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Increased adoption of tunable lasers supporting high speed networks will also drive component makers toward profitability, with further photonic integration for all-optical networks holding promise for the future.
High-bandwidth video services, like HDTV and VOD, as well as enterprise storage networks and backhaul from emerging 3G/4G wireless standards, will require increased network capacity. Providing the extra wavelengths to meet this seemingly insatiable bandwidth demand will translate into strong growth for InP- and GaAs-based lasers and photodetectors.
"Fixed wavelength InP transmission lasers currently represent the largest share of revenue for this market," observed Asif Anwar at Strategy Analytics. "These will increasingly be replaced by tunable lasers, especially for linecards in high-capacity DWDM systems. Higher data rate standards will Also require more advanced detector technology, for which detector chips will sell for hundreds of dollars."
It also said that the annual growing networks will be 40Gbit/s, growing at a CAGR (compound annual growth rate) of over 81%. Networks operating at 10Gbit/s will take over from 2.5Gbit/s as the largest revenue share of the Market.
Meanwhile, the growth of 10GbE and 10G Fibre Channel will be another important driver of this market, and begin displacing copper from the enterprise. 
InP-dominated fiber optic optoelectronics market will grow to $3.9 billion in 2013
USA - The market for optoelectronic components - including transmission lasers, pump lasers and photodetectors - is projected to grow to $3.9 billion through 2013, according to the latest Strategy Analytics ( http:// ) study, "Fiber-Optic Optoelectronics Market 2008-2013."