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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^Eagle^ 12/5/2012 | 3:56:04 PM
re: Infinera Talks Metro, 40-Gig

Ninja...is that the best you have? &nbsp;No logical engineering or financial arguments? &nbsp;No wit, no style, no grace... no ninja moves? &nbsp;

Only a personal attack on the messenger instead of a counter argument that actually has some detail, or specifics or scientific or engineering points. &nbsp;Instead of hyperbole.

Bollocks: good on you mate. &nbsp;Well said.


^Eagle^ 12/5/2012 | 3:56:04 PM
re: Infinera Talks Metro, 40-Gig

ah.. I see Macster is another pumper. &nbsp;quoting IFN's own linked PR. &nbsp;nice.



^Eagle^ 12/5/2012 | 3:56:04 PM
re: Infinera Talks Metro, 40-Gig


to your post: "My guess and I have been waiting for someone to correct me is that Infinera has less than a 10% global market share of WDM products.&nbsp; If it was truly disruptive, then this number would be much larger.&nbsp; I am not saying it is a bad product or a bad technology or a bad company.&nbsp; I am just saying that the percentage point changes in market share are not actually that significant.&nbsp; Not being disruptive does not mean something is horrible, it is just not a disruption."...

Well stated.

Indeed, this is my point.

My second point is that "if" IFN ever did really shift how things are done to any real degree (as opposed to essentially a different way to package and scale... different and nice in some instances, but not in all cases), then there are at least 6-7 places / labs world wide, perhaps more, that could do a "PIC" and supply it commercially to large systems houses. &nbsp;The systems houses certainly have the ability to do the ASIC's and firmware / software / control plane.

So, I believe the real tale to be told will be seeing who is the 2nd and 3rd mover in this space.

Again, nice post. &nbsp;


Stevery 12/5/2012 | 3:56:02 PM
re: Infinera Talks Metro, 40-Gig

I was wondering where they imported their 40G talent from.&nbsp; It seems that they are just starting on the coherent receiver:


So in summary:&nbsp;

<li>Income statement running at -$100M/yr, </li>
<li>just "delivered" PICs to development.&nbsp; </li>
<li>$290M in bank from IPO and followup,</li>
<li>Burned thru the Level 3 deferred revenue on the balance sheet, so not a lot left to manipulate for the income statement.</li>

Interesting times.

bollocks187 12/5/2012 | 3:54:57 PM
re: Infinera Talks Metro, 40-Gig

My opinion and observations are based on the product set offered by the company on the web site.

Reason #1: Infinera has a very big box with lots of capacity. So they sell a FEW for a lareg amount of revenue. This is a far cry from a cost effective Metro box -sell a lot for a smaller amount of revenue.

Reason #2: Scaling down their PIC technology is doubtful as the design is based on handling large bandwidth payloads. This is not to say that they are not going to redesign some fo the PIC technology - but that will take time and money.

Reason #3: facing competition from the Huwai vendor has casued them to react as the yare no longer the big boy.

Reason #4: Advancement in technology versus homegrown at 40G/100G

Reason #5: There are many optical metro companies in this space that offer the same solution at a very cost effective price even at 40G.

Conclusion/Opinion: They exist in a small albeit exclusive LH market.&nbsp; They now have decided to expand into the metro.&nbsp; If they try and enter the market with the current technology it will be too expensive.

Infinera challenge is how to use the&nbsp; cash they they have amassed. They should be spining new PICs/ASIC to deal with the Metro at the same time balancing the committments for the 100G market. This usually causes internal distractions for resources and project funds.

I hope this clarifies my opinon that Infinera will be expensive.&nbsp; I have no inside information. I have not axe to grind against Infinera - if they want to hire me than I am available :-)

So Infinera is not a good investment, medium to long term if at all. The inflection point will be if offer some compelling offering over the compeititon - versus a repackaged LH pproduct.

Fact not Fiction


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