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IS THE NEW INTERNET ECONOMY READY TO PAY FOR OPTICS?

LightCounting releases January 2014 Market Forecast Report and Database

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With this January 2014 edition of its Optical Communications Market Forecast, LightCounting is initiating coverage of selected Internet companies, due to their growing importance in driving consumption of high-speed optical components. The list of companies included in this analysis will be referred to as the LightCounting Internet Index and contains many of the same companies found in the Dow Jones Internet Index.

Investments by the top 15 Internet companies, led by Google, increased 28% in 2013, compared to just a 3% growth in the CapEx of the top-15 service providers. Carrier infrastructure spending is six-times higher today, but if the growth disparity continues, Internet companies will take the lead within the next ten years.

The most significant CapEx spent by service providers in 2013, was in China and this is likely to continue in 2014. Infrastructure investment targets for 2014, released recently by the Chinese Ministry of Communications (MIIT) suggest that spending by service providers in China will increase by another 20%. Contributions from Chinese Internet companies are clearly on the rise as well. Combined infrastructure spending of Chinese Internet companies Baidu, Sina, and Tencent were 3.0% of the Internet Index total in 2011, 4.8% in 2012, and we estimate they were 5.2% of the worldwide total in 2013. Internet retailer Alibaba is also a major force behind the growth of datacenter equipment deployment in China.

The most notable impact of infrastructure spending by Internet companies in 2013 was in the Ethernet transceiver market, which rose by close to 40% in 2013. Our forecast projects at least 15% annual growth for this market segment in 2014-2018. Despite increasing shipments of 40GigE and 100GigE products, 10GigE and 1GigE modules will still account for 90% of Ethernet optical transceiver shipments in 2018.

The telecom market was dormant in 2013, with the only bright spot being rapidly increasing sales of 100G DWDM products. Expectations for wide-scale deployments of 100G over the next few years continue to capture the headlines and the imaginations of market analysts. Our forecast projects that even in 2018, 10G products will still account for more than 80% of the total DWDM ports shipped.

John Lively joins LightCounting’s Analyst Team

Lightcounting is pleased to announce that John Lively has joined Lightcounting as a Principal Analyst.  John brings 28 years of experience in telecoms and optical communications, half with Corning Incorporated in its optical fiber and photonics businesses, and half with market research companies RHK and Ovum.

As Principal Analyst and Chief Forecaster at Ovum, he wrote one of the most widely downloaded reports of 2011 and 2012, “New revenue opportunities in telecoms.” At RHK, John headed the Optical Components and Telecom Economics practices. He has published more than 170 industry reports, on subjects as diverse as wireless backhaul, infrastructure services, Internet traffic growth, the impact of the financial crisis on infrastructure vendors, broadband access architectures and optical networks and optical components.

John can be reached in his New York office at 607-739-2916, or via email at John@LightCounting.com.

LightCounting is pleased to invite clients to a webcast “Review of the Latest Market Forecast Report.” The webcast is scheduled for 10 AM PST/1 PM EST on February 12th, 2014.

All clients must first pre-register for the event.  Please contact Renee Isley at renee@LightCounting.com to receive your login instructions.

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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 with dozens of leading module, component, and system vendors as well as service providers and other users. LightCounting is the optical communications market’s 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.

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