Support from the majors
This new generation of vendors is partially dependent on ZTE and Huawei at this point for their growth, as many of them supply to the Chinese big two - and to foreign vendors such as Alcatel-Lucent on an ODM basis.
This is the model being pursued by Cambridge Industries Group (CIG), founded in 2005 by Gerald Wong, a graduate of the Massachusetts Institute of Technology (MIT) who worked at Alcatel-Lucent before returning to China to start his own company.
CIG is a significant supplier of GPON ONTs, and Kunstler says the company is leading the charge to bring BOSAs (bodirectional optical subassemblies) on board for PON equipment, an advance that delivers savings of around 40% when compared with traditional optical module-based designs.
Rose Hu, CIG's marketing director, says the company is focused squarely on the PON CPE market. "In this market we sell ODM and deal with tier-one and tier-two companies," says Hu.
"Huawei are also a small portion of our business, and our products are available in the US via equipment vendors and we have recently opened an office there."
CIG is a private company and employs about 1,100 people, including 1,000 workers at a factory in Shanghai. It recently announced a doubling of its production capacity.
Hu declines to be specific about the company's financial performance, but says that in the two years from 2009 CIG's revenues jumped more than 400%.
Wong reported in October 2010 that CIG's revenues had grown at a CAGR of more than 125% from 2008 to 2010.
Hu says the domestic Chinese market accounts for 30% of CIG's business, with 70% going offshore. International markets, she says are a major focus.
"We have a very international face," says Hu. "The investors and many of the people working here are both Chinese and hold international passports and have lived and studied overseas. To look internationally is very natural for us."