The above quote from Andrew Schmitt is in an interview done by optics dot org
"Optical Comms Market Set for 100G surge in 2016
May 20, 2015
Take a look at the full interview and discussion of 100G trends
Andrew Schmitt is one of the most quoted and respected analysts in the optical network industry, leveraging over 20 years in the networking and communications industry including tenures at Vitesse Semiconductor, where he ran the carrier chipset unit, and Nyquist Capital, where he was a general partner at the investment consulting firm focused on the optical sector.
Andrew joined Infonetics (now IHS) in 2009 and leads its optical equipment and component coverage, authoring numerous market share and forecast reports, surveys, and opinion pieces on metro and long haul optical, WDM and ROADM deployment, packet-optical transport migration, OTN switching, and 10/40/100G+ adoption. As a consultant to startups, service providers, vendors, and the investment community, he helps clients identify new market opportunities, provides due diligence, and advises on positioning, product development, business plans, and M&A activity.
A highly sought speaker, Andrew frequently presents at events worldwide, including OFC/NFOEC, Fiber Optics Expo (FOE), and WDM & Next Generation Optical Networking. He is also regularly quoted in the press, including Light Reading, FierceTelecom, and Lightwave Online.
Andrew holds multiple patents, and earned his BS in Electrical Engineering at UCSB. He is based out of IHS’s Cambridge, Massachusetts, office.
Andrew Schmitt 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."
Look at slide 16 at the B Riley Conference Presentation, May 13, 2015 on the Oclaro Investor Relations website
Oclaro management has stated that breakeven EBITDA revenue in the final quarter of calendar 2015 will be $90 - $95 M with 20% GM's. The long term target for OCLR gross margins is 30 - 35% (comparable to FNSR).
The reason for this bump in revenue is the new award winning 100G CFP-2 ACO production ramps up with shipments into an existing backlog.
Currently the OCLR earnings release is August 11 - 17 and we should hear an update on this forecast.
AAOI +15.7% after hiking Q2 guidance; OCLR +8.1%
Jul 13 2015, 12:37 ET | By: Eric Jhonsa, SA News Editor Contact this editor with comments or a news tip
Advanced Optoelectronics (NASDAQ:AAOI) now expects Q2 revenue of $49.6M and EPS of $0.36-$0.38, above prior guidance of $43M-$45M and $0.25-$0.30, and a consensus of $43.2M and $0.27. Gross margin guidance has been cut to 33.5%-33.7% from 34%-35%.The optical component maker cites strong demand for cable TV and data center products, as well as its ability to ship 40G transceivers ahead of plan.Full Q2 results arrive on Aug. 5. Optical component peer Ocaro (NASDAQ:OCLR) is also having a good day amid a market rally.
The recent news from Oclaro management concerns a forecast of breakeven by the end of calendar 2015 based on volume sales of the award winning 100G CFP2 module.
We will get an update on this forecast August 11 - 17 and if Oclaro management holds to this forecast then the OCLR stock can start on a trajectory similar to NPTN after they went from loss to profit.
Concerning Soros he has all his options open but the big gain will come with the OCLR stock and profitability in 2016.
The analysts seem to have factored in the dilution of the note conversion into their projections.
NPTN is a competitor of OCLR with a 52 week low of $2.20 and a high of $11.
NPTN moved from loss to profit based on new 100G products and the stock took off.
Now it is OCLR's turn.
The basic issue about Oclaro is that they must increase sales of high margin products to achieve profitability.
The 100G CFP2 is the new Oclaro module which has not yet gone into volume production but has a backlog of orders.
Also, Oclaro has their own fabs which are capable of very large volume production.
The Oclaro management prediction is that 100G CFP2 volume production starts in calendar Q4 2015.
In August we will hear an update on this plan.
What happens to the Oclaro stock price if management does execute on the plan?
