CWDM Market Opportunities, Strategies, and Forecasts, 2003 to 2008 CWDM. Picture by Susie Eustis MOUNTAINS OF OPPORTUNITY

Transcription

1 CWDM Market Opportunities, Strategies, and Forecasts, 2003 to 2008 CWDM Picture by Susie Eustis MOUNTAINS OF OPPORTUNITY WinterGreen Research, Inc. Lexington, Massachusetts

2 CHECK OUT THESE KEY TOPICS CWDM MARKET SHARES CWDM MARKET FORECASTS WHY CWDM? Transparent Metro DWDM Equipment CWDM Market Conditions Optical-to-Electrical Conversion DWDM SYSTEM COMPONENTS CARRIER GRADE DWDM CWDM VS DWDM TYPICAL DEPLOYMENT OF CWDM/DWDM SYSTEMS CWDM MARKET DESCRIPTION MARKET CHALLENGES BROADBAND OPTICAL SERVICES RAPID INCREASE IN BANDWIDTH DEMAND REDUCED PROVISIONING TIME ENABLING ETHERNET NETWORK COMPUTING PROTOCOLS OPPORTUNITY ABOUNDS OPPORTUNITY ABOUNDS WinterGreen Research, Inc. Lexington, Massachusetts

3 CWDM Market Opportunities, Strategies, and Forecasts, 2003 to 2008 Coarse CWDM systems are positioned as offering less expensive transport than dense DWDM technology and sufficient capacity for many edge network and enterprise network applications. CWDM systems deliver enough bandwidth for multiple metro applications DWDM systems deliver more bandwidth than CDWM but are more expensive than CWDM. DWDM systems cost $32,000 per port per node. CWDM systems cost 30 to 40 percent lower than DWDM at $12,000 per port per node. Metro applications do not require the capacity that DWDM systems do. They require more space and power than CWDM. CWDM systems are available with relatively small numbers of channels and low cost. Space and price are key differentiators. 80- watt power is lower than a light bulb. CWDM growth opportunities relate to implementing storage solutions, backup solutions, and CWDM metro transport. CWDM transport solutions platforms are expanding functionality to include access capability. In this manner access and transport markets are merging for the metro markets. With the growth of the Internet, demand for high bandwidth continues to increase. The ability to increase transport capacity is needed universally. High bandwidth is needed to improve productivity and increase supply chain efficiency. Metro markets are shifting as the prices for laser components come down. Optical micro components promise to include more integrated functionality, at less cost per component, increasing the efficiency of DWDM systems. CWDM brings innovative technologies to the broadband market. Platforms are evolving that extend transmission systems into access, supporting the engagement of multiple value added services on CWDM platforms. There is a convergence of transmission and digital loop carrier platform technology. In metropolitan areas, in New York City, D.C. and any of the other major trading areas, real estate is the biggest expense. Small physical size, low heat consumption are big issues in metro deployments. CWDM markets at $51 million in 2002 are expected to reach $271.6 million by 2008.

4 Companies Profiled Market Leaders Nortel Networks Alcatel Ciena Lucent Technologies Siemens Other Market Participants ADVA Optical Huawei Agilent Technologies Lightbit Avici Systems Lumentis Avonex Manticom Networks Cisco Marconi Corning NEC ECI Telecom Optical Micro-Machines Ericsson PacketLight Fujitsu Optical Transport Solutions Sorrento Hewlett Packard Sycamore Networks JDS Uniphase Telect Tellabs

