The twin giants of China and India show the highest growth rates, with Russia not far behind.
A new worldwide study of the market for structured cabling published by Building Services Research Industry Association (BSRIA ; www.bsria.co.uk) forecasts the global market to grow at an average annual rate of 2.8% in value terms between 2004 and 2007.
The study comprises data for 20 countries, including the largest market-the United States. The U.S. market, which has suffered in the past years, showed some growth in 2004-the first increase since 2000.
The highest growth rates, however, are forecast for Asian giants China and India. Both countries displayed vigorous growth in 2004 and are set to grow at two-digit rates over the next three years. In Europe, Russia is expected to grow fastest.
The actual base for growth rates varies significantly; the Chinese market was estimated at US$194 million in 2004, compared to a market size of US$67 million in India and US$43 million in Russia.
The residential cabling market is significant in countries such as South Korea where it accounted for around 50% of the total cabling market. The market for residential cabling is included in the study, where commercial products are installed (as is the case in South Korea, Hong Kong, and China). In other countries, where residential products are manufactured specifically for single dwellings as seen in the U.S. and Europe, these statistics are not included.
Market sizes are highly unequal, with a range of large countries representing the bulk of the global market. The U.S. is by far the largest individual market, with a value of US$1.4 billion, which is equivalent to almost 45% of the 20 countries included in the BSRIA study. Germany, the United Kingdom, China, and France are the next-four-biggest markets. Together, these five countries have a market value of US$4.16 billion, which is 74% of the total value of all countries in the study.
Top-heavy, market-share distribution
Market shares of world regions will shift as Asia’s weight is growing, propelled mainly by China and, to a lesser extent, India. On the other hand, mature markets in northern and central Europe, North America, and Australia are expected to grow only modestly or remain flat in value terms. In Europe, growth is forecast mainly for south and east European countries. The Russian market has the greatest growth potential in Europe; however, this growth emerges from a relatively low base.
Sizing up twisted-pair
Some of the large international manufacturers launched copper solutions for 10-Gbit/sec Ethernet networks during 2004. But many of the suppliers were not able to deliver before the end of the year, and so the number of projects was limited. In the U.K., for example, only five 10-Gbit-over-copper projects were carried out, mainly for high-tech companies with focus on their data centers. The uptake of 10-Gig over copper in the future will depend on the marketing and sales efforts undertaken by the suppliers and their channels, as no application needs 10-Gig except for data centers.
Category 6 has made rapid progress in almost all countries; however, penetration rates are still unevenly distributed. BSRIA research found the highest penetration of Category 6 channels in the German-speaking countries in central Europe. These countries have long preferred shielded cables, mainly individually shielded cables that meet the Category 7 standard. These Category 7 cables are installed with Category 6 connecting hardware. The Netherlands and Belgium are unshielded twisted-pair (UTP)-dominated countries with a high ratio of Category 6 channels. Category 6 now represents the majority in most countries, with a rising trend.
Category 7 represents just a small share of the market from a few countries: Switzerland, Austria, Germany, and France. It is not expected to advance rapidly in these markets, and in other countries, Category 7 is insignificant.
Products found across the globe are generally uniform. UTP cable dominates in most countries. The only exceptions are Germany, France, Switzerland, Israel (not included in BSRIA’s study), and Austria. Other countries with a significant share of shielded cable are Italy, Belgium, Singapore, Hungary, Poland, Spain, and the U.K. In China, government policy is helping foiled twisted-pair (FTP) grow in market share.
Shielded twisted-pair (STP) cable generally is seen only in Europe, where Germany accounts for far and away the largest share. In Germany, STP cables have won share because the price premium compared to other shielded cables is low and customers prefer it.
FTP is more important in some other countries than others. France is the single biggest FTP market worldwide, but in the Americas and most of Asia, shielded cables do not play a role.
End-to-end versus mix-and-match
The trend toward branded end-to-end solutions continues. Today, more suppliers than in the past offer their own solution-notably, U.S. manufacturers Belden CDT (www.beldenibdn.com), which acquired NORDX/CDT; Panduit (www.panduit.com), which is in a partnership with General Cable (www.generalcable.com) in the U.S. and LS Cable (www.lscable.com), formerly LG Cable, in many other countries; and Commscope www.commscope.com), which purchased Systimax from Avaya and now has two end-to-end systems in the U.S.
Partnerships and mix-and-match continued to account for a large share in 2004, but BSRIA predicts its share will decline as the end-to-end systems become established brands.
Countries in which shielded cable dominates, including Germany, Switzerland, and Austria, have a high share of mix-and-match solutions. Some UTP-dominated countries feature high mix-and-match ratios, too, as is the case in South Korea and Japan.
Cable-jacket material varies greatly from country to country. Plenum cable is dominant in the United States. Canada, which is not included in BSRIA’s 20-country study, also has a significant plenum share. Halogen-free cables are very strong in some European countries, such as Germany, which has the highest uptake because preferred STP cables often come only in halogen-free versions. But UTP-dominated countries (the U.K. being one example) can also display high halogen-free shares. Uptake of low-smoke/zero-halogen jackets in the U.K. has risen strongly in the past two years.
A view of optics
Fiber-to-the-desk, once regarded as a future growth technology, did not make any meaningful progress in 2004. On the contrary, the technology has lost ground in countries where it was comparatively advanced, notably Germany. The penetration rate as a percentage of total horizontal cable is estimated in most countries below or around 1%, and in no country is higher than 5%.
Relatively high costs for active components, doubts about actual need for bandwidth, and maintenance requirements or problems are most frequently named as reasons why previous hopes were dashed. The simultaneous advance of copper-based solutions has also contributed to this development.
Multimode fiber cable is dominant in LANs, where it is used mainly in the backbone. Singlemode cables have made some progress, but overall, their share is small. OM3 multimode cable, which is made with high-performance 50-µm multimode fiber capable of handling 10-Gigabit Ethernet, and is specified within international standards, is making an impact on many markets.
While OM3 technology is expected to experience growing uptake, there is uncertainty as to how far and how fast this growth might occur, as recent developments in conventional 50-µm multimode cable might prove to represent competition to OM3 cable. OM3 cables are still significantly higher priced than other fiber cables, which hampers sales. The premium, however, has reduced significantly and sales have increased. In some markets, singlemode is seen as a substitute for or competition to OM3 cable.
Only a few truly global players serve the structured cabling market, as most suppliers are regional or operate in only a few countries. Systimax Solutions (www.systimax.com) is present in most countries and is the market leader in many individual countries. Tyco Electronics (www.ampnetconnect.com) is the second-largest supplier in the world. ADC (www.adc.com), Belden CDT, and Nexans (www.nexans.com) are also present in all world regions.
LONE HANSEN heads the structured cabling market intelligence group at BSRIA-Building Services Research Industry Association www.bsria.co.uk).