He said his friend Alain knows many people and things are slowing fast and expect a drop over six months.
If Alain was in charge he would know what to do in this time. We need Alain back.
Andrew Schmitt (Infonetics) expects to see a significant change in the 100G datacenter market place next year: “All of the key components needed for low cost 100GbE will be in place, including QSFP28 optics. The large internet content providers are all planning to shift to 100GbE in 2016 and this will drive enormous sales volumes.
“The main types of optical communications devices in demand will be CFP2-ACO [CFP2 form factor pluggable analogue coherent optics] based on indium phosphide. This will be the breakout technology for photonic integration. I don't think 2016 will be a breakout year for silicon photonics, except in PSM4 QSFP28 applications, which will ramp.”
So which suppliers can expect to have significant market positions if these forecast changes come to pass? Schmitt commented, “I think the leader in CFP2-ACO will be Oclaro."
re: Metro upgrade deployment cycles are slow but it appears that the Telecom carriers are waiting for large scale new design 100G production....
Granted, this new metro equipment will mean an explosion in 100G ACO port shipments next year as Infonetics has been spouting. Terms like explosion boosts sales for their reports. However, the big question for the optical players is how many of those ports will actually be put into service? Until they specifically see an explosion in optical modules shipping in 2016, then I wouldn't get so worked up about this. Ports are there for future network expansions. The street isn't convinced the carriers are in any urgent need to populate any more of these ports than is necessary. So a massive shipment of ports does not mean a massive shipment of modules...necessarily.
Break even would be most welcome. I'd probably dance a jig in that event, its been a long time coming. Think mirage in the desert.....
FNSR has a number of issues now with the transition from 10/40G to 100/200/400G, and Oclaro is in a different situation after a restructuring (headcount down from 3,000 to 1,300) and big investment in new 100G products.
You are assuming that all the 100G market segments are the same while Oclaro is focused on CFP2 ACO with a $200 million projected market in 2016. OCLR can do quite well in 2016 by just ramping production of CFP2 ACO where they have a clear lead and a backlog of orders.
Metro upgrade deployment cycles are slow but it appears that the Telecom carriers are waiting for large scale new design 100G production which does not even start for most of the vendors until the second half of 2016. The optical analysts are predicting a strong 100G metro cycle in the second half of 2016 throughout 2017.
The datacenter market is much faster moving and if you read the OCLR management presentations, the focus of 100G sales. now. Dr. Adam Carter the OCLR Chief Commercial Officer joined OCLR from Cisco where he was GM of optical modules. We can assume that he knows the datacom customers/applications well from his 8 years with Cisco.
In 2016, OCLR should show strong growth in revenues and profits. While you can say that the inevitable will eventually happen, this should be after OCLR stock has a big run in 2016.
Are you saying that all transceiver markets move in lockstep across the globe? Is it not likely that some markets might feel urgency to upgrade and others do not? Just asking - I don't know.
I agree that as a public company, Finisar can no longer compete with the gov't supported Chinese vendors at 10-15% GMs for 10G. Nothing new, the market has always anticipated this, but this time the next generation product ramps are late and we have all seen the consequences.
In the past upgrade cycles there was a key term that is not even heard today: urgency.
There is none for 100G metro. The urgency was in the 100G LH trunks, but that's all done now. 100G ramps mid next year which only means, volumes will pick up. There is no urgency for the carriers to rush. They can address the critical networks and choke points, and adopt an upgrade as needed basis. If this happens it is the worse of all possibilities for industry leaders. What the leaders need most is for a massive metro upgrad within the next two years. It may happen but where is the urgency. A few years ago, Finisar was telling everyone at their investor conferences about how "hot" all of these networks were running, etc. Today, we are hearing of nothing but pushbacks that are due to many reasons, but they are troublesome, to say the least.
What all this means is that the only industry lead that going to make any difference is price leader as lowest price will win the largest market share. The network technicans do not approve the equipment orders, that rest with the bean counters and they are very sharp. They know the longer they delay, more competition entering only means better pricing. To sum it up, wall street thinks most of opticals will continue to struggle throughout next year, and they will still be suspicious of those that do best just as they have been of Finisar for the past few years. They know the inevitable will eventually happen, so nobody is going to risk much on these plays.
I've never noticed that Oclaro tracks any of the indexes particularly well. It tends to do it's own thing. Plus I do believe that it is highly manipulated by shorts and other nefarious types in the finance industry. We hope that the stock will do well in the coming quarters, but we can't know that for sure. OCLR does have an unfortunate history of not following through on it's "forward looking statements". I feel the new CEO is very different from past leaders and may be able to break the trend of his predecessors. That, or he is prepping the company for sale and doing all he can to get a decent offer.
FNSR is the cause of the sector weakness as it becomes apparent that NPTN and OCLR are ahead of FNSR in the 100G development cycle.
Right now we are at change point in the optical components market. OCLR has the opportunity to be the 100G leader at industry average 30% GM's in 2016.
The shorts are playing the doubt card and OCLR management will need to execute on their plans to erase doubt issues which cannot be proven or unproven now.
Short? Really? Should I be calling you Pumper then? You cant dispute the facts that investors are not buying what management is saying at the present time hence the drop in share price. Also they don't believe the outlook is good at all for the ENTIRE sector not just OCLR which is why ALL are down and down a lot.
I would love for you to be right gray and maybe in 6 to 9 months you will be but as for today nobody knows how low this or others in the sector will go.
What gives is investors dont believe management and the pretty picture they painted when the entire sector is taking a beating. Stock price says it all.
There has been a concerted effort by shorts to bring down the OCLR price as evidenced by the Friday afternoon high volumes during the last few weeks. A classic short tactic is dumping stock during the last 30 minutes on Friday afternoons since they can be both a seller and buyer.
The next real news will come in about 30 days upon the OCLR quarterly results.
OCLR breakeven should be this quarter just finished on September 26 or the current quarter ending in December.
Breakeven and ramping of the new 100G products should make for an interesting 2016.
Here we are, given up all our gains, and on a day with the market up 200plus points we are DOWN! Not even sure how that works. End of quarter selling? Big boy want out?
If this company's prospects are so bright, how come we are in the ditch? This is frustrating.