The recent sequence of events include:
1. Soros buys into convertible offering and declares 10% ownership of Oclaro
2. Oclaro wins Lightwave Innovation Award for 100G CFP2 module
3. Oclaro management predicts breakeven by end of calendar 2015 based on backlog of orders for 100G CFP2 and volume production starting in late 2015
4. Oclaro management and directors buy OCLR stock in support of their plans
Currently we are in the quiet period so there is no new news.
The next OCLR quarterly report is due August 11 - 17
The Oclaro 100G CFP2 module has a backlog of orders and goes into volume production in the calendar Q4 2015 quarter. This is the big news that will move Oclaro into profitability.
Concerning the OCLR stock, the volume shows that someone is acquiring a big position.
Lightwave Innovation Award Panel - 2015
Our panel included:
Jim Benson, Jr., vice president, Americas, Coriant
Robert Blum, product marketing director, Oclaro
Brandon Collings, CTO, Optical Communications, CCOP, JDSU
Frank Effenberger, Huawei Fellow, Vice President Access R&D department, Network product line, Futurewei Technologies
Jim Hayes, president, The Fiber Optic Association
Daryl Inniss, vice president & practice leader, components, Ovum
Vladimir Kozlov, founder and CEO, LightCounting
Patrick McLaughlin, editor in chief, Cabling Installation & Maintenance
Rick Talbot, principal analyst, optical infrastructure, Current Analysis
Jim Theodoras, senior director of technical marketing, ADVA Optical Networking
Dr. Tiejun J. (TJ) Xia, Distinguished Member of Technical Staff, Verizon
Oclaro Coherent CFP2 Pluggable Module
March 17, 2015
Author Lightwave Staff
This is a whole new way of addressing the coherent ecosystem by putting optical components in the module and electronics on the board, where both belong. Judge's Comment.
The Coherent CFP2 module is a transceiver offered in a pluggable format. The small form factor increases density at the faceplate, reduces power dissipation, and optimizes optical performance, Oclaro says. The flexible design can support both 100G PM-QPSK and 200G 16QAM with the appropriate DSP and driver technology.
The module leverages Oclaro's indium phosphide photonic integration technology, which results in high optical output power. This is important for systems that use linear modulation schemes, Oclaro says. The pluggable format means that customers can minimize installation costs and scale networks by adding capacity over time, the company adds.
Will the shorts cover before the next OCLR earnings report (August 11 - 17)?
At what price?
Let's not forget that this is the news that set off the OCLR stock.
We will get an update on about August 11 at the quarterly conference call.
I just read the FNSR CC and 100G CFP2 is the new hot product.
Analysts asked about the OCLR competition in 100G CFP2.
FNSR says that 30%+ GM's are expected for 100G CFP2.
Oclaro has an award winning new product with the 100G CFP2 and the Oclaro fabs give the capacity to ramp up volume production.
The 100G CFP2 goes to volume production at the end of 2015 and the Oclaro fabs should be at high utilization in 2016.
Oclaro management is predicting gross margins of 30 - 35% in the same range as FNSR.
Oclaro has a huge tax loss carry forward which can be used to offset profits for OCLR or an acquiring company. In an acquisition this can be a significant factor in the valuation for a profitable company such as Cisco.
Chief Commercial Officer
Dr. Carter has served as Oclaro’s Chief Commercial Officer since July 2014. Prior to joining Oclaro, he served as the Senior Director and General Manager of the Transceiver Module Group at Cisco from February 2008 to July 2014, where he was instrumental in the acquisition of Lightwire, a Silicon Photonics start-up. He also served as Cisco’s Marketing Director from February 2007 to February 2008. From September 1994 to February 2007, Dr. Carter held various strategic marketing and business development roles at Avago Technologies, Agilent Technologies and Hewlett Packard. In addition, Dr. Carter was a Process and Device Engineer at British Telecom & Dupont from November 1989 to September 1994. Dr. Carter holds a B.Sc. (Honors) in Applied Physics from Portsmouth University and received a PhD from the University of Wales, Cardiff, for his research on plasma etching of III-V semiconductor materials.