Researcher tracks, predicts change in fiber industry

So who needs Category 6, anyway? No one who has a properly installed multimode optical-fiber local area network (lan), according to Stephen Montgomery, president of ElectroniCast Corp. (San Mateo, CA), a market- research firm specializing in the fiber-optics industry.

Market-research firm ElectroniCast sees a rosy future for fiber-optic media and components.

Patrick McLaughlin

So who needs Category 6, anyway? No one who has a properly installed multimode optical-fiber local area network (lan), according to Stephen Montgomery, president of ElectroniCast Corp. (San Mateo, CA), a market- research firm specializing in the fiber-optics industry.

The Category 6 comment was probably the most dramatic statement Montgomery made in his address at the Structured Cabling Marketplace seminar, held last October during Cabling Installation Expo `98 and Cabling Workshop in Atlanta, GA. Other observations that he made about the history of the North American premises fiber market and insights into its future growth areas also served to inform the room of attendees who participated in the event.

Currently, a significant driver of the demand for fiber-optic equipment is the growing size of lans, Montgomery says. lans are growing both in terms of the number of nodes in them, as well as in the number of fibers that serve them. Another driver is the need for a lan to reach longer distances than it had to previously. Montgomery says the need for longer distances is prevalent in Central and South America--where the public network will not expand to meet the private network, so the private network expands to reach the public network--and in North America. A quantifiable result of this trend is the need for media converters, which, aside from allowing users to convert from one media type to another, also extend a lan`s distance.

Montgomery reports that approximately 30 manufacturers produce media converters. Of the 30, he classifies six or seven as "first-tier" companies and says it is likely that these first-tier manufacturers will gobble up the smaller companies through acquisitions.

He also cites traditional reasons for fiber-optic deployment, including resistance to electromagnetic and radio-frequency interference, which will continue to spur demand for fiber.

Price barriers that once prohibited many users from deploying fiber-to-the-desk lans are becoming more scalable, Montgomery explains. Fiber-optic component prices have decreased, and stringent requirements for installing and testing unshielded twisted-pair (utp) copper cabling have boosted associated prices to the point where there is no longer a price premium associated with fiber for users who plan to transmit information at speeds of 100 megabits per second or higher. Montgomery acknowledges, however, that recent press and uncertainty surrounding 62.5- and 50-micron multimode fiber have probably adversely affected potential users` acceptance of that medium.

Even when considering the apprehensions of some users, Montgomery predicts that for lan and wide area network (wan) applications, the deployment of fiber-optic cable and components will increase dramatically through 2007. One area in which he sees enormous growth is for some dense wavelength-division multiplexing components.

ElectroniCast tracked the consumption of fiber-optic cable at $646 million in 1997 and expects that rate to climb to $1.4 billion in 2002 and slightly more than $3.5 billion in 2007. Of those totals, multimode fiber constituted $548 million in 1997 and will account for $1.1 billion in 2002 and $2.9 billion in 2007. In all, cable represents more than 40% of the total market for fiber-optic media and connecting hardware. Montgomery expects the connecting-hardware portion to increase its share, as fiber-optic cable that has been installed and left unused is brought online.

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