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XFP Prices Plummet

Prices are falling rapidly on XFP modules for 10-Gbit/s Ethernet interfaces, to the point where XFP could get cheaper than Xenpak -- a slightly older interface -- by the end of the year.

XFP was expected to end up cheaper than Xenpak, but not this early. The trend is particularly surprising, given that Xenpak started out cheaper and has more than a year's headstart in terms of shipments.

The price shift could accelerate the already rapid descent of 10-Gbit/s Ethernet equipment prices. At least one company is taking advantage right away; Foundry Networks Inc. (Nasdaq: FDRY) chose XFP rather than Xenpak for the recently announced X series of routers, citing price as the reason (see 10-GigE Price Drops Continue).

"You'll probably see the XFP [prices] drop faster than the Xenpak," says Bob Schiff, director of marketing for Foundry's enterprise unit. "It's just a lower-cost design, and [XFP] will be the ones shipping in volume in 2005 and 2006."

Force10 Networks Inc. has seen the changes, too. The company isn't shipping XFP interfaces yet, but it's been shopping.

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