ALHAMBRA, Calif. -- When Ortel Corp. took a brand-new line of 980-nm pump lasers off the market early last year -- writing off $4.6 million in operating losses -- things looked grim.
"It was something that no company likes to do. We were behind the eight ball," acknowledged spokesman Brian Bardwell. "Management decided it was not going to be profitable to remain in that business."
Ortel didn't have the marketing, packaging and distribution strength to exploit the 980-nm pump laser market.
Only one year later, however, Ortel is glowing after signing a multimillion-dollar agreement with Lucent Technologies Inc. of Murray Hill, N.J., for next-generation uncooled 980-nm pump laser modules used in erbium-doped fiber amplifier modules for metropolitan optical networks.
Bardwell said that Ortel, known primarily as a supplier of laser transmitters and receivers to cable television markets, is refocusing its energy on telecommunications opportunities. Its telecom products made up an estimated 10 percent of total sales of $72 million in 1999, notably to Motorola Inc. of Schaumburg, Ill., and Antec Corp. of Duluth, Ga., compared with almost nothing a year ago. Telecom sales are expected to jump to about 45 percent in 2001.
"They feel they are sitting in the sweet spot of the convergence of cable and teleco," Colin Higgins, an analyst with Hoefer & Arnett Inc. in San Francisco, said of Ortel. "They can go either way."
Although Lucent wouldn't comment, analyst Brett Miller with St. Louis-based A.G. Edwards & Sons said "it's a feather in their cap that Lucent saw them credible enough" for the deal. "Ortel has a great history of manufacturing and great technology ... but a history of being late to market."
He said the company did not have the expertise to market the 980-nm pump laser during its first attempt, but with the technology already developed, it wins big as a laser chip supplier to telecommunications giant Lucent.
"Management has reinvented this company. ... They were a bunch of technologists before," Miller said.