The backdrop to last month's European Conference and Exhibition on Optical Communications - a drip, drip, drip of bad news on job losses, plant closures and declining orders - was hardly one to inspire confidence in exhibitors, speakers and delegates as they convened for the industry's annual "talkfest" in the Danish capital.
At the opening session of the technical conference, David Payne, director of the Optoelectronics Research Centre at the University of Southampton in the UK, didn't dodge the fact that things are pretty dire for optical comms companies wherever they happen to sit in the supply chain. "Cost reduction is now the single most important issue," he told delegates, adding that the big challenge for vendors is to develop the enabling technologies - specifically, tunable devices and hybrid integration - that will be required once market demand returns. At the same time, he says, component and module makers will have to devote just as much effort to the development of lower-cost manufacturing processes and automated assembly.
Over in the exhibition halls, introspection was the order of the day. When it comes to strategy it seems that, almost without exception, manufacturers are trying to focus on a few back-to-basics themes. Put simply, hype is out, realism is in, and the only sure-fire way of making any progress during the slowdown is to try to add value (lower price, smaller size, minimal power consumption or enhanced flexibility) wherever possible. But despite a more measured mood than usual among exhibitors, there were still many companies with plenty to talk about. A case in point is Bookham Technology, the UK manufacturer of integrated optical components and subsystems, which used the show to unveil a much-expanded product portfolio, a result of its acquisition of Marconi Optical Components in February.
For Bookham, the future is all about disruptive technologies - i.e. silicon, indium-phosphide and gallium-arsenide optical ICs - and the cost reductions that those technologies can deliver to its systems-vendor customers. Equally significant, Bookham believes that the market's woes present their own opportunities. At least that's the line being spun by Giorgio Anania, the company's chief executive officer, who says that Bookham is "resolved to emerge from the current downturn as the [industry's] leading optical components business". Time will tell if that's just brave talk or something more substantial.
Encouragingly, it was good to see a raft of other exhibitors prepared to take the longer view on things. Worthy of a mention are Kamelian, which is hard at it fulfilling a sizable order for its semiconductor optical amplifiers; Optical Communication Products, which has just opened a European development centre that will strengthen its ties with key systems customers in the region; and Tellabs Europe, which chose ECOC to unveil its next-generation Synchronous Digital Hierarchy transport solutions.
Innovation aside, if ECOC was about one thing this year, it was about this: optical vendors are at last starting to recognize that it's not just about technology these days. What really matters is giving the customer new ways to save money, to make money and to add value. Pencil in ECOC 2003 in Rimini, Italy, to see if that message really hits home over the coming year.
By Joe McEntee, Editor-in-Chief, FibreSystems magazine group
• This article originally appeared in FibreSystems Europe special report: ECOC wrap-up issue October 2002 p3