5 CWDM Market Strategies and Forecasts, REPORT METHODOLOGY THIS IS THE TWO-HUNDRED AND FIRST REPORT IN A SERIES OF MARKET RESEARCH REPORTS THAT PROVIDE FORECASTS IN COMMUNICATIONS, TELECOMMUNICATIONS, THE INTERNET, COMPUTER, SOFTWARE, AND TELEPHONE EQUIPMENT. THE PROJECT LEADERS TAKE DIRECT RESPONSIBILITY FOR WRITING AND PREPARING EACH REPORT. THEY HAVE SIGNIFICANT EXPERIENCE PREPARING INDUSTRY STUDIES. FORECASTS ARE BASED ON PRIMARY RESEARCH AND PROPRIETARY DATA BASES. FORECASTS REFLECT ANALYSIS OF THE MARKET TRENDS IN THE SEGMENT AND RELATED SEGMENTS. UNIT AND DOLLAR SHIPMENTS ARE ANALYZED THROUGH CONSIDERATION OF DOLLAR VOLUME OF EACH MARKET PARTICIPATION IN THE SEGMENT. INSTALLED BASE ANALYSIS AND UNIT ANALYSIS IS BASED ON INTERVIEWS AND AN INFORMATION SEARCH. MARKET SHARE ANALYSIS INCLUDES CONVERSATIONS WITH KEY CUSTOMERS OF PRODUCTS, INDUSTRY SEGMENT LEADERS, MARKETING DIRECTORS, DISTRIBUTORS, LEADING MARKET PARTICIPANTS, OPINION LEADERS, AND COMPANIES SEEKING TO DEVELOP MEASURABLE MARKET SHARE. OVER 200 IN DEPTH INTERVIEWS ARE CONDUCTED FOR EACH REPORT WITH A BROAD RANGE OF KEY PARTICIPANTS AND INDUSTRY LEADERS IN THE MARKET SEGMENT. YOU MUST HAVE THIS STUDY

6 CWDM Market Opportunities, Strategies, and Forecasts, 2003 to 2008 Table of Contents CWDM EXECUTIVE SUMMARY CWDM EXECUTIVE SUMMARY CWDM Market Description CWDM Growth Opportunities CWDM Market Shares CWDM Market Forecasts ES-1 ES-1 ES-2 ES-4 ES-6 CWDM DYNAMICS AND MARKET DESCRIPTION 1. COARSE WAVELENGTH DIVISION MULTIPLEXING CWDM MARKET DYNAMICS AND MARKET DESCRIPTION Market Challenges Broadband Optical Services DWDM Applications Why CWDM? Ongoing Industry Adjustment CWDM Market Dynamics Wave Division Multiplexing (WDM) CWDM Platform Systems Metro Markets Challenges of Telecommunications Network Market Conditions More Efficient To Put Together A Telecommunications Network Delay In Spending For Capital Equipment Capital Spending Decreasing Transparent Metro DWDM Equipment Increase In Data Traffic On The Public Network Existing Public Network Transmission Infrastructure Enabling Ethernet Network Computing Protocols Rapid Increase In Bandwidth Demand CWDM Market Conditions Optical Systems Require Miniaturized Products Ring Architecture Reduced Provisioning Time 1-29 CWDM MARKET SHARES AND MARKET FORECASTS 2. CWDM MARKET SHARES AND MARKET FORECASTS CWDM Market Description CWDM Growth Opportunities CWDM Market Shares DWDM / CWDM Metro Market Shares Metro DWDM and CWDM Market Forecast, Dollars 2-13

7 2.4.1 Service Provider Ethernet Technology Metro DWDM and CWDM Market Forecast, Dollars and Ports CWDM and DWDM Regional Analysis 2-25 CWDM PRODUCT DESCRIPTIONS 3. CWDM PRODUCT DESCRIPTION Nortel Networks CWDM CWDM and Nortel OPTera Metro 5000 platform Nortel Scalable Hybrid CWDM Solution: Nortel OPTera Metro 5100 CWDM Nortel Networks Targets CWDM to Services Providers, Enterprises Nortel CWDM Blades Nortel OPTera Metro Nortel Optical Networks Alcatel1692 Metro Span Edge CWDM System Alcatel 1696 Metro Span (Metro DWDM) Alcatel 1660 SM Optical Multi-Service Node Integrates CWDM Alcatel Packet Ring Lucent Metro Optical Lucent Metropolis Lucent Metropolis Enhanced Optical Networking (EON) Lucent Optical Networking Products Siemens / ADVA Scalable Enterprise Solution Coarse WDM Siemens Siemens SURPASS hit 75xx Series ADVA Scalable CWDM Enterprise Solution Service Provider ADVA FSP Advanced Fiber Communications White Rock Networks White Rock Networks Flexible, Block-By-Block Architecture Lumentis Technology Combines DWDM and CWDM Fujitsu Limited Fujitsu Flashwave Fujitsu Storage Area Networking Fujitsu Wavelength Services Fujitsu Multi-service Access Huawei NEC Ciena Ciena ONLINE Edge Multiservice CWDM Platform Cisco Metro Positioning Cisco CWDM GBIC/SFP Solution Cisco CWDM GBIC/SFP Deployment Scenarios Cisco CWDM OADMs: Cisco CWDM and DWDM Cisco Router Architecture And Market Position 3-63

