1. When the Carrier panelists [Verizon (VZ), AT&T (T), BT Group (BT)] spoke of SONET/SDH, they used the past tense. “When we used to build a SONET/SDH ring.” They appear to have subconsciously moved on.
2. According to Ryan Limaye from Goldman Sachs, Sanford Bernstein issued a report analyzing what would happen to the Telcos if they became a dumb pipe. The result? Much smaller, but more financially efficient companies with a better return on equity. None of the carriers, with the exception of British Telecom, were open to the idea of being a dumb pipe.
3. Equipment guys are asking for 40Gb/s components, and component vendors are giving them the finger. The fact that component vendors no longer allow equipment vendors to outsource R&D with a low ROI is a very positive development for this business. People are finally saying no.
4. 40Gb/s demand pressure is from carriers who deployed the Cisco CRS-1 router and need something to hook it up to. Stephen Carlton from Fujitsu kicks in that 40G muxponders make up the other 50% of demand. Many speculate 40G will be bypassed altogether in favor of 100Gb/s Ethernet using new modulation schemes.
5. Jerry Rawls from Finisar (FNSR) - “It is impossible to deliver the level of R&D expected by customers given current margin levels.” “Custom Tweaked Requirements are hard coded into the Telecom psyche and may be impossible to remove.”
6. Fariba Danesh from Avago (private) - ”Finisar pricing is making things difficult for us” (I didn’t get a precise quote… but this definitely was the gist).
7. Jo Major from Avanex (AVNX) - “Huawei still tends to buy at the component level.” Something I’ve covered in depth (see Dr. Strangelove, Or: How I learned to stop worrying and love Huawei.)
8. Mike Nishiguchi from ExceLight - “Optical Modules are footprint compatible, but the components that go into them are not. Why? We should think about this.” On outsourcing (heavily paraphrased): “The Japanese are not good at giving people titles and job descriptions. This is because they are not good at partitioning responsibility. And this is why I believe Japanese companies are not good at outsourcing their manufacturing.”
9. Gary Wiseman from Intel (INTC) promises $150 SFP+ module in 2008. Claims 10G-BaseT will be delayed due to 2.5us latency, 6W of power, and new cabling. He clearly wants to keep copper interconnect out of 10Gb/s.
10. Stephen Carlton from Fujitsu (OTCPK:FJTSY) - “Don’t design your network for Video because much bigger drivers exist in the near future. Japan is trailblazing these applications with a cashless society, hyper-mobility, and other application innovation. Their greatest lead isn’t in FTTH, it is in application innovation.” Example: Take a photo of your sushi and your mobile will tell you when it was caught and what boat it came from. Stephen’s comments were unique and a refreshing break from the “Video Broadband Explosion” cited again and again by many talking heads.
Many of these quotes are paraphrased, though I feel I captured the intent of the speaker. If I did not, please speak up.
Full Disclosure: Author is long Finisar.