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Market Research Report - 242946

The State of the Optical Communications Industry: Disruption and Transformation Continue

Published by LightCounting, LLC
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The State of the Optical Communications Industry: Disruption and Transformation Continue
Published: May 14, 2015 Content info:

The annual revenue of optical components and module makers has grown in each of the last five years, while the average net margin of those same companies has see-sawed back and forth between profit and loss. This report provides a holistic analysis of the global communications industry, and the factors affecting profitability at each level of the value chain. It examines the profitability and long-term strategies of traditional telecom service providers, as well as the newer internet content providers, and their respective equipment and component suppliers. The success of Chinese equipment and component suppliers is evaluated and a number of Chinese component vendors are profiled.

This report also takes a deeper look at the SONET/SDH, Ethernet, Fibre Channel, WDM, FTTx, Wireless, and Optical Interconnect market segments within the optical components industry, providing market shares of leading vendors sorted into the several categories (top 3, top 4-6, top 7-10, and other vendors), illustrating the fragmentation of these market segments. Data on the diversification of the top 10 leading suppliers of optical transceivers presented in this report suggest that most component suppliers remain highly specialized.

Many of the leading component vendors shared confidential sales data with LightCounting to support this study.

Table of Contents

Table of Contents


Executive Summary

Section 1: Major Trends in Telecom and Datacom Services

  • Telecom industry growth stagnant while internet providers thrive
  • Telecom service providers are embracing transformation
  • Telecom service provider consolidation continues
  • Net neutrality is settled, for now, at least in the U.S.
  • Internet Content Providers are focused on mobile and video
  • Cloud Computing growth continues and vendors respond
  • Three data center segments have emerged
  • Mega-data centers are driving change in equipment and components
  • Section 2: Supply Chain Structure, Vendor Profitability and Consolidation
  • OC vendor profit improving but still behind the rest of the supply chain
  • Digital services are high margin businesses for Content Providers
  • Service provider profitability dipped for majority in 2014
  • Equipment vendors revenues and profits a mixed bag in 2014
  • System vendor mergers and acquisitions continue
  • OC vendor profits remained challenged in 2014
  • IC Chip Suppliers Remain Healthy

Section 3: The Changing Landscape of the Optical Transceiver Market

  • R&D Investment is a huge burden for component suppliers.
  • Market Share Structure and Diversification of Vendors
  • Vertical Integration: A Key Strategy to Profitability
  • SONET/SDH Market Segment
  • Ethernet Market Segment
  • Fibre Channel Market Segment
  • WDM Market Segment
  • FTTx Market Segment
  • Wireless Optics Market
  • Emerging Market for Optical Interconnects

Section 4: The Role of China among Equipment and Component Suppliers

  • Huawei Maintains Dominance in the Global Telecom Equipment Market
  • ZTE revenues rebounded in 2014
  • FiberHome revenue and profit growth continued in 2014
  • Other Chinese Equipment Vendors
  • Chinese optical component companies break the $1 billion mark
  • Section 5: Challenges and Opportunities Ahead

Appendix A: Summary of Financial Data

Appendix B: Profiles of Selected Chinese Vendors

  • Accelink
  • ATOP Technology
  • Eoptolink Technology
  • Gigalight
  • HG Genuine
  • Hi-Optel
  • HiSense Broadband
  • Hymax Optoelectronics Inc.
  • InnoLight
  • O-Net
  • Sunstar Communication Technology
  • Superxon
  • Xiamen San-U Opto-electronic Technology
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