoken with many) who has convincingly talked about this (still lots of holes). Not necessarily the best, but IPoWDM is field proven (ignoring cost). Which is possibly why we have ALU talking about this as well&nbsp;(then again, they do have both optical and packet gear - lol).

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