Revenue from 10, 40 and 100 Gigabit optical transceivers sold to telecom service providers fell by 7% from 2013's $820m to $762m in 2014, according to the biannual report '10G/40G/100G Data Center Optics' from market research firm IHS Infonetics.
Telecom 10G is beginning a long decline after an epic 15-year run, with tunable and non-tunable interfaces down on a year-on-year basis. 40G telecom module and network equipment manufacturer (NEM) shipments are vaporizing; shipments outside China are essentially over, and deployments are capped even within China.
"The decline in the telecom transceiver market is entirely a result of vertically integrated 100G network equipment manufacturers displacing shipments of 10G and 40G telecom optical modules," says Andrew Schmitt, research director for carrier transport networking at IHS Infonetics. 100G WDM transceiver shipments surged in 2014, due to huge growth from Huawei and sizable shipments from Alcatel-Lucent, Ciena, Cisco and Infinera. These five vendors control 84% of the 100G coherent market, preventing a material incursion by standalone component vendors and suppressing revenue growth for standalone optical modules.
The surge in 100G is slowing consumption of 10G WDM interfaces, something that will only accelerate once 100G shipments reach greater volume in the metro in 2016. "We don't foresee a reversal until 2016, when CFP2-ACO solutions hit the market, followed by non-coherent 80km solutions," concludes Schmitt.
