Optical networking market still showing potential
Despite some expectations for decline, the optical network component sector is still showing potential.
By Donna DonnawitzJuly 17, 2012
In 2010 and 2011, the optical network component market grew so quickly that many experts wondered how long the market can sustain any positive momentum before investment cycles turn over and a slow period resumes. According to a recent LightCounting study, 2012 will not be the year that the market hits a plateau.
The study explained that the optical component market climbed by approximately 36 percent in 2010 followed by 17 percent growth in 2011. By the end of 2012, the market will have expanded by 10 percent, a solid increase. This points to considerable potential in a market that is currently facing unpredictability.
This unpredictability is largely caused by current industry trends in China. In 2011, the FTTx market in China expanded by 70 percent, with PON transceiver shipments gaining considerably in light of increased fiber to the home deployment. However, the future market for FTTx in China is extremely difficult to predict because much of the progress came as a result of government-supported projects. Whether government bodies will or will not continue that funding is uncertain.
Vladimir Kozlov, founder and CEO of LightCounting, said the global FTTx market - which was bolstered by network expansion in China - is difficult to analyze because so much of the sector's growth was a result of China's investments. Current economic difficulties make it even more difficult to ascertain how the market will move in the future. However, he said there is a good chance that more governments will invest in FTTx projects to help spur struggling economies into growth, leading to positive potential for the market.
Despite this possibility, Kozlov explained that increases in internet traffic are the best indication of the optical component market's potential.
"Demand for optics in the global telecom networks and data centers is correlated with growth in internet traffic and is more predictable," said Kozlov. "However, these markets are prone to fluctuations. Apart from general economic sentiment impacting investments into networking infrastructure, a small 5 to 7 percent increase in projected growth of Internet traffic could lead to 40 to 50 percent jump in demand for optical components and modules."
The potential market for fiber components is growing within the data center. Many experts agree that the rise of cloud computing and virtualization has created an environment in which fiber is needed for more data center network functions. As the cloud continues to become more pervasive, the demand for fiber could increase at a rapid pace.
Perle has an extensive range of Managed and Unmanaged Fiber Media Converters to extended copper-based Ethernet equipment over a fiber optic link, multimode to multimode and multimode to single mode fiber up to 160km.
The study explained that the optical component market climbed by approximately 36 percent in 2010 followed by 17 percent growth in 2011. By the end of 2012, the market will have expanded by 10 percent, a solid increase. This points to considerable potential in a market that is currently facing unpredictability.
This unpredictability is largely caused by current industry trends in China. In 2011, the FTTx market in China expanded by 70 percent, with PON transceiver shipments gaining considerably in light of increased fiber to the home deployment. However, the future market for FTTx in China is extremely difficult to predict because much of the progress came as a result of government-supported projects. Whether government bodies will or will not continue that funding is uncertain.
Vladimir Kozlov, founder and CEO of LightCounting, said the global FTTx market - which was bolstered by network expansion in China - is difficult to analyze because so much of the sector's growth was a result of China's investments. Current economic difficulties make it even more difficult to ascertain how the market will move in the future. However, he said there is a good chance that more governments will invest in FTTx projects to help spur struggling economies into growth, leading to positive potential for the market.
Despite this possibility, Kozlov explained that increases in internet traffic are the best indication of the optical component market's potential.
"Demand for optics in the global telecom networks and data centers is correlated with growth in internet traffic and is more predictable," said Kozlov. "However, these markets are prone to fluctuations. Apart from general economic sentiment impacting investments into networking infrastructure, a small 5 to 7 percent increase in projected growth of Internet traffic could lead to 40 to 50 percent jump in demand for optical components and modules."
The potential market for fiber components is growing within the data center. Many experts agree that the rise of cloud computing and virtualization has created an environment in which fiber is needed for more data center network functions. As the cloud continues to become more pervasive, the demand for fiber could increase at a rapid pace.
Perle has an extensive range of Managed and Unmanaged Fiber Media Converters to extended copper-based Ethernet equipment over a fiber optic link, multimode to multimode and multimode to single mode fiber up to 160km.