8 CWDM TECHNOLOGY 4. CWDM TECHNOLOGY Optical-To-Electrical Conversion Chromatic Dispersion Optical Channels: CWDM vs DWDM DWDM System Components WDM Standards Enterprise Services and Metro Access Requirements Carrier Grade DWDM CWDM vs DWDM Typical Deployment of CWDM/DWDM Systems 4-16 CWDM COMPANY PROFILES 5. METRO DWDM COMPANY PROFILES ADVA Optical Adva Global Marketing Strategy Adva Solutions Adva Strategic Alliances Adva Regional Focus ADVA Product Positioning ADVA Business Model ADVA Optical Networking Revenues ADVA Coarse Wavelength Division Multiplexing (CWDM) ADVA Optical Networking ADVA Market Topography ADVA Focus On Storage Network And Ethernet-Based Technology Agilent Technologies Alcatel Alcatel VND Division Markets Digital Loop Carrier (DLC) Multi-Service Access Solutions Fourth Quarter Business Update: Alcatel Participation In Communications Network Equipment Markets Alcatel Metro DWDM Alcatel and Optics Alcatel and Tellabs / Sprint DWDM Metro Equipment Alcatel Fiber Optic Submarine Cable Repair Avici Systems Avici Systems Research And Development Avonex Ciena BT / Ciena Strategic Partnership Ciena / WaveSmith Networks Ciena Revenue Ciena Acquires ONI Systems Cisco Cisco Acquisitions and Investments Cisco Strategic Alliances Corning Corning Low-Loss Optical Fiber Corning Telecommunications Segment ECI Telecom ECI Telecom Revenue 5-28

9 5.9.2 ECI Telecom Customers ECI Telecom Next -Generation Intelligent Optical and Transmission Solutions Ericsson Ericsson Partners Ericsson Positioning Ericsson 3G Positioning Ericsson CDMA Ericsson Wi-Fi Ericsson Mobile handsets Ericsson Broadband Access Unit Fibre-To-The-Home Ericsson / Marconi Partnership Fujitsu Optical Transport Solutions Fujitsu DWDM Fujitsu Network Communications Optical Transport Solutions Hewlett Packard Hewlett Packard Positioning Blade Server Positioning Leverages Optical Networks HP Blade Server Partner Program Hewlett Packard / Compaq JDS Uniphase Huawei Huawei Global Operations Huawei ADSL Positioning Lightbit Lightbit WaveXchange Operating At Speeds Of 10Gb/s And Greater Lightbit Next Generation DWDM Transmission Systems Lucent Technologies Lucent Service Provider Network Positioning Lucent Optical Networking Lucent Service Provider Network Positioning Lucent Technologies Strategic Positioning Business Forces Driving Change For Lucent Lucent Metro Optical Solutions Lucent Digital Loop Carrier Lucent High Density Multi Service Access Platform Lucent AnyMedia Access System Lumentis Lumentis Architecture Lumentis Eliminating Amplifiers Lumentis Performance and flexibility Lumentis Dynamic Networking Lumentis CWDM and DWDM Lumentis Storage market Lumentis Funding Manticom Networks Marconi Marconi Revenue Marconi Customers Marconi Financial Restructuring NEC NEC Solutions (America) NEC USA 5-74

10 NEC Long Haul Submarine DWDM Systems NEC Integration Of Computers And Communications NEC Handsets NEC Handset Customers NEC Third Quarter Revenue Of The Fiscal Year Ending March 31, NEC Networks NEC Solutions (America) Nortel Networks Nortel Product Development Nortel Core Business Segments Nortel Optical Networks Nortel Strategic Alliances And Acquisitions Nortel Service Optical Networks Vision Of Framework Nortel Networks Ethernet Over DWDM Nortel Surviving The Downturn Nortel Networks Corporate Strategy Nortel Customers Nortel Product Differentiation Optical Micro-Machines PacketLight PacketLight Networks Access Platform Sycamore Networks Sorrento Sorrento Networks Revenue First Quarter Fiscal Sorrento Customers Sorrento Networks Transport Of Video-On-Demand Services Telect Tellabs Tellabs Customers Tellabs Products Tellabs Financials Tellabs Optical Networking Products Tellabs Next -Gen SDH and Managed Access Systems 5-102

