Despite several years of the global downturn, the market for cabling and connector sis seeing a modest revival. Nick Flaherty reports.
Market researchers Bishop & Associates currently projects 2013 will see growth in the connector industry of 4.2 per cent to $49.1 million, with each quarter seeing slight sequential increases.
The profitability of the overall connector industry and of individual market participants can be tied to a number of factors from technology to economics.
Driven by a boom in broadband Internet users and the proliferation of bandwidth-hungry applications such as HD video, Internet bandwidth maintained by major Internet carriers has been expanding at 75 per cent to 125 per cent per year. In turn, public and private networks are experiencing unprecedented end-user demand for bandwidth resulting in a need to cost-effectively scale the capacity of communications networks and this is driving cabling in the enterprise and the data centre. Here power consumption is a key factor.[Page Break]
At the same time, as European economies begin to stabilize and see modest growth in their GDPs and the US avoids a political stalemate on the budget to escape triggering the automatic budget cuts/tax increases this will help drive investment in IT infrastructure in both industrial and enterprise applications, driving demand for cabling and connectors. With improving economic conditions in the Western economies, China will see their GDP growth stabilize and begin to improve modestly, providing a further boost, says the research.
However, the ongoing battle between copper and fibre systems continues to persist according to the latest report from Global Information (GII).
Product commoditisation is forcing structured cabling into the backseat when it comes to strategic thinking across IT departments. Cabling companies have responded by reinventing themselves and creating new value-added services in hopes of attracting attention from customers. Many no longer lead with cables and connectors, but have developed marketing strategies that address hot buttons such as cooling, with products to maximize airflow through the rack or cabinet. [Page Break]
In addition, firms like Panduit have developed pre-configured rack systems designed around a specific switch to reduce designing, planning, procurement, and installation time. Many of these racks are custom-configured to customer needs. It fits in perfectly with the concept of data center standardization and the implementation of PODs at a rack or row level.
Data centres continue to represent a major growing market for structured cabling. Spurred first by the growth of the Internet and now, in addition, by the global proliferation of smartphones and applications like on-demand video, the need for data center space continues to increase. Seeing this opportunity, many structured cabling manufacturers have developed programs specifically to attack this market.
The global structured cabling market has been characterized by its stable growth over the past several years, with the market growing at a compound annual growth rate of 6.8 per cent to reach $5.6 billion in 2011. Growth is expected to continue in the structured cabling market to exceed $8 billion by 2015. While the US still dominates this market, China and the Asia Pacific region show the most growth potential over the next five years.
The success of Gigabit Ethernet correlates to its strong presence with structured cabling. 1000BASE-T, 10G over twisted-pair copper (10GBASE-T) holds the promise of being less costly than its optical competitor, 10GBASE-SR. So it seems that high power consumption has been a market inhibitor. As power consumption efficiency is resolved through advances in transceiver-chip lithography, advances in driving down power consumption are breaking through.
Fibre cabling has taken a foothold in the network at 10G and is poised to steadily take market share from copper products in the structured cabling market over the next five years, says GII. While the copper structured cabling market is expected to shrink, there is still potential to recognize revenues, particularly in CAT6 UTP for Gigabit Ethernet and CAT7 for 10G.
40Gb/s networks already have a history of success and 100Gb/s rates are being introduced by major service providers and new standards support these developments. Meanwhile, industry analysts already are talking about 400Gb/s and even 1Tb/s interfaces, all of which impact on the cabling and connector technologies.
For more information, visit www.giiresearch.com