POET's Roadmap 2017
Dr. Suresh Venkatesan - please (extract from Investor Presentation oct 2016 & MD&A Sept 2016 (published 28 Nov.)
As we enter the product development phase for the photonic engine technology, we will now be focusing our efforts on meeting specifications for targeted photonic products, starting with active optical cables for the data communications market. Product development activities are iterative, and include optimization of designs, testing the manufacturability and reliability of prototypes, and demonstrating required scalability and cost parameters.
We expect that the product development phase for the POET technology will comprise the majority of the coming 2017 calendar year, with initial commercial revenues for our photonic engines expected in calendar 2018.
So let’s now go through our addressable markets today. We are focused, as we mentioned, on photonic sensing and data communication. In the near term, our product revenues will be largely driven by photonic sensing. That is where we’re seeing demand, we’re investing, and we’re growing the customer base, and growing our revenue. We will build that revenue up with discrete and integrated lasing solutions in 2017 and thereafter we would be migrating towards the longer reach transceivers and the active optical cables, in that order.
So let’s spend a little bit of time on photonic sensing.
We have products in the market today, we’ve got the most broad portfolio of photonic sensing high-powered LEDs today, and we’re servicing that market across a variety of verticals:
Photonics Sensing:
1) Test & Measurement (TAM: $10B), which includes monitoring equipment for communication, components and material testing, as well as sensing equipment such as distributed temperature and strain measurement;
2) Structural Health Monitoring (TAM: $6 billion), which includes devices to monitor the power grid, and fiber optic-based sensors in rail lines, nuclear facilities, etc.;
3) Guidance and Navigation (TAM: $4.5 billion), which includes navigational guidance systems, gyro-compasses, and optical-based systems for navigating self-driving automobiles;
4) Medical and Health Care (TAM: $2.5 billion), which includes devices for non-invasive blood glucose monitoring, pulse-ox devices, and ophthalmic examination.
These are all high growth markets addressed by the current and expected new products from our DenseLight subsidiary.
We have a plan to expand our roadmap in this space over the next year to include short wavelength high-powered LEDs where some of the POET technology and POET IP will be brought to bear and we’re also expanding the reach of our broadband light sources so that spectroscopy and other applications can be more readily available at lower cost to more customers and more consumers.
and Data communications:
Discrete lasers and integrated lasing solutions. It is a big market today driven by fiber to home. Fiber to home is big in Asia today and is expected to be big in terms of growth in Europe and the United States as well. And data centers of course, as we’ve talked, about are growing at a tremendous push.
Through our DenseLight subsidiary, we provide discrete and integrated lasing and receiving solutions, for data centers as well as for Fiber To The Home or X (FTTX) applications. The FTTX market generally refers to the Passive Optical Networks, or PONs, that telecommunications service providers deploy. The most commonly deployed PON technology is Gigabit PON, or GPON, which delivers up to 2.5 gigabits per second (Gbps) of data, but due to the splitting of the bandwidth among multiple users, the actual bandwidth delivered to an individual subscriber is far less than 2.5 Gbps. One approach that does support true 1 Gbps service to the home is wavelength division multiplexing PON, or WDMPON, a technology that enables the transmission of multiple wavelengths of data over a single fiber optic strand.
DenseLight currently provides discrete devices for this application.
Both of those market segments are driving the need for indium phosphate-based lasing and receiving solutions. A big chunk of that market is discrete, that we participate in today, and we would expect to disrupt that market by bringing some of our IP, from an integration standpoint, into that market.
One of the points I want to note, in this particular slide on the right, you will see that discrete solutions make up a majority of the sales in terms of unit volume. However, if you look at the market size in terms of revenue, you will see that the integrated solutions drive most of the revenue. And this is an example of how you can aggregate value with integration. The more you can integrate solutions, the more value you can drive, the higher ASPs (average selling price) are for that particular part.
So our goal is to layer the revenue stream from photonic sensing with discrete and integrated indium phosphate lasing and receiving solutions as the next layer, if you will, of our revenue and our product portfolio.
And following behind our discrete and integrated lasing solution are solutions utilizing our POET integrated opto-electronic technology. We’ve talked about the technology currently being in the development phase and being readied for commercialization in 2018 with the first market being active optical cables. The market is continuously seeking to replace traditional copper-based links with optical interconnects at increasingly shorter transmission distances. The challenge has been cost and that’s what POET is going to drive to address with its integrated optical engine. We believe we can lower the power consumption dramatically over copper cables, it can be a smaller size, form factor and cost competitive with copper solutions, and it brings to bear some of the other advantages of optical cables such as weight, size, the ability to increase face blade density on servers, electromagnetic interference in links, etc. That is our path to driving revenue in the active optical cable segment, starting in 2018.
