"Competition in the market for public network infrastructure is intense. Our
competitors include Alcatel, CIENA Corporation, Cisco Systems, Inc., Lucent
Technologies Inc., Nortel Networks Corporation and Sycamore Networks, Inc. and
several new companies such as Calient Networks, Inc. and Brightlink Networks.
The market for optical switching is expected to grow rapidly and therefore
will continue to attract competitors who will continue to introduce new
products. Therefore, we expect the level of competition to intensify over
time. Our established competitors have longer operating histories, greater
name recognition, larger customer bases and greater financial, technical,
sales, marketing and manufacturing resources, including more resources devoted
to research and development of new products, than we do. In addition, unlike
some of our competitors, we have only a limited ability to provide vendor-
sponsored financing, which may influence the purchasing decision of
prospective customers. Our competitors could develop new technologies that
compete with our products or even render our products obsolete. In addition,
some of our competitors have more significant customer relationships and
broader product lines than we have.
Our objective is to become a leading provider of intelligent optical
switches for global telecommunications networks. We believe that we have
achieved a number of milestones that will position us to meet this objective.
For example, we were the first in our industry to ship an optical switch to a
customer and the first in our industry to ship a high capacity, expandable
512-port switch to a customer. In addition, we were the provider of the first
optical switch to carry commercial traffic in a customer's network. We have
also entered into minimum purchase contracts with two well-known service
providers, Cable & Wireless and Qwest.
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For us to continue to compete successfully in this market, we must continue
to deliver optical switches that:
. can be easily expanded at low cost to meet the ever-increasing demands
driven by data services;
. lower a service provider's cost of building and operating an optical
network by reducing its complexity and increasing its flexibility;
. deliver a range of cost-effective solutions for small and large networks;
. operate with existing equipment and networks;
. comply with all applicable standards;
. increase the level of network reliability for data services;
. allow optical services to be delivered much more quickly and easily than
they are today; and
. provide software tools for service providers to plan, design and operate
their optical networks. |
