Heavy Reading
EXECUTIVE SUMMARY

ROADM & WDM Worldwide Market Forecast, 2006-2011

The wavelength division multiplexing (WDM) market – encompassing both dense wavelength division multiplexing (DWDM) and coarse wavelength division multiplexing (CWDM) – has seen many technological advances over the last five years, trending toward greater capacity, simplified implementation and operations, and increased agility.

Of the many important innovations in WDM technology, reconfigurable optical add/drop multiplexing (ROADM) has garnered the most attention, as it ushers in a new generation of systems that can cost-effectively route wavelengths through optical nodes under software control. The advantages to operators are many, including:

Greater flexibility in network design
Automated optical layer
Integration of synchronous optical networking (Sonet)/synchronous digital hierarchy (SDH), data, and optical transport network (OTN)
Fast service activation
Improved bandwidth efficiency

Major operators, particularly in North America, have made the deployment of ROADM systems central to their new optical network upgrades and enhancements. It is no coincidence that these same operators are simultaneously embarking on major new service initiatives, particularly video services and interactive multimedia.

Most metro DWDM suppliers in the market today have either announced or have begun shipping a ROADM system. Market leadership has changed often in these early days, as initial contracts are awarded and regional markets begin to heat up.

ROADM & WDM Worldwide Market Forecast, 2006-2011 assesses the current state of the ROADM market and forecasts its performance through 2011. In its previous analysis of the ROADM market (see ROADMs and the Future of Metro Optical Networks), Heavy Reading used operator surveys to provide data on market timing, deployment preferences, and feature requirements; in 2006, however, the ROADM market is well underway, so it is more appropriate to provide forecasts of systems deployment, subsystems markets, and market share.

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Our forecasts were shaped over a three-month period, based on in-depth interviews with all the players in the ROADM market, including:

ADVA Optical Networking
Alcatel
Ciena
Cisco Systems
ECI Telecom
Ericsson
Fujitsu
Huawei Technologies
Infinera
Lambda Optical Systems
Lucent Technologies
Meriton
Nortel Networks
Opvista
Tellabs
Tropic Networks

Heavy Reading also conducted exclusive interviews with six leading subsystem suppliers, as well as with major service providers including AT&T, Verizon, BT, Broadwing, Level 3, and a number of smaller operators in North America. Taken together, these interviews provide a comprehensive framework for understanding the market drivers and inhibitors that underpin the forecasts in this report.

The report includes extensive market share and five-year forecasts for the following:

Worldwide metro WDM revenue
Metro WDM revenue by geographic region
Worldwide metro WDM revenue by application
Worldwide ROADM system revenue
ROADM system revenue by geographic region
ROADM system shipments (by units sold) worldwide and by geographic region
Metro/regional ROADM subsystem revenue

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The report also breaks down ROADM shipments by the technology used in their subsystems. The leading technologies are planar lightwave circuit (PLC) and wavelength selective switch (WSS); a small and shrinking portion of the market is still using wavelength blocker technology. WSS subsystems are growing at an exponential pace – jumping from just 15 percent of shipments in 2005 to nearly half of all shipments in the first quarter of 2006 – driven by their greater flexibility in allowing operators to build networks that are not just two-degree, but multi-degree to any level required.


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Report Scope and Structure

ROADM & WDM Worldwide Market Forecast, 2006-2011 is structured as follows:

Section I is an introduction to the report, with complete report key findings.

Section II defines the ROADM market, which for the purposes of our forecasts is confined to the metro/regional market and includes systems with all-optical agility for wavelength management. This section also discusses the methodology used to generate our forecasts.

Section III provides a detailed look at the assumptions behind our forecasts, including market drivers and inhibitors, technology maturity, and product availability. These assumptions directly address both the systems and subsystems markets.

Sections IV presents our forecasts for the metro WDM market over the period 2006-2011, including the projected market shares of the leading players.

Section V presents our forecasts for the ROADM systems market over the period 2006-2011, including the projected market shares of the leading players.

Section VI offers brief individual profiles of the leading ROADM system suppliers. This section also includes a profile of Infinera – a company not included in our ROADM forecasts, but which is important to this market because of the implications of its product design and architecture.

The report is essential reading for a wide range of industry participants, including the following:

Telecom equipment suppliers: How will the market for ROADM and WDM equipment take shape over the next five years? How will expected revenue shifts affect your product lines? How will the rise in demand for ROADM technology affect revenue prospects for Sonet/SDH systems? What are the revenue prospects for WDM vendors that lack ROADM in their product portfolio? Which suppliers are in the best position to maintain and grow market share?
Subsystem vendors: Which types of subsystems will be in highest demand by equipment makers? Does your product line match the anticipated demand curve? How many different subsystem vendors are equipment makers likely to buy from? Which suppliers are now on their short list?
Telecom service providers: How is the ROADM/WDM sector evolving to meet your needs? Which suppliers are taking an approach that fits best with your company’s strategy? Are your current suppliers the best option, or are there other choices that are better aligned with your plan?
Investors: Which equipment makers are in the best position to thrive in this market sector over the next five years? Which companies are emerging as the early winners in this sector, and which ones are likely to struggle for market share? How significant will ROADM market growth be to the telecom equipment industry?

ROADM & WDM Worldwide Market Forecast, 2006-2011 is published in PDF format.

LENGTH: 40 PAGES
PRICE: $3,795
SCOTT CLAVENNA
Chief Analyst, Heavy Reading
Scott Clavenna is the head of Heavy Reading's team of analysts and a leading authority on next-generation telecom technology. He has 14 years' experience researching the optical networks and broadband networking markets...
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SYSTEMS VENDORS PROFILED AND ANALYZED:
ADVA Optical Networking
Alcatel
Ciena
Cisco Systems
ECI Telecom
Ericsson
Fujitsu
Huawei Technologies
Infinera
Lambda Optical Systems
Lucent Technologies
Meriton
Nortel Networks
Opvista
Tellabs
Tropic Networks
DELIVERABLES
40 pages of analysis covering current and projected revenues and unit sales for the ROADM and WDM equipment and subsystems markets through 2011
Market share data covering the ROADM and WDM sectors, current through the first half of 2006
Insight into system vendor strategies for ROADM deployment, based on exclusive, one-on-one interviews
Full analysis of network operator plans for ROADM and WDM based on direct interviews with leading carriers
LENGTH: 40 PAGES
PRICE: $3,795
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