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    Home > Chemicals Industry > Chemical Technology > High-speed DWDM drives optical transmission revenue growth 100G will be caught in a price war

    High-speed DWDM drives optical transmission revenue growth 100G will be caught in a price war

    • Last Update: 2022-11-17
    • Source: Internet
    • Author: User
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    On January 24, Dell'Oro released the latest optical transmission equipment market forecast report, showing that driven by the demand for high-speed DWDM systems, the global optical transmission equipment sales revenue will reach $15 billion
    by 2018.

    According to the report, DWDM equipment sales revenue will grow at a compound annual growth rate of 8% during the forecast period, with 100Gbps DWDM equipment accounting for 80%
    of overall DWDM sales revenue by 2018.

    "As 100Gbps DWDM applications move from core to metro networks, one of the most significant trends in the optical network equipment market is the rapid rise in 100Gbps DWDM wavelength shipments," said
    Jimmy Yu, vice president of optical transport market research at Dell'Oro.
    "Therefore, in the next five years, 100Gbps demand will become one of
    the most important growth drivers for the optical network equipment market.
    "

    Since 10 years, after Alan released the world's first single-wavelength coherent 100G, operators, manufacturers and other industry conveniences have become very interested in 100G and have begun to invest funds and manpower in 100G for research and development
    .
    After several years of development, 100G has gone from insufficient production capacity to support large-scale applications, from technology accumulation to the launch of differentiated products
    by various manufacturers.
    100G products have
    matured.

    Wei Leping, director of China Telecom Science and Technology Commission, once pointed out that the 100G industry chain has matured, and all components and subsystems have multi-manufacturer commercial capabilities
    .
    In terms of cost, he expects 100G to cost 5-6 times the cost of 10G, that is, 40%-50% reduction in cost per bit, which is still far away at the beginning, but acceptable
    .

    But this also means that 100G has entered the stage
    of price war from expanding production capacity and technology racing.
    Its technology has been relatively mature, the industrial chain is basically perfect, and it has the possibility
    of cost reduction.
    At the same time, the technical differences mentioned by each company when promoting their 100G products are not much different in essence, and the 100G market has also entered the battlefield
    of homogeneous competition.
    Homogenization will inevitably bring price competition to expand the market share
    of their own products.
    Karen Liu, chief analyst of Ovum Optical Communications, expects price competition in the 100G market from the second quarter of 2014 to the beginning of 2015
    .

    When the growth of the optical network market slows down, and cost and price become the market threshold that optical communication manufacturers have to face, mergers between small and medium-sized optical communication manufacturers and even large manufacturers have become inevitable and
    intensifying.
    In 2012, Occaro and Opnext merged, and Ericsson sold its optical access business to its partners, while NSN directly abandoned its optical communications business and sold it to Marlin
    , a private equity firm.
    In 2013, Marlin acquired Tellabs
    .

    From the price war caused by this year's domestic 100G bidding, it can be seen that in the 100G era, the price is still the death
    of optical communication equipment manufacturers.
    Some media have exposed that in the bidding of China Mobile 100G, the four major equipment manufacturers set off a round of fierce price competition, directly exploring the bottom line of profits, and even some manufacturers' 100G quotations directly broke through the price of 40G, and there was a serious "inversion" phenomenon between costs and
    quotations.
    How optical communication companies can maintain profits in the 100G era has become a common problem faced by the entire industry, which not only requires the self-discipline of optical communication companies themselves,
    but also requires the government to cool down this market.

    On January 24, Dell'Oro released the latest optical transmission equipment market forecast report, showing that driven by the demand for high-speed DWDM systems, the global optical transmission equipment sales revenue will reach $15 billion
    by 2018.

    According to the report, DWDM equipment sales revenue will grow at a compound annual growth rate of 8% during the forecast period, with 100Gbps DWDM equipment accounting for 80%
    of overall DWDM sales revenue by 2018.

    "As 100Gbps DWDM applications move from core to metro networks, one of the most significant trends in the optical network equipment market is the rapid rise in 100Gbps DWDM wavelength shipments," said
    Jimmy Yu, vice president of optical transport market research at Dell'Oro.
    "Therefore, in the next five years, 100Gbps demand will become one of
    the most important growth drivers for the optical network equipment market.
    "

    Since 10 years, after Alan released the world's first single-wavelength coherent 100G, operators, manufacturers and other industry conveniences have become very interested in 100G and have begun to invest funds and manpower in 100G for research and development
    .
    After several years of development, 100G has gone from insufficient production capacity to support large-scale applications, from technology accumulation to the launch of differentiated products
    by various manufacturers.
    100G products have
    matured.

    Wei Leping, director of China Telecom Science and Technology Commission, once pointed out that the 100G industry chain has matured, and all components and subsystems have multi-manufacturer commercial capabilities
    .
    In terms of cost, he expects 100G to cost 5-6 times the cost of 10G, that is, 40%-50% reduction in cost per bit, which is still far away at the beginning, but acceptable
    .

    But this also means that 100G has entered the stage
    of price war from expanding production capacity and technology racing.
    Its technology has been relatively mature, the industrial chain is basically perfect, and it has the possibility
    of cost reduction.
    At the same time, the technical differences mentioned by each company when promoting their 100G products are not much different in essence, and the 100G market has also entered the battlefield
    of homogeneous competition.
    Homogenization will inevitably bring price competition to expand the market share
    of their own products.
    Karen Liu, chief analyst of Ovum Optical Communications, expects price competition in the 100G market from the second quarter of 2014 to the beginning of 2015
    .

    When the growth of the optical network market slows down, and cost and price become the market threshold that optical communication manufacturers have to face, mergers between small and medium-sized optical communication manufacturers and even large manufacturers have become inevitable and
    intensifying.
    In 2012, Occaro and Opnext merged, and Ericsson sold its optical access business to its partners, while NSN directly abandoned its optical communications business and sold it to Marlin
    , a private equity firm.
    In 2013, Marlin acquired Tellabs
    .

    From the price war caused by this year's domestic 100G bidding, it can be seen that in the 100G era, the price is still the death
    of optical communication equipment manufacturers.
    Some media have exposed that in the bidding of China Mobile 100G, the four major equipment manufacturers set off a round of fierce price competition, directly exploring the bottom line of profits, and even some manufacturers' 100G quotations directly broke through the price of 40G, and there was a serious "inversion" phenomenon between costs and
    quotations.
    How optical communication companies can maintain profits in the 100G era has become a common problem faced by the entire industry, which not only requires the self-discipline of optical communication companies themselves,
    but also requires the government to cool down this market.

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