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Technology Stocks : Ciena (CIEN)
CIEN 234.26+1.6%Jan 12 4:00 PM EST
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To: bill c. who wrote (1198)2/3/1998 1:15:00 AM
From: Tim Bagwell  Read Replies (4) of 12623
 
Until I see different I would assume that LU is doing the following...

They are specifying their system with 50 GHz (0.4 nm) channel spacing using a 32 nm EDFA band (near the limit of EDFA's) and stabilized lasers. That gives them 80 channels. However, current filter and optical routing techniques are not quite good enough yet for such tight spacing. So they may populate every other channel (spaced at 0.8 nm or 1.6 nm) for the present and offer an upgrade scenario when these elements become available. Then they can fully populate the 80 channels at some more modest incremental cost to the customer.

All this really involves is designing a system that allows for the future upgrade to be installable. I don't think many customers would feel comfortable installing more than 16 channels initially. They will more likely want to take it in steps until all the management kinks are ironed out. They have billions in revenue at stake.

So I still maintain that LU is playing with the numbers. CIEN could make the same claims with a more comprehensive plan for an upgrade path as new technology becomes available. I would expect CIEN to make an announcement of a similar product in the near future.

CIEN may run into one problem. They use lasers with diffraction grating mode selection and these may not be stable enough for the tight spacing. They may need an alternative source of lasers. Of course, LU has an internal supply but building lasers at 80 different wavelenghts is a major manufacturing headache and yield issue. Another reason why they will probably count on an upgrade process stretched out over many years.
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