Our financial overview. Let’s talk about monetization of this technology. We’ve got multiple potential sources of revenue that we are working on. Of course immediately today we’ve got revenue from product sales. And product sales will continue to be a good source of revenue and a primary source of revenue for us in the coming years. That is, through sales of products using photonic sensing, through sales of products for lasing as well as transceiver chip sets for data communications and consumer applications.
We are working with customers and partnerships that can drive NRE revenue into the company over the next year(s). NRE revenue can take multiple forms. It can come in the form of offsets, it can come in the form of custom development programs, and it can come in the form of technology transfer licensing agreements. And we are working on all three of those today.
So finally I’d like to summarize with the following points. We have established product sales today in large and high-growth photonic market segments with our recent acquisitions. The revenue is expected to exceed $1.6 to 1.8 million in the second half of 2016, driven primarily by sales of sensing products. We expect 2017 revenue to grow year on year, again driven by component sales in both photonic sensing and lasing. Our DenseLight business unit is expected to reach positive operating cash flow in the second half of 2017.
The POET technology is poised to disrupt multiple adjacent markets. We are engaged with and anticipate high customer demand for our integrated photonic solutions. New solutions relieve current cost and power pain points in data communications in a way that only POET can address. This allows us to create and capture significant value through photonic integration, we walk our way up the value chain. The more components we integrate, the more value we keep, the more value we capture. We’ve got a very high capital efficiency model with a fully-equipped photonics manufacturing facility and we’ve got a source of sustained competitive differentiation with a broad portfolio of patents that protect us and provide a barrier to entry. In short, we’re positioned for strong revenue growth, market expansion and profitability. And with that I’d like to conclude and I thank you all for your kind attention.
Thank you.
Links:
POET’s Investor Presentation oct 2016
https://docs.google.com/document/d/1ePv7UQtM1...9Vdg/edit#
MD&A Sept 2016 (published 28 Nov.2016)
please see Sedar
http://www.sedar.com/DisplayCompanyDocuments....o=00003983
Sound:
https://www.youtube.com/watch?v=JhhjhHWSoi8
Cheers
[url=http://http://agoracom.com/ir/POETTechnologies/forums/discussion/topics/681246-poet-s-roadmap-2017/messages/2131046#message]Source[/url]
Dr. Suresh Venkatesan - please (extract from Investor Presentation oct 2016 & MD&A Sept 2016 (published 28 Nov.)
As we enter the product development phase for the photonic engine technology, we will now be focusing our efforts on meeting specifications for targeted photonic products, starting with active optical cables for the data communications market. Product development activities are iterative, and include optimization of designs, testing the manufacturability and reliability of prototypes, and demonstrating required scalability and cost parameters.
We expect that the product development phase for the POET technology will comprise the majority of the coming 2017 calendar year, with initial commercial revenues for our photonic engines expected in calendar 2018.
So let’s now go through our addressable markets today. We are focused, as we mentioned, on photonic sensing and data communication. In the near term, our product revenues will be largely driven by photonic sensing. That is where we’re seeing demand, we’re investing, and we’re growing the customer base, and growing our revenue. We will build that revenue up with discrete and integrated lasing solutions in 2017 and thereafter we would be migrating towards the longer reach transceivers and the active optical cables, in that order.
So let’s spend a little bit of time on photonic sensing.
We have products in the market today, we’ve got the most broad portfolio of photonic sensing high-powered LEDs today, and we’re servicing that market across a variety of verticals:
Photonics Sensing:
1) Test & Measurement (TAM: $10B), which includes monitoring equipment for communication, components and material testing, as well as sensing equipment such as distributed temperature and strain measurement;
2) Structural Health Monitoring (TAM: $6 billion), which includes devices to monitor the power grid, and fiber optic-based sensors in rail lines, nuclear facilities, etc.;
3) Guidance and Navigation (TAM: $4.5 billion), which includes navigational guidance systems, gyro-compasses, and optical-based systems for navigating self-driving automobiles;
4) Medical and Health Care (TAM: $2.5 billion), which includes devices for non-invasive blood glucose monitoring, pulse-ox devices, and ophthalmic examination.
These are all high growth markets addressed by the current and expected new products from our DenseLight subsidiary.
We have a plan to expand our roadmap in this space over the next year to include short wavelength high-powered LEDs where some of the POET technology and POET IP will be brought to bear and we’re also expanding the reach of our broadband light sources so that spectroscopy and other applications can be more readily available at lower cost to more customers and more consumers.
and Data communications:
Discrete lasers and integrated lasing solutions. It is a big market today driven by fiber to home. Fiber to home is big in Asia today and is expected to be big in terms of growth in Europe and the United States as well. And data centers of course, as we’ve talked, about are growing at a tremendous push.
