Product development and price trends for fiber optic components

Numerous technological innovations have resulted in improved performance and a dramatic decline in prices for fiber optic components over the past 15 years, greatly increasing their market acceptance. As many new companies enter the market and with many other companies beginning to use fiber optics, both suppliers and consumers face challenging decisions in managing the technology. This paper outlines the market factors and technical events that have influenced the development of fiber optic components with the goal of providing insight into the strategic management issues. The author argues that while individual technical breakthroughs may be unpredictable, aggregate characteristics of the market follow a path that can often be anticipated. In support of this argument, and given the particular importance of price trends in the market, an equation is developed from historical data to forecast average prices for each of the major fiber optic component groups.