Optical Ethernet: A Market Analysis of Gigabit and 10-Gigabit Ethernet Transceivers

SUMMARY

Prior to 2001, Ethernet was caught in its shared medium, copper legacy. However, with the emergence of the first all-switched, all-optical Ethernet standard, 802.3AE, Optical Ethernet has sprung to the foreground and generated a flurry of press releases, self-serving analyst quotes and news articles that, in CIR's opinion, ignore some of the truth about this market. Over the past several months, the Ethernet market has seen its share of hype with some analysts predicting absurd equipment or service revenue forecasts measured in the tens of billions ($US) or growth rates guaranteed to make even the most PR oriented vendors snicker.

In our efforts to provide credible market research and analysis for our clients and the market at large, CIR is pleased to announce its report titled: "Optical Ethernet: A Market Analysis of Gigabit and 10-Gigabit Ethernet Transceivers," which will provide readers with realistic, detailed analysis and perspectives on the market's customers, suppliers, technologies and opportunities as well as help its readers steer clear of marketing and PR hype. As with all of CIR's market reports, it will be based on demand-side research combined with our proven understanding of the networking and components markets.

In CIR's opinion, the rate of Ethernet deployment will create a much slower growing market than others have suggested. However, when the issues of standardization are resolved and vendors provide improved price/bit levels for 10-Gigabit Ethernet (the price/bit issue does not apply for the other specs), CIR believes that Optical Ethernet has a potentially bright future for transceiver vendors that concentrate on three major factors for success: vertical integration, financial stability and quick development of new products.

The market information for this report was obtained through both primary and secondary market research. The primary research consisted of interviews with virtually all of the leading suppliers of Optical Ethernet components. CIR also interviewed many of the leading networking equipment manufacturers that are evaluating and/or planning to deploy Optical Ethernet equipment in the future and used these interviews to gain an in-depth perspective on requirements and trends in the Optical Ethernet market and to fact check information obtained from secondary sources.

The forecasts are based on data gathered from companies involved in the entire optical value chain--from service providers down through components suppliers. Projections were developed by collecting historical data on Ethernet equipment and gathering forecasts from the leading equipment manufacturers in the Ethernet industry. Forecasts from components suppliers were also reconciled into the forecasts.

Percentage of market (by revenue) each transceiver type represents in 2002 and 2006

TABLE OF CONTENTS

Executive Summary

E.1 An Exceedingly High-Stakes Market

E.2 The Myth of the Short-Term 10-Gigabit Ethernet Revolution

E.3 Major Optical Ethernet Transceiver Suppliers

E.4 Other Optical Ethernet Transceiver Suppliers

E.5 Optical Ethernet Transceivers Opportunities and Success Factors

Chapter One: Introduction

1.1 Objectives of Report

1.2 Scope of Report

1.3 Methodology for this Volume

1.3.1 Information Sources

1.3.2 Forecasting Methodology Summary

1.4 Plan of this Report

Chapter Two: Technology Trends Shaping the Optical Ethernet Transceiver Market

2.1 A Brief History of Optical Ethernet

2.1.1 Physical Media Dependent Interfaces

2.2 Gigabit Ethernet

2.2.1 Implementations

2.3 10-Gigabit Ethernet

2.4 Standards Organizations and Consortia

2.4.1 Optical Ethernet Transceiver Multi-source Agreements

Chapter Three: Equipment Manufacturers' Profiles

3.1 3Com

3.2 Alloptic

3.3 Atrica

3.4 Cisco Systems

3.5 Corrigent

3.6 Enterasys

3.7 Extreme Networks

3.8 Foundry Networks

3.9 Lantern

3.10 Luminous

3.11 Nortel Networks

3.12 Riverstone Networks

3.13 World Wide Packets

3.14 Other Equipment Vendors with Optical Ethernet

3.14.1 ADVA

3.14.2 Alcatel

3.14.3 Avaya Systems

3.14.4 Ciena

3.14.5 Fujitsu

3.14.6 Juniper

3.14.7 Lucent Technologies

3.14.8 NEC

Chapter Four: Profiles of Leading Optical Ethernet Components Suppliers

4.1 Agere Systems

4.2 Agilent

4.3 Blaze Network Products

4.4 Cielo Communications

4.5 E2O Communications

4.6 Finisar Corporation

4.7 IBM

4.8 Infineon Technologies

4.9 Intel Corporation

4.10 JDS Uniphase

4.11 Luminent

4.12 Molex

4.13 Network Elements

4.14 Nortel Networks HPOCS

4.15 OpNext

4.16 Optillion

4.17 Picolight

4.18 Sigma-Links Incorporated (formerly Fujikura and Oki)

4.19 Stratos Lightwave

4.20 Tyco Electronics

Chapter Five: Five-year Forecasts of Optical Ethernet Transceivers

5.1 Introduction: Forecasting Methodology

5.2 Five-year Forecasts

5.2.1 Overall Worldwide Ethernet Transceiver Market

5.2.2 Worldwide Gigabit Ethernet Transceiver Market

5.2.3 Worldwide 10-Gigabit Ethernet Transceiver Market

Appendix A: Forecasts

Exhibit 5-1: Worldwide Ethernet Transceivers used in Switching Ports

Exhibit 5-2: Worldwide 10-Gigabit Ethernet Transceiver Market by Variant

The Americas Ethernet Transceiver Forecast

Asia-Pacific Ethernet Transceiver Forecast

EMEA Ethernet Transceiver Forecast

Worldwide Gigabit Ethernet Transceiver Forecast

Worldwide Gigabit Ethernet Transceiver Forecast by Form Factor

Worldwide Gigabit Ethernet Transceiver Forecast by Network Market

10-Gigabit Ethernet Transceiver Forecast by Variant

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