On a larger picture, WDM is HUGE, both in Long haul, and the metro area.
Moreover, much more $ will be made in the metro area than the long haul, according to a projection by a BT executive at the OFC'98. The reason for this is the great flexibility for provisoning service transparent with regard to protocal, data rate, etc. It also alows carriers to sell "color" (individual wavelength) to different customers, but share same fiber with other customers. With the explosive data traffic, the total fiber in the local loop and metro area will way out pass the long haul. This is really an untapped and emerging market. My concern is more of how CIEn will capitalize on the opportunity faster than competitors.
My take on small order from Bell Atlantic for WDM is that this is only first "trial" run on the technology. After all, the $1.5B is only a very small fraction of total capital spending planned by BA. I'm sure more order will come.
The 50% allocation for WDM equip. for each among CIEN and LU did not supprise me either. As a metter of fact, this is consistent with what I heard from an ATT executive at OFC'98, who stated that it's a matter of policy to multi-source vital equipments, such as DWDM equip. LU is clearly catching up with CIEN. But as long as the pie is growing fast, both CIEN and LU will win out.
I hope today's price movement is only the fund managers rotating their money--can be a good buying opportunity.
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