The Lightwave Blog

Posted by Stephen Hardy

Here is JDSU's official take on Gudmundson's move:

The JDSU Optical Communications and Lasers segments are being combined into one segment called Communications and Commercial Optical Products (CCOP). This combination will enable JDSU to leverage its technology, its manufacturing model and its people to continue to improve profitability. Alan Lowe will assume the role of President of the Communications and Commercial Optical Products segment. David Gudmundson, who has driven the strategy and positive change for Optical Communications, will serve in an advisory role.

Lowe previously headed up the Commercial Lasers business.

Labels: Gudmundson, JDSU, Lowe

Posted by Stephen Hardy

While attention has focused on President and CEO Kevin Kennedy's imminent departure from JDSU, he's not the only example of high-level personnel shuffling at the company.

According to the same October 30 8K filing that details Kennedy's news, Executive Vice President and President, Optical Communications Products Group David Gudmundson stepped down from his position as head of the company's optical comms business to become vice president, senior advisor, optical technologies on October 28.

I've got a query into JDSU to find out more.

Labels: Gudmundson, JDSU, Kennedy

Posted by Stephen Hardy

As reported by Morgan Keegan's Paul Bonenfant, Opnext President and CEO Harry Bosco yesterday morning told the audience at Cowen and Company's 20/20 TMT Conference in New York that the reason he hasn't executed a previously announced stock buy back is that he's "looking at different things" now that the acquisition price for companies has come down. In particular, he said, he's looking at high-end optics, specifically 40G and 100G module and technology companies. "Some are small and some are fairly significant," he said.

Bonenfant identified Mintera and StrataLight as the two most prominent companies of interest. He believes a StrataLight acquisition is more likely, given the fact that JDSU has invested in Mintera. The fact that StrataLight supplies technology to Nokia Siemens Networks, as does Opnext, doesn't hurt either.

One company that Bonenfant didn't mention that Opnext also might be looking at is CoreOptics. The company is already active in 40G development as well as coherent detection technology for 100G. (See my May 15 blog posting below.) The fact that the OIF has decided to build its 100G DWDM implentation agreement around dual-polarization quadrature phase-shift keying with coherent detection indicates that CoreOptics is moving in the right direction for 100G.

Labels: CoreOptics, JDSU, Mintera, Opnext, StrataLight

Posted by Stephen Hardy

JDSU's Superblade announcement was one of the highlights of last week's OFC/NFOEC. The integration of a wavelength-selective switch (WSS), EDFA, pre-amplification, and optical channel monitoring (OCM) onto a single-slot blade with its own OSS certainly represents a step forward in terms of functional integration.

A few hours after the Superblade announcement, I visited the booth of Israeli EDFA and OCM specialists RED-C Optical Networks. A source there said that his company had attempted a similar integration in 2006, combining in-house EDFA and OCM expertise with Capella's WSS. The source said the combination hadn't been as warmly received as RED-C and Capella had hoped, mainly because systems designers didn't want to give up software control of the WSS.

RED-C has a partnership with JDSU, so I asked the source if his company had passed along its experiences to JDSU. The source said they had, but that JDSU suggested that RED-C's experience was a couple of years old and the market was now ready for what the Superblade has to offer, including the OSS.

Contacted later at his booth, JDSU's General Manager, Subsystem Products, Optical Communications Doug Alteen said that his team hadn't heard about RED-C's experiences. He added that the OSS doesn't prevent the host system from controlling the operation of the blade.

Labels: JDSU, Red-C

Posted by Stephen Hardy

Remember those "lean manufacturing" initiatives we heard optical component and subsystem companies blame for last year's poor start? (See here and here for reminders.) Well, they're not over yet -- they're just moving farther down the food chain.

In a recent conversation, JDSU's Craig Iwata, senior director of marketing and business operations, told me that the adoption of lean business practices by systems houses last year had two major effects. The first was that it gave the systems vendors an opportunity to re-examine their inventory requirements; several decided they didn't need to carry as many spare parts, which led to the aforementioned slowdown in orders.

The second effect was a shortening of lead times, down to three weeks in some cases. So what can a company like JDSU do to meet these reduced lead times? Why, institute lean business practices itself. The company feels so strongly about its decision that it's hosting a webcast on the subject February 13. (Find details here.)

You can't blame JDSU and other subsystem vendors for taking this approach. But this certainly can't be good news for component suppliers to JDSU and companies of its ilk. They already suffered a trickle-down effect from the spread of lean practices at the systems level in 2007; a repeat at the subsystems level suggests component companies will see another year get off to a rocky start.

Labels: JDSU

Posted by Stephen Hardy

In light of today's announcement regarding the partnership between JDSU and Mintera, it's clear JDSU believes the 40G market is worth pursuing. This belief comes from the company's insight into the RFPs their system house customers are fielding, according to Director of Product Marketing Craig Iwata.

"JDSU is involved in pretty much every transport RFP that's out there. And they're all coming through with requirements for 40-gig," he told me.

While there's a difference between requiring 40G capability and actually fielding it, Iwata also told me that the market research community is backing this viewpoint as well. As part of the presentation he and Mintera's Niall Robinson delivered to me last week, Iwata said that when you look at the 40G line-side interface forecasts from CIR, Infonetics, and Ovum-RHK, the average unit CAGR for 2008 through 2011 is 100%, with their respective hockey sticks all taking a distinctly upward turn beginning in 2009.

Neither Ovum-RHK nor Infonetics have much on the public parts of their websites covering their 40G forecasts. You can find a little bit about CIR's view here and here.

As usual, the big issue will be cost, Daryl Innis of Ovum-RHK told me. "There's still a serious price problem. The cost of a 40-gig line card is something like five to six times the cost of a 10-gig line card. Until that cost comes down, that's going to limit the growth rate of 40-gig," he said.

I think there's mounting evidence that there will indeed be a market for 40G technology, particularly in the long haul and ultra long haul. (Which probably translates into a "good" but not "great" market.) Certainly 100G will eventually overtake 40G in terms of popularity, but that's going to be a fairly long time coming. The standards have to be put in place first -- and if 40G technology currently is 5X to 6X your average 10G system, one can only imaging the price differentials of the first and even second generations of 100G platforms.

Labels: 40 Gbps, 40G, JDSU, Mintera