The top line numbers for the optical component and modules sales were almost flat in 2013 and this market is projected to grow by just a few percentage points in 2014, according to market research firm LightCounting (see “LightCounting: Datacom market flew in 2013, telecom lagged”). However, there is a lot of action under the surface of these steady top-line numbers, the company says.
The firm’s latest market update report highlights one of the hot spots for optical components and modules: deployments of wireless broadband access systems around the world, which are making an early and direct impact on the optical components and module market.
Sales of 3-Gbps and 6-Gbps optical transceivers connecting base stations with antennas have been growing very rapidly since 2011, but their overall sales were relatively modest. LightCounting’s January 2014 Market Forecast report projected 75% growth in this market during 2014, with total sales reaching close to $500 million. The market research firm now says its latest data suggests that this was an underestimation and this market will “easily” surpass the $500 million mark this year.
Final data on Q4 2013 transceiver shipments came in slightly higher than expected, but it is the guidance for the first half of 2014 offered by several suppliers that is well ahead of earlier expectations, says LightCounting. In addition to increasing sales of 3G and 6G transceivers, shipments of 10-Gbps modules for wireless applications ramped quickly in late 2013 and will lead the market’s growth in 2014.
Aggressive 3G/4G network deployments by China Mobile are clearly part of this story, but not the whole story, LightCounting asserts. The company gathered reports of demand for “wireless optics” in Brazil, India, Korea, and several other countries in Asia and Latin America.
“Connecting antenna towers with optics is a great long-term investment, but the main problem for operators, particularly in developed countries, is dealing with right-of-way issues for fiber installations,” LightCounting said in a statement. “Mobile operators in the U.S. rely heavily on microwave connectivity for antenna towers and probably look with envy on China Mobile’s massive deployments of optics. There is no question that fiber optics can deliver much higher bandwidth than microwave connections and 10G is just the beginning of the ‘wireless optics’ story.”
The longer term impact of wireless broadband on optical networking is the overall growth in traffic. The latest financial report from China Mobile offers an encouraging data point. Wireless data traffic increased by 48.1% in the first quarter of 2014 compared to the same period of last year, when mobile data traffic increased by 83.8% compared to the same period of last year.
LightCounting says its latest Market Update Report combines analysis of the publicly reported revenue of equipment vendors with confidential sales data on optical components and modules, collected by LightCounting, to create a unique insight into market dynamics. The quarterly sales database, offered with the report, includes sales data on more than 100 product categories covering the period from Q1 2012 to Q4 2013 for SONET/SDH, Ethernet, Fibre Channel, CWDM, DWDM, FTTx and wireless infrastructure transceivers, as well as high speed optical interconnects, including active optical cables and embedded optical modules. The report also offers market guidance for the first half of 2014 and discusses potential changes to LightCounting’s market forecast published in January 2014. Data for the report was provided by more than 25 leading module and component vendors.
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