11 List of Tables and Figures CWDM EXECUTIVE SUMMARY Table ES-1 CWDM Growth Opportunities Figure ES-2 Worldwide CWDM Market Shares, Dollars, First Half 2003 Figure ES-3 Worldwide CWDM Market Forecasts, Dollars, ES-2 ES-5 ES-8 CWDM MARKET DYNAMICS AND MARKET DESCRIPTION Table Enterprise CWDM Broadband Optical Services Applications Table Enterprise CWDM Broadband Optical Target Markets Table Enterprise CWDM Broadband Optical functions Table DWDM Applications Table DWDM Service Breadth Table Optical Fiber Systems Efficient Operation Functions CWDM MARKET SHARES AND MARKET FORECASTS Table CWDM Growth Opportunities Table Market Advantage Achieved by Sustainable Product Offerings Figure Worldwide CWDM Market Shares, Dollars, 2002 Table CWDM Market Shares, Worldwide, 2002 Figure Worldwide CWDM Market Shares, Dollars, First Half 2003 Table CWDM Market Shares, Worldwide, First Half 2003 Figure Worldwide Metro DWDM Market Shares, Dollars, 2002 Table Metro DWDM and CWDM Market Shares, Worldwide, 2002 Figure Worldwide Metro DWDM Market Shares, Dollars, First Half 2003 Table Metro DWDM Market Shares, Worldwide, First Half 2003 Figure Worldwide Metro DWDM Market Forecasts, Dollars,

12 Figure Worldwide CWDM Market Forecasts, Dollars, Figure Worldwide CWDM Market Forecasts, Ports, Figure Worldwide Metro DWDM Market Forecasts, Ports, Table Worldwide Metro DWDM and CWDM Market Forecasts, Dollars, Table Worldwide DWDM Market Forecasts, Ports, Table Worldwide Metro DWDM and CWDM Market Forecasts, Ports, Table Worldwide DWDM Market Forecasts, Percent, By Region, Table Worldwide DWDM Market Forecasts, Dollars, By Region, CWDM PRODUCT DESCRIPTIONS Table Nortel OPTera Metro 5100 CWDM Key Features: Table Nortel OPTera Metro 5100 CWDM Benefits Table Nortel OPTera Metro 1000 Key Features Table Nortel OPTera Metro 1000 Features and Benefits Table Nortel OPTera Metro Modules Table Alcatel 1692 Metro Span Edge CWDM System Key Features Table Alcatel 1692 Metro Span Edge CWDM System Key Benefits Table Lucent Metro Optical Solutions Positioning Table Lucent Metro Metropolis Solutions Table Lucent Metro Customer Positioning Table FLASHWAVE 7410 platform Features Table Fujitsu FLASHWAVE 7410 system CWDM Support Table NEC CWDM Applications Table NEC CWDM Applications Benefits Table NEC CWDM Point Of Presence (POP) Positioning Table Ciena CWDM Features

13 Table Cisco CWDM Key Features and Benefits Table Cisco CWDM GBIC Product Information Table Cisco CWDM SFP Product Information Table Cisco CWDM OADM Type Comparison Table Cisco CWDM OADM Product Information Table Cisco IP Communications System Comp onents Table Cisco AVVID Architecture Table Cisco Service Control Table Cisco Support for convergence of media types CWDM TECHNOLOGY Table DWDM Systems Components Table Requirements For Metro Access Technology Table Carrier Grade DWDM Features Table DWDM and CDWM Features Table Premise, Metro and Core CWDM and DWDM System Implementations Table Basic Differences Between a CWDM and a DWDM System Table Basic Similarities Between A CWDM Or DWDM System CWDM COMPANY PROFILES Table Alcatel Metro DWDM Positioning Table Alcatel Terrestrial Optical Networking Strategy Table Alcatel Submarine Optical Networking Strategy Table ECI Telecom Products Table HP Ecosystem Of Compatible Blade Server Products Table Business Forces Driving Change Table Lucent Broadband Access Solutions

