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Once-stifled optical module market to thrive in coming years

Over the last three years, optical modules have slowly been growing in popularity, according to In-Stat/MDR. The hi...

May 7, 2003  

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Over the last three years, optical modules have slowly been growing in popularity, according to In-Stat/MDR. The high-tech market research firm reports that, if it had not been for the recent economic downturn, optical modules would be the product of choice for most optical networking equipment.

Even though they afford a benefit to both those that make optical networking equipment and those that buy it, growth of optical modules has been stifled (specifically in the 10 Gbps line rate) by an unwillingness amongst companies to try something new during long periods of uncertainty, the firm says.

However, from 2002 to 2007 the market is expected to grow from just over US$1 billion dollars to roughly US$3.5 billion with a Compound Annual Growth Rate (CAGR) of 30.5 per cent.

“Fortunately, as the economic recovery starts to take hold in the second half of 2003, the benefits of using optical modules will merge with a renewed optimism expected about the networking equipment industry, and we will see real traction from these products,” says Eric Mantion, a senior analyst with In-Stat/MDR.

“The companies that make optical networking equipment will choose to use optical modules as they reduce the complexity and difficulty normally associated with creating platforms that can operate at speeds up to ten billion bits per second.”

In-Stat/MDR notes the following benefits associated with optical modules:

* Since the networking equipment vendor will be purchasing modules from reputable providers, there will be less of a concern about Quality Assurance (QA) issues;

* Modules can be tested before they are mounted on the optical networking board, reducing the time needed to diagnose component failures by quality departments;

* As optical module makers refine and automate the process of making their modules, the associated prices are expected to decline due to better yields, thus making optical networking equipment more affordable;

* For the end-user, some of the pluggable modules that are emerging will help enterprises and service providers reduce their operating expenses since
fewer replacement boards will need to be kept on hand in lieu of stocking up on the much cheaper optical modules.

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