Summary
1. Even other suppliers do not necessarily believe that Nortel’s high-end optics business is finished. 2. While Nortel is in trouble financially and has a tarnished brand name, it has a huge installed base of long-haul optical equipment – and hence, customers it has already engaged with. 3. This positive view assumes that there is not a major change in support and that there will be ongoing spending on future development.
Analysis
On Nortel’s CPL platform, it is just a matter of buying the shelf and then adding 40G PM-QPSK cards. With 100G eventually, again it is essentially deploying whole new shelves to get to that speed.
Philippe Morin is sending an important message that R&D expenditures on optical equipment will go forward. We have recently written that Nortel already has some special technology at the high end.
One would suspect that Morin is relieved that the company’s focus is shifting away from carrier Ethernet to a sector that has a lot more potential. In addition, Morin’s experience has been mainly in optical networks and optoelectronics.
On CESRs, it is not as if customers did not by now have significant reasons to avoid that equipment. Nortel can talk all it wants about “sell[ing] these bits of kit,” but with it “no longer hav[ing] any big new features for, or revisions,” the products might as well be considered manufacturer-discontinued.
