The market for 10G, 40G and 100-Gigabit optical transceivers sold to telecom service providers dropped 7 percent to $762 million in 2014, said IHS Infonetics.
The decrease in the telecom transceiver market is the result of vertically-integrated 100G network equipment manufacturers displacing shipments of 10G and 40G telecom optical modules.
“We don’t foresee a reversal until 2016, when CFP2-ACO solutions hit the market, followed by non-coherent 80km solutions,” said Andrew Schmitt, research director for carrier transport networking at IHS Infonetics.
The telecom analysis said 100G WDM transceiver shipments surged in 2014, owing to huge growth from Huawei and sizable shipments from Alcatel-Lucent, Ciena, Cisco and Infinera.
Huawei, Alcatel-Lucent, Ciena, Cisco and Infinera control 84 percent of the 100G coherent market. They are preventing a material incursion by standalone component vendors and suppressing revenue growth for standalone optical modules.
Telecom 10G is beginning a long decline after a 15-year run, with tunable and non-tunable interfaces down on a year-over-year basis.
The increase in 100G is slowing consumption of 10G WDM interfaces. 10G WDM will only accelerate once 100G shipments reach greater volume in the metro in 2016.
The telecom analysis report said that 40G telecom module and network equipment manufacturer (NEM) shipments outside China are essentially over, and deployments are capped even within China.