Communications continues as the flagship of the electronics industry. With the PC market saturated and virtually every electronic product on the planet already containing at least one embedded controller, it's no wonder communications products are setting the pace. Without communications, electronics would see no growth, and most of that growth is coming from the oldest electronic application of all—wireless. Here is a look at some of the growth areas of communications.
Aside from wireless, the number one growth sector in communications is security. More dollars will be spent on security than any other IT segment in the coming years. While certainly not a new subject, security is finally getting attention from most companies. By adding firewalls, encryption, and authentication and implementing virtual private networks (VPNs), security is improving by orders of magnitude over a decade ago. The impetus is terrorism, a rise in spam and viruses, and hacking. More and cheaper security chips now enable encryption and authentication to be built into many products. Even the wireless-LAN (WLAN) security problem has been licked, so companies can rest easier as their employees move en masse toward the mobile convenience of WLAN.
The optical industry continues in its slump primarily due to the ongoing downturn in the telecommunications sector. With excess fiber capacity and the remaining effects of the dot-com bubble, telecom is expected to decline again this year with no growth until 2005. This is not good news for wide-area optical networks.
But there is some activity in metropolitan-area networks (MANs) thanks to low-cost optical Ethernet options now available. The legacy local-area-network (LAN) sector is basically flat, but there's some activity in adding optical backbones with 1- or 10-Gbit Ethernet (1GE, 10GE). Running 1GE twisted pair to the desktop is growing as the new PCs incorporate the 10/100/1000 Ethernet chips. The biggest LAN growth is coming from wireless.
While not a major growth sector, the optical business continues with new developments but at a slower pace. The result of years of consolidation is beginning to show in new and better optical components. Faster SERDES (serializer/-deserializer), switch matrix, and transceiver chips are now available to take on the forthcoming 10-Gbit Sonet/Ethernet boom that will surely hit once the economic pace picks up. Although work on 40-Gbit/s parts has slowed, it continues in the background to prepare the way for OC-768 (40-Gbit/s) Sonet and maybe even faster Ethernet systems.
New optical components are also available. Leading the pack are vertical-cavity surface-emitting lasers (VCSELs) and affordable tunable lasers. Standard-size optical modules for the 1GE and 10GE markets are now available from several manufacturers and will make optical systems even more affordable. Additionally, products for coarse and dense wavelength-division multiplexing have been fine-tuned and expanded.
VOICE OVER IP
The technology for transmitting voice over packet data networks has been around a while, but few have been brave enough to abandon their traditional systems for phones that use the house Ethernet wiring and Internet connections. This has given the chip and equipment vendors time to improve their products, making them almost comparable in cost and function to standard phones. So voice over Internet protocol (VoIP) is starting to gain acceptance. Larger companies are replacing their PBX systems with VoIP equipment. The Internet becomes their long distance carrier. With the new power-over-Ethernet standard, IEEE 802.3af, a VoIP phone can get its dc power from the CAT5 LAN interconnection, just as standard phones receive their dc power through the modular connector from the central office.
Look for VoIP growth to take off. On the downside, though, the government hates it because it can't use wiretaps. But that problem could get fixed.
Today, about 58% of U.S. homes have Internet access. With 62% of that still using dial-up and only 38% using broadband service, there's still room for growth in this sector. Cable TV leads by a large margin with DSL second and all wireless methods trailing at a distance. That is changing, however. While cable will no doubt increase its lead, phone companies are really trying with DSL, and there's renewed interest in wireless options. Furthermore, a power-line option is also in the works.
A wireless technology that has made major progress recently is radio-frequency identification, or RF ID. This technology has been around for years in toll collection, pay-at-the-pump gas stations, and security/access systems. But volume applications have eluded this technology due to costs and lack of standards. Now it looks like the RF ID industry has found its killer app: supply-chain management. Companies are beginning to use RF ID in large volume to track crates, pallets, boxes, and smaller packages for inventory and shipping. Gillette recently adopted RF ID to track its millions of razors and blades packages. Concurrently, work on standards continues, and that should further the cause of RF ID more quickly.