North American Optical Test Equipment Market: End-User Analysis

Published by: Frost & Sullivan

Published: Aug. 1, 2002

Table of Contents

1. Executive Summary


1. Introduction


1. Introduction

2. Optical Network Test Equipment Market


1. Overview


1. Introduction


2. Demand Analysis


2. Revenue Forecasts and Competitive Landscape


1. Revenue Forecasts


2. Competitive Analysis


3. Frost & Sullivan Market Engineering Awards


1. Market Engineering Leadership Award - Agilent Technologies, Inc.


2. Market Penetration Award - EXFO


3. Customer Service Leadership Award - Acterna

3. End-User Analysis: Optical Network Service Providers/Carriers


1. Overview


1. Introduction


2. Demand Analysis


2. End-User Analysis


1. Introduction


2. Optical Testing


3. Test Equipment


4. Test Equipment Features


5. Test Equipment Features


6. Test Equipment Vendors


7. Test Equipment Spending


8. Replacement Rates and Return on Investments

4. End-User Analysis: Optical Equipment Manufacturer


1. Overview


1. Introduction


2. Demand Analysis


2. End-User Analysis


1. Introduction


2. Optical Testing


3. Test Equipment


4. Test Equipment Features


5. Test Equipment Vendors


6. Test Equipment Spending

5. Issues & Opportunities and Recommendations


1. End-User Issues


1. Introduction


2. High Price of Test Equipment


3. Test & Measurement Vendors Behind the Technology Curve


4. Lack of Test Equipment for Technologies in Infancy


5. Lack of Integrated Test Systems


6. Poor or Lack of Support Services


2. Market Opportunities


1. Optical Network Service Providers/Carriers


2. Optical Equipment Manufacturers


3. Strategic Recommendations


1. Introduction


2. Product Development Strategy


3. Customer Relationship Strategy


4. Market Intelligence Strategy


5. Pricing Strategy


6. Alliance Strategy

Abstract

Manufacturers of optical networking test equipment have great prospects as these networks continue to drive the telecommunications industry. To keep pace with the increasing demand for bandwidth, carriers are using new fiber-enabled networks, supported on intelligent technology. These next-generation networks will require test equipment adapted for the new standards and measurements, in addition to customized test systems.

This Frost & Sullivan research is an end-user analysis of the North American optical networking test equipment. This survey covers optical testing, optical test equipment, test equipment features, test equipment vendors, and test equipment spending. It identifies future opportunities, key application areas, and end-user preferences.

DWDM and GigE to Provide New Markets for Test Equipment

Major telecom equipment vendors and carriers continue to invest in R&D. Dense wavelength division multiplexing (DWDM), an important technology being tested, allows carriers to expand capacity without adding new fiber, thus significantly lowering capital expenditure. "The cost of laying new fiber is estimated to be around $40,000 per km; DWDM represents a cost-effective option to increase fiber capacity by up to 35 percent," says Frost & Sullivan Research Analyst, Sailaja Vepa. Manufacturers of test equipment will have a first mover advantage if they adapt products to serve DWDM.

Networks such as gigabit Ethernet (GigE) services are becoming increasingly prevalent providing new markets for test equipment manufacturers. Developing dedicated GigE test equipment will prove to be a fruitful investment.

Integrated Test Systems and Enhanced Product Features Will Shape Market Shares

Another market that shows a lot of promise is that of integrated test systems. There is sufficient demand for equipment capable of multi-function testing and few companies have introduced products that fall into this category.

Miniaturization is the latest fad with carriers preferring test devices that are based on the personal digital assistant (PDA) format. These instruments are easy to use and, therefore, reduce training time, besides weighing between 5 lbs and 8 lbs only. End users are interested in products that are truly hand-held rather than merely portable. According to Ms. Vepa, "New product introductions and enhanced features specifically tuned to address end-user needs are crucial to any T&M company's success."

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