14 Table Lucent Broadband Digital Loop Carrier Positioning Table Lucent AnyMedia Access System Family of Products Table Nortel Product Development Table Nortel Optical Networks DWDM Competitive Issues

15 ABOUT THE COMPANY WINTERGREEN RESEARCH, FOUNDED IN 1985, PROVIDES STRATEGIC MARKET ASSESSMENTS IN TELECOMMUNICATIONS, COMMUNICATIONS EQUIPMENT, HEALTH CARE, AND ADVANCED COMPUTER TECHNOLOGY. INDUSTRY REPORTS FOCUS ON OPPORTUNITIES THAT WILL EXPAND EXISTING MARKETS OR DEVELOP MAJOR NEW MARKETS. THE REPORTS ASSESS NEW PRODUCT AND SERVICE POSITIONING STRATEGIES, NEW AND EVOLVING TECHNOLOGIES, AND TECHNOLOGICAL IMPACT ON PRODUCTS, SERVICES, AND MARKETS. MARKET SHARES ARE PROVIDED. LEADING MARKET PARTICIPANTS ARE PROFILED, AND THEIR MARKETING STRATEGIES, ACQUISITIONS, AND STRATEGIC ALLIANCES ARE DISCUSSED. THE PRINCIPALS OF WINTERGREEN RESEARCH HAVE BEEN INVOLVED IN ANALYSIS AND FORECASTING OF INTERNATIONAL BUSINESS OPPORTUNITIES IN TELECOMMUNICATIONS AND ADVANCED COMPUTER TECHNOLOGY MARKETS FOR OVER 30 YEARS. ABOUT THE PRINCIPAL AUTHORS ELLEN T. CURTISS, TECHNICAL DIRECTOR, CO-FOUNDER OF WINTERGREEN RESEARCH, CONDUCTS STRATEGIC AND MARKET ASSESSMENTS IN TECHNOLOGY-BASED INDUSTRIES. PREVIOUSLY SHE WAS A MEMBER OF THE STAFF OF ARTHUR D. LITTLE, INC., FOR 23 YEARS, MOST RECENTLY AS VICE PRESIDENT OF ARTHUR D. LITTLE DECISION RESOURCES, SPECIALIZING IN STRATEGIC PLANNING AND MARKET DEVELOPMENT SERVICES. SHE IS A GRADUATE OF BOSTON UNIVERSITY AND THE PROGRAM FOR MANAGEMENT DEVELOPMENT AT HARVARD GRADUATE SCHOOL OF BUSINESS ADMINISTRATION. SHE IS THE AUTHOR OF RECENT STUDIES ON WORLDWIDE TELECOMMUNICATIONS MARKETS, THE TOP TEN INTERNET EQUIPMENT COMPANIES, THE TOP TEN CONTRACT MANUFACTURING COMPANIES, AND THE TOP TEN TELECOMMUNICATIONS MARKET ANALYSIS AND FORECASTS. SUSAN EUSTIS, PRESIDENT, CO-FOUNDER OF WINTERGREEN RESEARCH, HAS DONE RESEARCH IN COMMUNICATIONS AND COMPUTER MARKETS AND APPLICATIONS. SHE HOLDS SEVERAL PATENTS IN MICROCOMPUTING AND PARALLEL PROCESSING. SHE HAS THE ORIGINAL PATENTS IN ELECTRONIC VOTING MACHINES. SHE HAS NEW PATENT APPLICATIONS IN FORMAT VARYING, MULITPROCESSING, AND ELECTRONIC VOTING. SHE IS THE AUTHOR OF RECENT STUDIES OF THE REGIONAL BELL OPERATING COMPANIES' MARKETING STRATEGIES, INTERNET EQUIPMENT, BIOMETRICS, A STUDY OF INTERNET EQUIPMENT, WORLDWIDE TELECOMMUNICATIONS EQUIPMENT, TOP TEN TELECOMMUNICATIONS, DIGITAL LOOP CARRIER, WEB HOSTING, WEB SERVICES, AND APPLICATION INTEGRATION MARKETS. MS. EUSTIS IS A GRADUATE OF BARNARD COLLEGE.

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