Cignal AI: Compact Modular Optical Equipment Market to hit $1 Billion in 2018

Cignal AI Raises 200G and 400G Coherent Forecasts in Latest Quarterly Optical Applications Report

Editor’s Introduction:

Compact Modular Equipment is designed to address the growing interest in optical hardware disaggregation.  There’s a desire to build networks from modular components, which are not coupled to a particular vendor’s hardware or software.  The ability to run an optical network operating system (NOS) on any vendor’s hardware makes a tremendous difference in many ways.  Customers can now select network equipment from different sources and be assured that a shared, portable, open source, modular operating environment would allow this equipment to work together. The ultimate goal is to completely divorce the network operating system from all underlying hardware (line cards, chassis, etc.) as well as to separate applications from the operating system. The major benefit is greater flexibility and faster time to market. In traditional systems, a service provider is relegated to the vendor’s software update cycles, meaning that it can take a long time to introduce new service offerings. Disaggregation provides the agility to enable new offerings that roll out in days or weeks rather than months, and this is critical to establishing new revenue streams for major service providers.

Compact modular equipment vendors reported record revenues in the second quarter of 2018, according to the latest Optical Applications Report from networking component and equipment market research firm Cignal AI. This category measures hardware designed specifically for use in DCI, open & disaggregated hardware applications and is on track to top $1 billion in revenue this year. Cignal AI has raised its CY18 forecast for 200G and 400G coherent port shipments and cut its 100G coherent forecast.

“Operators are rapidly adopting second and third generation coherent technology as they seek to lower their cost per bit and achieve better performance. This has resulted in higher than expected demand for 200G and 400G speeds this year, at the expense of first-generation coherent,” said Andrew Schmitt, lead analyst for Cignal AI. “Compounding this trend is the growing adoption of 200G CFP2 DCO modules, which allows coherent technology to integrate with switches and routers more easily than earlier solutions.”

Further analysis is detailed in Cignal AI’s Optical Applications Report, which is released quarterly. The latest 2Q18 issue updates market share for the second quarter of 2018 and provides forecasts in three key markets: compact modular equipment, advanced packet-OTN switching hardware, and 100G+ coherent WDM port shipments.

Other key findings in the 2Q18 report include:

  • Ciena and Huawei Top Compact Modular Market Growth – In this record quarter, Ciena and Huawei were the fastest-growing vendors in the compact modular segment. Ciena benefits from its third-generation coherent technology, while Huawei was lifted by greater adoption from Chinese cloud operators. New entrant Nokia also grew share in its second quarter of serving this market.
  • Packet-OTN Market Grows with Incumbent Adoption – More incumbent network operators are using packet-OTN switching hardware to upgrade their transport networks. In North America, this segment grew 30 percent year-over-year as result of more deployments by Verizon and other large incumbents. Growth was also significant in EMEA and India, where Nokia has taken significant market share.
  • Third Generation Coherent Gaining Momentum – Even though the overall market slowed in 2Q18 as a result of ZTE’s shutdown, other vendors experienced healthy sales growth. Third generation coherent solutions are picking up steam with Ciena’s 400G offering doing well. Acacia, Huawei, Nokia, and NTT Electronics based solutions will reach the market within the next two quarters to challenge Ciena’s lead.

About the Optical Applications Report
The Cignal AI Optical Applications Report includes market share and forecasts for revenue and port shipments for optical equipment designed to meet the needs of specific applications: 100G+ coherent, and compact modular and advanced packet-OTN switching hardware. Deliverables include Excel file with complete data set, PowerPoint summary and Optical Equipment Active Insight.

The report features revenue-based market size and share for the hardware categories and detailed port-based market size and vendor market share for 100G+ shipments. Vendors examined include Acacia, Adtran, ADVA, Ciena, Cisco, Coriant, Cyan, ECI, Ekinops, Fiberhome, Fujitsu, Huawei, Infinera, Inphi, Juniper Networks, NEC, Nokia, NTT Electronics (NEL), Padtec, TE Conn, Transmode, Xtera and ZTE.

Full report details, as well as articles and presentations, are available to clients who register an account on the Cignal AI website.

About Cignal AI

Cignal AI provides active and insightful market research for the networking component and equipment market and the market’s end customers. Our work blends expertise from a variety of disciplines to create a uniquely informed perspective on the evolution of networking communications.

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Sales: [email protected]

One thought on “Cignal AI: Compact Modular Optical Equipment Market to hit $1 Billion in 2018

  1. China Mobile, in partnership with Qualcomm, has developed a roadside unit (RSU) for LTE-V2X direct communication.

    Developed by China Mobile’s IoT subsidiary – China Mobile IoT (CMIoT) Company Limited – and China Mobile Research Institute, the RSU is based on the Qualcomm 9150 C-V2X chipset solution.

    LTE-V2X – also known as C-V2X PC5 direct communication – is a core technology of the Intelligent Transport System (ITS), which has received strong support from national policies in China.

    With its evolutionary path towards 5G New Radio (5G NR), LTE-V2X is a global solution for V2X communications designed to support improved automotive safety, automated driving and traffic efficiency. It is currently the only V2X communication technology compliant with the global 3GPP specifications.

    The PC5-based direct communication mode of LTE-V2X offers vehicle-to-vehicle (V2V), vehicle-to-infrastructure (V2I) and vehicle-to-pedestrian (V2P) communications on the unified 5.9-GHz ITS bands. It does this without needing a SIM, mobile subscription or network assistance.

    Using LTE-V2X in vehicles and in RSUs, vehicles on the road will have the capability to directly communicate with RSUs, allowing drivers to obtain information from RSUs in a variety of use cases such as traffic signal phase timing, quickly and efficiently.

    “With the prosperity of ITS, connected vehicles demand communication with lower latency, higher reliability and wider bandwidth. To address the challenge, China Mobile Research Institute spares no effort to accelerate the maturity of LTE-V2X technology, continuing to work with ecosystem partners set standards and to allocate spectrum for large-scale technical trials,” said Chenguang Wei, deputy general manager of China Mobile Research Institute.

    According to Wei, the RSUs are deployed as part of an IoT project in Wuxi, Jiangsu province.

    C-V2X continues to gain worldwide support from the telecommunication standards associations and the automotive ecosystem.

    The companies said various live demonstration have shown C-V2X’s readiness for the commercial deployment as early as 2019.

    In a separate announcement, Qualcomm has teamed up with Qianxun Spatial Intelligence (Qianxun SI) and Quectel Wireless Solutions (Quectel) to jointly develop a comprehensive high-precision global navigation satellite system (GNSS) positioning solution for China’s automotive industry.

    This announced version of Qualcomm Technologies’ precise positioning framework supports single frequency GNSS utilizing real-time kinematic (RTK) technology based on the GNSS receiver built into Qualcomm Snapdragon LTE modems, as well as Qianxun SI’s precise positioning technology – all integrated in an automotive grade LTE module provided by Quectel.

    Using Qualcomm 3D dead reckoning technology, the precise positioning framework will seek to provide automakers with a comprehensive 3D navigation solution combining multi-constellation GNSS precise positioning, inertial measurement units and other automotive sensors to support next-generation vehicle capabilities, including high-performance connected navigation, as well as LTE-V2X vehicle-to-everything communications (also referred to as C-V2X PC5 across the globe) for enhanced road safety, improved traffic efficiency and autonomous driving.

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