CIR believes that the arrival of the Thunderbolt 3 standard is the beginning of mass market consumer optical networking. Prior to Thunderbolt 3, consumer optical networking was a niche only, consisting of optical extenders for HDMI and similar video interfaces. These extenders have found a small market in high-end home theater applications but are mostly used in sports bars and professional video studios; not consumer markets. Fiber optic cables sold to audiophiles for a while but this market is now defunct. In CIR’s opinion Thunderbolt 3 changes everything for two reasons. The Thunderbolt 3 standard will become ubiquitous and create a large addressable market for optical versions of Thunderbolt 3. Secondly, copper Thunderbolt cables have inherent distance limitations for which means that optical implementations will penetrate that addressable market both quickly and deeply. Recent estimates in CIR’s report, “Markets for Active Optical Cables: 2017-2026,” suggest that optical Thunderbolt cables will generate $620 million in revenues by 2022. However, that number is highly dependent of how quickly Thunderbolt 3 cable is commoditized.

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CIR Market Brief
Thunderbolt 3: A Beginning for Mass Market Optical Networking
Lawrence Gasman
President, CIR
CIR believes that the arrival of the Thunderbolt 3 standard is the beginning of mass market
consumer optical networking. Prior to Thunderbolt 3, consumer optical networking was a
niche only, consisting of optical extenders for HDMI and similar video interfaces. These
extenders have found a small market in high-end home theater applications but are mostly
used in sports bars and professional video studios; not consumer markets. Fiber optic cables
sold to audiophiles for a while but this market is now defunct.
In CIR’s opinion Thunderbolt 3 changes everything for two reasons. The Thunderbolt 3
standard will become ubiquitous and create a large addressable market for optical versions of
Thunderbolt 3. Secondly, copper Thunderbolt cables have inherent distance limitations for
which means that optical implementations will penetrate that addressable market both quickly
and deeply.
Recent estimates in CIR’s report, “Markets for Active Optical Cables: 2017-2026,” suggest that
optical Thunderbolt cables will generate $620 million in revenues by 2022. However, that
number is highly dependent of how quickly Thunderbolt 3 cable is commoditized.
Consumer Networking Hits 40 Gbps
A tacit assumption of data communications since the earliest days was that business datacom
led consumer-oriented networking in data networking speeds. When 10 Gbps was the way to
go in data centers, Gigabit Ethernet was all the rage for personal computing. We think that
Thunderbolt 3 will end such disparities. Thunderbolt 3 operates at a top speed of 40 Gbps,
which just happens to be data rate that medium sized data centers are using for their interlinks.
From a data rate perspective, therefore, business and consumer datacom are now on a par.
And don’t be too surprised if three years or so from now Thunderbolt 4 at 80 Gbps has
emerged.
At 40 Gbps rates distance limitations for copper cabling are already critical to market
acceptance. Copper cabling has had a remarkable run and it is still part of the 100 Gigabit
Ethernet standards. But as data rates increase so don’t the distance limitations of copper
cabling. With (copper) Thunderbolt 3 and its earlier versions, standard data rates can only be
maintained error free up to three meters which means that – using standard copper
implementations of Thunderbolt – networking over three meters can lead to unacceptable bit
error rates (BERs) and/or low-quality video.
Three meters isn’t very far. If the extent of a network is a desktop, three meters is fine. But
while in the past copper could serve almost all consumer networking applications, this is simply
not the case with Thunderbolt 3. Consider a home office or home theater network. If a cable
needs to wind its way around a sofa or some other obstacle, or even into the next room, three
meters of cable isn’t enough and copper (even active copper) Thunderbolt cable won’t do. But
current optical versions of Thunderbolt cable extend the distance limit to 60 meters. The

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CIR Market Brief
mindshare leader in the optical Thunderbolt cable space is Corning, but there are other (mostly
Chinese) firms supplying these too.
The mismatch between the many potential applications of Thunderbolt 3 and the inherent
limitations of implementing Thunderbolt 3 over copper cable is the big story here. But CIR
believes that there are also other drivers for optical Thunderbolt. We note that while fiber
optics is often characterized as more expensive than copper, the reality today is that this is
more matter of relatively small numbers of fiber optics links that are produced, not inherent
cost factors. Thunderbolt 3 could prove to be the first mass market optical interface and at
prices that easily match copper. [As an aside, does this speak to a revival of interest in fiber-
in-the-home?]
Thunderbolt: Beyond Apple
In the past the Thunderbolt reality has been an Intel-Apple one. Thunderbolt was born at
Intel at the end of the last decade, but despite Intel’s early high hopes, the only big
computer/consumer electronics firm to have implemented Thunderbolt is Apple.
Thunderbolt 1 and Thunderbolt 2 did not see much love at the Windows/PC companies.
But this has changed with the advent of Thunderbolt 3. Acer, Asus, Dell, HP, and Lenovo
began to show real interested in Thunderbolt in 2015 and all have high-profile Thunderbolt
3 capable laptop models on the market today. Meanwhile, Apple has gradually
strategically positioned Thunderbolt to be its key interface. In some Apple products, the
Thunderbolt port is the only port.
An explanation of why this sea change has occurred lies well beyond the scope of this
article, but we note support of the USB Type-C connector and USB 3.1 certainly helped.
DisplayPort 1.2 and HDMI 2.0 are also directly supported by Thunderbolt 3 and the latest
Thunderbolt 3 hardware reportedly provides enough speed to deliver video to two 4K
displays at a 60 frame per second refresh rate or to a single 4K display at 120 frames per
second. Optical cables for the Thunderbolt environment are thin, durable and flexible. No
damage is done to these cable if user pinch the cable into a 180-degree “U turn” or even
tie them into a knot. Neither of these actions is recommended, however.
As a result of all this, some insiders have started to call Thunderbolt 3, “One cable to rule
them all,” thus establishing that the kind of ubiquity potentially offered by Thunderbolt 3
comes in the form of both (1) support of all the important personal computing/consumer
electronics networking standards; and (2) the multivendor ubiquity represented by all
those Thunderbolt sign ups by PC OEMs
The bottom line therefore is that Thunderbolt 3 portends to be a new direction for
consumer datacom that will be everywhere and will need fiber optics to make it happen.