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22nd January 2013
 
The global optical transceiver market will grow strongly over the next five year to total US $5.1 billion (€3.8 billion) in 2017, from $3.4 billion (€2.6 billion) in 2012. So claims market research company LightCounting, in its latest telecom and datacom forecast.

One key assumption underpinning the forecast is that competitive pressures will ease. "The price declines in 2012 were brutal but they will not happen again [during the forecast period]," said Vladimir Kozlov, CEO of LightCounting.  
 
The optical transceiver market saw price declines as steep as 30 percent last year. "These were not new products with ramping volumes where sharp price declines are to be expected," said Kozlov.
 
The 100 Gigabit Ethernet (GbE) market saw revenue growth due to strong demand for the 100GBASE-LR4 10-km transceiver even though its unit price declined 30 percent. 
 
The 100G coherent transponder market was small with optical vendors only starting to sell in volume last year. However, this market will grow in 2013 as system vendors further embrace third-party 100G transponders.
 
One unheralded market that did well was 40Gbps transceivers for telecoms and the data centre, while the established 10GbE market continues to do well, with further revenue growth expected in 2013. Other markets that grew in 2012 included FTTx and active optical cables. 
 
According to Kozlov, the system vendors suffered the most, with price declines as high as 35 percent, due largely to the fierce competition provided by Chinese equipment giants Huawei and ZTE. 
 
But relief is expected with government initiatives in Europe and the United States to limit the influence of Huawei and ZTE. 
 
The US government has effectively restricted sales of Huawei and ZTE networking equipment to major US carriers due to cyber security concerns, while the European Commission has determined that Huawei and ZTE are both inflicting damage on European equipment vendors by dumping products onto the European market.  
 
By Roy Rubenstein