Would Nokia Sell AlcaLu’s Optical Landline Business?

May, 2015

A few years ago, Nokia decided to unload NSN’s optical networks division to focus more on the wireless sector. Now, with the proposed acquisition of Alcatel-Lucent, it will be entering the fiber optic business once again, only this time taking on a comparatively gigantic piece of the pie. While there would be some potentially attractive aspects of the product line including for backhaul applications, it would not be completely surprising if Nokia were currently thinking about divesting the entire optical segment down the road because the market has only worsened since its sell-off to Marlin Equity Partners. The expected spinoff of the submarine optics portion of the business makes the remaining product line even less desirable because as a general rule, the margins tend to be much higher with subsea because in cases of new construction, customers require a full turnkey job including...

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ADVA Should Look at Buying Xtera

September, 2015

ADVA Optical Networking’s CEO mentioned that it “is considering a ‘larger deal [than the Time4 Systems purchase] more in the mid-term’ that could give it access to a new group of customers,” according to a recent article in Light Reading. Xtera Communications, which we suspect would love to find a graceful exit opportunity, and so it would presumably be amenable to a price quite attractive to ADVA, somewhat fits the bill, even if it is not necessarily "small enough to absorb into...its operations in a pretty seamless manner." Xtera is a pure long haul/regional play both on the submarine and terrestrial sides of the network, offering technology truly unique in the industry. Actually, it is that very last aspect that could be the most interesting to ADVA. More important than any products the supplier will introduce as a result of the Oscilloquartz acquisition, taking over such a...

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Xtera IPO an Act of Desperation?

November, 2015

Apparently, Xtera Communications’ desire to exit the optical business can no longer be characterized at all as graceful, but as somewhat frantic. There had been speculation in the industry that the supplier had even backed out on the idea of filing the S1, and then afterwards, it cut the terms of the IPO in half. There is no question that IPOs universally have been deferred lately as a result of market instability. Although Xtera has truly compelling technology that amply differentiates itself from other vendors, the lack of a sexy story will not necessarily endear itself to investors. Also, they will probably be wary when it comes to its presently high level of customer concentration. However, if it is able to amply demonstrate a need for its technology by a number of the hyperscale data center players in the foreseeable future, then it may have a shot at attracting at least a...

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Nokia Directionless in Optics Space

September, 2016

An industry observer might ask a Nokia executive about its plans for 400G and there is a good chance that the response is more likely to be a general one reflecting a lot of uncertainty over what major moves to make in the optical marketplace. The commodity-like atmosphere affects other large vendors in the space as well with limited opportunities to differentiate with value-added software in the vast majority of the business. Yet, given its roots, culture, and organization, Nokia is uniquely searching for options that are likely beyond its reach or may just not turn out to be that attractive for future growth. Some of Nokia’s loss of market position has been self-inflicted. During Verizon’s unprecedented push with GPON, the supplier was the dominant force. With NG-PON2, it appears that the vendor may not even get a seat at the table for Verizon’s next big push, which like the...

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Infinera’s Biggest Concern is Ciena

October, 2016

A commonly heard phrase over the years has been that nobody gets fired for buying from Cisco Systems. When it comes to optical networking products, we have reached the stage in which the same can be said for Ciena, although we believe it has come about despite its top leadership. While both Infinera and its archrival continue to benefit greatly from the US government protection from Chinese competition, which in our opinion is for no legitimate reason, customers are obviously going to think at least twice before buying from the PIC-fixated supplier because once again, its seems that its long-term survival is in doubt. As usually the case, listening to one of Infinera’s quarterly earnings calls along with seeing the slides associated with the event, always raises more questions than provides answers. After its latest conference, we have the following 14 inquiries for the top executives...

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