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Global sales of optical components and modules should hold steady for the rest of the year, after reaching new heights in Q2 2014

LightCounting releases its October 2014 Market Update report and quarterly sales database.

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It is hard to ignore the financial markets, but it is “a must” for business planning in many industries including ours. Wall Street analysts have a reputation for exaggerating early signs of economic recoveries and falling into despair at the first hint of a possible slowdown or a potentially disruptive technology on the horizon.

Let us take a look at the facts. Sales of optical networking equipment have remained flat for the last three years. Even if we take into account the increasing contributions of this market from Web 2.0 companies, this hardly looks like a market recovery.

In the meantime, global sales of optics used in networking gear have been growing steadily every year since the decline of 2009. Regardless of whether it is made of silicon or indium phosphide, photonics offers undeniable advantages in transporting high-speed signals over any significant distance (often as short as a few meters). Fiber connectivity, originally designed for long-haul networks, is being adopted in fiber to the home access networks, wireless infrastructure, data centers and even supercomputers, where connections can be just a few meters long.

It is this technological transition that drives the market's growth. The financial crisis of 2008 interrupted this process by creating too much uncertainty, temporarily paralyzing the industry. Any major economic downturns in the future will certainly impact the sales of any new technology, but as long as the economy is not totally paralyzed, optics will continue to sell.

LightCounting's projections for global sales of optical components and modules in the second half of the year are steady. Do not expect new records until the second quarter of 2015, but the market is not entering a slump. The demand for optics remains solid across a wide customer base. If suppliers of optics can find the confidence to stand up to very powerful customers and control price erosion, the market will continue to grow.

Detailed projections of optical component and module sales in Q3 and Q4 2014 are included in the quarterly sales database released along with the October 2014 Market Update Report.

Highlights from the market update report were discussed by our LightCounting analyst team during a webcast hosted on October 14th. Copies of the webinar presentations and a recording of the discussion are available to all LightCounting clients on request (Renee@LightCounting.com).

The long-term outlook for this market is available in the July 2014 Market Forecast Report.

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About LightCounting Market Research

LightCounting is a leading optical communications market research company, offering semiannual market updates, forecasts, and state-of-the-industry reports based on its analysis of primary research conducted with dozens of leading module, component, and system vendors as well as service providers and other users. LightCounting is the optical communications market’s first choice source for accurate, detailed, and relevant information necessary for doing business in today’s highly competitive environment. Privately held, LightCounting is headquartered in Eugene, Oregon. For more information, go to http://www.LightCounting.com, or follow us on Twitter at http://www.twitter.com/lightcounting