The Commercial Market

Optical ICs to Reach $1.8 B by 2006

Optical networking and its supporting equipment, components and integrated circuits (ICs) are heading toward a market windfall, according to In-Stat/MDR. The high tech market research firm reports that with the geometric growth of the Internet, private IP networks and business-to-business (B2B) e-commerce, the demand for high speed capacity, within the core of the public network, is rapidly increasing. As a result, optical networking will be the norm for all but the last mile and some proponents even feel that fiber will enter the last mile more extensively.

"As much of the industry's advances rely solely on those in semiconductor technology, IC vendors will enjoy a bountiful future as new networks are constructed, existing ones are upgraded and the yet untapped access and enterprise markets are penetrated," says Eric Mantion, a senior analyst with In-Stat/MDR. "Even though optical ICs will experience very modest shipment growth and a slight reduction in revenues in 2002, due to the combined effects of a reduction in demand, the ever present semiconductor ASP decline and a reduction in lead-time before the product is needed, 2003 and beyond will see a positive growth in this market, resulting in a market of almost $1.8 B by 2006."

In-Stat/MDR also found that:

·  As the current production grade ICs are completed, they will be sold into two major end-user markets: module suppliers and communication equipment vendors.

·  While there is growth for all speed grades of optical ICs, without question, 10 GigE will experience phenomenal growth rate. Short range OC-192 will have a healthy growth rate also, since in most cases, it will be very popular in the MAN as the most inexpensive SONET method for connecting separated meshes of 10 GigE based equipment.

Loral-built Intelsat 903 Telecom Satellite Launched Successfully

Isat 903, the latest in a line of advanced communications satellites built for Intelsat by Space Systems/ Loral (SS/L), a subsidiary of Loral Space and Communications, was successfully launched on March 30, 2002. The satellite was sent into space from the Baikonur Cosmodrome in Kazakhstan, aboard an ILS Proton K/DM3 launch vehicle.

Intelsat 903 is the fourth satellite launched in the IX series, and the 28th satellite SS/L has delivered to the international satellite operator since 1980. Two more satellites, Intelsat 905 and Intelsat 906, are scheduled for launch later this year, with the final satellite in the series, Intelsat 907, set to launch early in 2003.

With the delivery of all seven spacecrafts in the Intelsat IX series, SS/L will have built 31 spacecrafts for Intelsat, nearly half of its historical fleet and significantly more than any other manufacturers.

Intelsat 903 will provide fixed satellite services to North and South America, Europe, Africa and the Middle East from its 325.5° East longitude orbital position. Each of the new Intelsat IX series satellites carries 76 C-band and 24 Ku-band transponders (in 36 MHz equivalents), and solar arrays that generate more than 8.6 kW of power (beginning of life). Each spacecraft in the Intelsat IX series carries a much greater percentage of high power amplifiers and generates more solar array power than its predecessors with only a small increase in dry mass.

The increased power and efficiency of the Intelsat IX spacecraft will provide better coverage and stronger signals to help satisfy the burgeoning global appetite for digital services, smaller earth stations and specialized communication services. Many of the IX series satellites will serve as replacements for the Intelsat VI satellites now in orbit, and will provide enhanced voice, video and data transmission services across the globe.

MEMS at OFC - Two Steps Forward, One Step Back

According to In-Stat, the Optical Fiber Conference (OFC) held in Anaheim, CA, in March, was much quieter than last year's - a real reflection of the dismal market conditions in the telecom sector right now - and the fact that the tremendous hype surrounding the use of MEMS in optical networking has finally subsided.

At the 2000 OFC, MEMS was introduced; in 2001, basic products were demonstrated. This year, real solutions were being offered, with a particular focus on optical add/drop multiplexers (OADM) and wavelength switching, as opposed to just cross-connects.

The race is on for what appears to be the most competitive sector to date: small form protection switching. And the development of 3D MEMS continues on track. Beyond switches, the component segment is heating up in regards to variable optical attenuators (VOAs) and dynamic gain (and/or channel) equalizers. Another bright spot was confirmation that revenues are now being generated by a handful of companies. Although the dollars are primarily coming from engineering samples, the volumes are significant enough to go a long way toward validating the manufacturability of these devices.

The difficulty, now, is waiting for the market to turn. Numerous MEMS-based optical networking solutions are ready to go, but the telecom sector as a whole clearly is not. It is going to be a tough wait - one that will no doubt accelerate the inevitable consolidation of MEMS companies pursuing this market.

Bluetooth Products Get Rated

As evidenced by CeBIT and CITA, Bluetooth solutions continue to make strides. Many products have been first launched in Europe and/or Asia, as many vendors consider the North American market to be behind. However, many companies realize that unless they also make their products available to North America, they could contribute to the self-fulfilling prophecy where the North American market would stay behind. It is the old chicken-and-egg syndrome.

Who will take the first step?

Availability for products is on the rise worldwide, while functionality and interoperability increase and user applications grow. From the general consumer's perspective on the home front, there are some products that are quite compelling, are very easy to set up and use and offer a comprehensive set of user applications. For those consumers with one or two PCs in the household (especially if one PC is a notebook), a combination of products worthy of a general consumer's consideration is a Bluetooth-enabled printer, and one or more Bluetooth-enabled PCs via PC cards or USB adapters for simple print sharing in the home without the necessity for a home network. Many consumers either do not have enough need, or do not wish to involve themselves with attempting to set up a home network, but would find this Bluetooth usage scenario beneficial. File sharing via the Bluetooth card(s) or adapter(s) would also be available. Then, if the consumer has a broadband data service, a Bluetooth access point can be added for Internet access sharing. With a few exceptions to date, however, the majority of Bluetooth access point vendors have been targeting enterprise solutions rather than the consumers.

Bluetooth-enabled mobile phone headsets and mobile phones will be popular for those on the move who are constantly on the phone and prefer not to be physically attached to their phones via a cord. The added convenience of hand-free connectivity in the vehicle will be compelling to customers in order to improve driver concentration, not to mention following the law in some cases. PDAs and notebooks that offer Bluetooth functionality for Internet access, printing, file sharing, ad-hoc productivity applications and chat will offer business users and general consumers a compelling, productive and even fun communication vehicle.