Through our DenseLight subsidiary, we provide discrete and integrated lasing and receiving solutions, for data centers as well as for Fiber To The Home or X (FTTX) applications. The FTTX market generally refers to the Passive Optical Networks, or PONs, that telecommunications service providers deploy. The most commonly deployed PON technology is Gigabit PON, or GPON, which delivers up to 2.5 gigabits per second (Gbps) of data, but due to the splitting of the bandwidth among multiple users, the actual bandwidth delivered to an individual subscriber is far less than 2.5 Gbps. One approach that does support true 1 Gbps service to the home is wavelength division multiplexing PON, or WDMPON, a technology that enables the transmission of multiple wavelengths of data over a single fiber optic strand.
DenseLight currently provides discrete devices for this application.
Both of those market segments are driving the need for indium phosphate-based lasing and receiving solutions. A big chunk of that market is discrete, that we participate in today, and we would expect to disrupt that market by bringing some of our IP, from an integration standpoint, into that market.
One of the points I want to note, in this particular slide on the right, you will see that discrete solutions make up a majority of the sales in terms of unit volume. However, if you look at the market size in terms of revenue, you will see that the integrated solutions drive most of the revenue. And this is an example of how you can aggregate value with integration. The more you can integrate solutions, the more value you can drive, the higher ASPs (average selling price) are for that particular part.
So our goal is to layer the revenue stream from photonic sensing with discrete and integrated indium phosphate lasing and receiving solutions as the next layer, if you will, of our revenue and our product portfolio.
And following behind our discrete and integrated lasing solution are solutions utilizing our POET integrated opto-electronic technology. We’ve talked about the technology currently being in the development phase and being readied for commercialization in 2018 with the first market being active optical cables. The market is continuously seeking to replace traditional copper-based links with optical interconnects at increasingly shorter transmission distances. The challenge has been cost and that’s what POET is going to drive to address with its integrated optical engine. We believe we can lower the power consumption dramatically over copper cables, it can be a smaller size, form factor and cost competitive with copper solutions, and it brings to bear some of the other advantages of optical cables such as weight, size, the ability to increase face blade density on servers, electromagnetic interference in links, etc. That is our path to driving revenue in the active optical cable segment, starting in 2018.
Our financial overview. Let’s talk about monetization of this technology. We’ve got multiple potential sources of revenue that we are working on. Of course immediately today we’ve got revenue from product sales. And product sales will continue to be a good source of revenue and a primary source of revenue for us in the coming years. That is, through sales of products using photonic sensing, through sales of products for lasing as well as transceiver chip sets for data communications and consumer applications.
We are working with customers and partnerships that can drive NRE revenue into the company over the next year(s). NRE revenue can take multiple forms. It can come in the form of offsets, it can come in the form of custom development programs, and it can come in the form of technology transfer licensing agreements. And we are working on all three of those today.
So finally I’d like to summarize with the following points. We have established product sales today in large and high-growth photonic market segments with our recent acquisitions. The revenue is expected to exceed $1.6 to 1.8 million in the second half of 2016, driven primarily by sales of sensing products. We expect 2017 revenue to grow year on year, again driven by component sales in both photonic sensing and lasing. Our DenseLight business unit is expected to reach positive operating cash flow in the second half of 2017.
The POET technology is poised to disrupt multiple adjacent markets. We are engaged with and anticipate high customer demand for our integrated photonic solutions. New solutions relieve current cost and power pain points in data communications in a way that only POET can address. This allows us to create and capture significant value through photonic integration, we walk our way up the value chain. The more components we integrate, the more value we keep, the more value we capture. We’ve got a very high capital efficiency model with a fully-equipped photonics manufacturing facility and we’ve got a source of sustained competitive differentiation with a broad portfolio of patents that protect us and provide a barrier to entry. In short, we’re positioned for strong revenue growth, market expansion and profitability. And with that I’d like to conclude and I thank you all for your kind attention.
Thank you.
Links:
POET’s Investor Presentation oct 2016
https://docs.google.com/document/d/1ePv7UQtM1...9Vdg/edit#
MD&A Sept 2016 (published 28 Nov.2016)
please see Sedar
http://www.sedar.com/DisplayCompanyDocuments....o=00003983
Sound:
https://www.youtube.com/watch?v=JhhjhHWSoi8
Cheers
[url=http://http://agoracom.com/ir/POETTechnologies/forums/discussion/topics/681246-poet-s-roadmap-2017/messages/2131046#message]Source[/url]
