Infinera has touted progress on its XR optics technology, but some analysts believe the company has a long way to go before it can consider the gambit a success.
"Their competitors are not anxious to jump on this," said Sterling Perrin, senior analyst at Heavy Reading. "I think that's where they've got the challenge now."
Infinera executives, nonetheless, are bullish about XR.
"Initial testing is ahead of schedule," boasted Infinera CEO David Heard during his company's quarterly conference call, according to a Seeking Alpha transcript. He teased that the opportunity could ultimately be worth billions of dollars.
The financial analysts at B. Riley Securities agree. "Infinera's highly disruptive XR is expected to ramp in 2023," they wrote in a note to investors following Infinera's quarterly results. The analysts believe the total addressable market for Infinera could reach between $1 billion and $2 billion.
"The company is in the process of building out the XR ecosystem. XR offers compelling economics," the analysts wrote. "In a 5G backhaul case study, the current 5G backhaul network consists of 52 transceivers, 19 switches and routers, and 8 transport boxes. With the implementation of XR, these numbers drop to 7 transceivers, 4 switches and routers, and zero transport boxes. Both XR and ZR+ are expected to sample in 2H22, followed by product shipments in 1H23."
Infinera has been discussing its XR technology for more than a year. According to Heavy Reading's Perrin, it is a technology unique to Infinera. He said XR promises to allow the company to use the same coherent pluggable in both point-to-point and point-to-multipoint configurations. It could be deployed inside cities, he explained, allowing operators to split lines among various destinations, such as 5G cell towers or large businesses.
Infinera is trying to get industry-wide support for XR. In attempting to sell the technology, the company created the Open XR Forum last year to entice service provider customers as well as other supporting vendors, Perrin explained.
On the service provider side, Infinera has certainly recorded interest. AT&T, Telefónica and Zayo are among recent members, joining other operators such as Verizon, Lumen Technologies and Windstream.
However, Perrin said operators are reluctant to move forward with networking technology of any kind that's supported by just one vendor. Thus, Infinera's challenge is to get other vendors to support XR through the Open XR Forum.
"Their competitors are saying it's really not open," Perrin said.
But Infinera's Heard remains hopeful. "We have a healthy pipeline of familiar network equipment manufacturers interested in joining," he said.
Perrin said Infinera's XR strategy will take years to play out. "It's kind of their longer-term strategy," he said.
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