Silver linings

A slew of negative news fills Optical Insight this week. Domestic sales of transport gear are down. Ciena and Sycamore are both struggling. Nortel is laying off thousands of employees. Before that, Riverstone was pushing back its break-even point. In the race toward recovery, we might have hoped such negative reports would be fewer and farther between by this point.

Then again, maybe it's not so bad. In truth, the news of domestic transport revenues sinking in the second quarter is not entirely negative. It may be more of a correction to larger than normal sales in the first quarter. In fact, earlier this month, researchers at Dell'Oro Group increased their forecast for transport equipment growth by about 6%, citing metro applications as a primary driver in boosting the sector to $7.8 billion by 2008.

Layoffs are always disheartening, despite the more palliative effects they have on a company's financial health. And Nortel employees in particular have seen more than their share of pink slips. With the latest round, maybe the bulk of Nortel employees can enjoy some sense of relief knowing that cuts will be heavily weighted toward management--and that the company has vowed to reclaim bonuses paid to executives on false pretenses.

Riverstone is an odd mix of hope and grief. There's not much to envy in the company's financial situation, but most vendors would kill to have some of the big network contracts it has landed.

And as for Ciena, well...what do you think? Any ideas on the identity of the West Coast start-up Ciena just invested in? E-mail me at egubbins@primediabusiness.com.