ALU
ADVA Q407
We summarize ADVA’s quarterly call and shed light on the issues surrounding a decline in revenue from channel partners as well as the threats they face in 2008.
Ikanos Picks Up Alcatel’s Check
Ikanos (IKAN) announced last week that it would pay a ‘leading European OEM’ $1.6M in return for a development agreement, most likely Alcatel. This is a very odd deal and is worthy of closer examination.
FTTH Silicon Market Share
The latest Linley Group report on Networking Silicon Market Share provides a breakout of PON FTTH silicon market share for the second year running.. It includes both market size and market share information for all Networking markets, including PON. The key takeaway is that Linley believes the market grew only 20% in dollar size, though I estimate deployments grew worldwide over 50% year over year. Such is life as a semiconductor vendor.
They shared the following data with me.
Infinera - The Optical Component Company That Wasn’t
Infinera (INFN) had a very successful first day of trading after seven years of working counter to the popular and misguided beliefs of a Gilderesque all optical future.
Great controversy surrounds the company and investors wonder whether the valuation attached to company is justifiable. The valuation is indeed debatable and is predicated on their success penetrating the PTTs & Bellcos.
State of the Photon - Global FTTH Activity
I haven’t been shy about my prediction that GE-PON would trump GPON deployments and so far I’ve been right. The dominance of GE-PON continues, with large deployments planned or underway throughout Asia. Verizon (VZ) is the only carrier deploying BPON/GPON in size though some activity is promised in Europe. We shall see.
Let’s take a quick look at the state of the photon.
Any Hope for Ethernet over PDH?
One area that I strongly believe will see greater capex in 2008-2009 is Enterprise Access. (see “Enterprise Access Capex - A Ray of Hope?“)
Cable modems forced the Telcos to dig DSL technology from the closet they were hiding it in order to remain competitive. The same forces are aligning today in enterprise access - but this time it’s dark fiber, PON, and even short range wireless that are the threats. What technology represents Telcos only hope of retaining business customers?
AMCC demonstrates GPON MAC
AMCC (AMCC) demonstrated a GPON chipset in a Xilinx FPGA at OFC in Anaheim. No announcement (that I saw) was made, and no press was in Lightreading.
Continue reading
Ciena Sees Red at BT
Two things happened today. Ciena (CIEN) inked their contract with British Telecom for the BT’s 21CN project. And Marconi shareholders approved the sale of the company to Ericsson. Many readers know these two minor events have a bellwether common denominator - a willingness to meet the new price targets set by Chinese competition.
Just as Vietnam and Afghanistan were proxy wars for the 20th century superpowers, BT’s 21CN will be the first full-blown encounter between incumbent and Chinese research, customer service, accounting practices, and cost structures.
Continue reading
Infinera and China
Om Malik wrote an extensive article about Infinera three and a half years ago, and has a follow up comment indicating Del’Oro research shows Infinera is #1 in recent 10G optical switch deployments.
This is yet another example of technology research not keeping accurate score by focusing on the more traditional equipment vendors (Nortel, Alcatel, Lucent, Siemens, Fujitsu) and not counting the emerging Chinese vendors, particularly Huawei and ZTE. Huawei and ZTE both make wavelength switches and ship them in large amounts. Vitesse and Mindspeed supply the components at the heart of these switches and it is the Chinese vendors (and Nortel) who consume the most. Infinera’s not at the top of their list as a commercial partner though Mindspeed considers them a strong technical partner.
We don’t have a copy of the Del’Oro report, but it is an impossibility that ZTE and Huawei are not included in the top 5 vendors. We continue to see a lack of proper accounting for these vendors in carrier optical equipment and think the Nortels and Lucents of the world are radically underestimating the impact these companies will have at their core ILEC accounts. Just ask Marconi (uh… Ericsson) about Huawei and their experience bidding for the 21CN contract at BT.
Infinera is staffed by some very sharp ex-Lightera people, including a few of my ex-colleagues from Vitesse. They are certainly a company worth watching, particularly in an area that Om Malik fails to recognize- long reach, DWDM PON (warning, .pdf link), other than a throwaway reference to IPTV.
Motorola and Broadlight
This news caught us by surprise. Motorola has invested in Broadlight, a supplier of silicon for GPON equipment. Our analysis of the GPON market (in conjunction with an extensive look at Passave) reached the following conclusions.
Tellabs - Broadlight
Optical Solutions (Now Calix) - In House
Alcatel - Freescale
Motorola (Quantum Bridge) - BPON in house, hiring an ASIC team for GPON
Hitachi - Unknown
Unclear what this means to the ASIC team in Andover, MA and in PA.
Regardless, we remain very negative on GPON as an opportunity for silicon PON MAC vendors and negative on GPON as a widely adopted technology over the next several years.
