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The optical network hardware market size is forecast to increase by USD 6.79 billion at a CAGR of 7.73% between 2023 and 2028. The market is experiencing significant growth due to the increasing demand for digital content consumption and the resulting bandwidth requirements. With the emergence of new age technologies such as 5G wireless networks, edge computing, and packet-based networks, the need for high-capacity, secure, and efficient optical network solutions is escalating. Network security breaches have become a major concern, necessitating the deployment of advanced optical network hardware to safeguard data transmission. Key components of optical networks, including optical transceivers, multiplexers, and amplifiers, are in high demand for long-haul networks, fibre optic networks, data centres, enterprise communication, financial services, healthcare, and smart cities. The limited spectral efficiency in optical fiber networks is driving innovation in the development of new technologies to enhance network capacity and reduce costs. Overall, the market is poised for vigorous growth in the coming years, offering substantial business opportunities for market participants.
The market is experiencing significant growth due to the increasing demand for high bandwidth services in communication technology. Optical networks, which utilize light signals transmitted through fiber optical cables, have become the backbone of modern communication systems. The use of LEDs and lasers as light sources, optical amplifiers for signal boosting, and wavelength-division multiplexing for data transmission have made optical networks the preferred choice for reliable data transmission. The cloud, colocation operators, data centers, and virtual devices are major consumers of optical network infrastructure. The proliferation of mobile devices, Wi-Fi, IoT technology, high-speed data transmission, and data-intensive applications such as 5G and cloud computing have fueled the demand for optical network hardware. Fiber optic cables and optical fibers play a crucial role in delivering high bandwidth capabilities with low latency, making them essential components of optical network infrastructure. Fibre optic communication continues to evolve, offering solutions for fiber optic cables with enhanced bandwidth and improved signal quality.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD million" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The broadband infrastructure segment is estimated to witness significant growth during the forecast period. The market is witnessing significant growth due to the increasing demand for high-speed data transmission in various sectors. The broadband infrastructure segment is expected to lead this market, driven by the proliferation of connected devices and mobile services. Fiber-to-the-home (FTTH) deployments in enterprises and residential areas are fueling the need for advanced optical network hardware. Furthermore, the adoption of virtualized offerings in telehealth, virtual healthcare, streaming content, and video conferences is increasing the demand for reliable and high-capacity optical transport networks. In rural communities, the use of spectrum ranges for broadband connectivity is also driving the market growth. The implementation of fiber management systems and the deployment of wavelength-division multiplexing (WDM) technology for full duplex transmission require skilled personnel such as hardware engineers. These factors collectively indicate a promising future for the market during the forecast period.
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The broadband infrastructure segment accounted for USD 10.05 billion in 2018 and showed a gradual increase during the forecast period.
North America is estimated to contribute 35% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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The market is experiencing notable growth due to the increasing demand for high-speed connectivity from both residential and business sectors. In North America, the communications industry is thriving, driven by the use of the Internet for various applications such as online gaming, social media, video conferencing, and e-commerce. The finance, media, and automation industries also rely heavily on bandwidth for their operations. With the emergence of the Internet of Things (IoT), the need for seamless data transmission is becoming increasingly important. Virtualized offerings, including mobile services and connected devices, are also driving the demand for optical network hardware. Fiber-to-the-home (FTTH) and broadband infrastructure are key areas of investment, particularly in rural communities where spectrum ranges are limited. Fiber management and skilled personnel, including hardware engineers, are essential for the deployment and maintenance of optical networks, which utilize technologies such as wavelength-division multiplexing (WDM) and full duplex transmission. These factors are expected to fuel the adoption of optical network hardware during the forecast period.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Growing mobile data traffic is the key driver of the market. The market is experiencing significant growth due to the increasing demand for high bandwidth services in communication technology. This trend is driven by the tide in mobile data traffic, fueled by the widespread use of smartphones, the proliferation of mobile applications, and the expansion of mobile internet services. To accommodate this escalating requirement for high-speed, reliable, and scalable connectivity, there is a growing need for advanced optical networking solutions, including LEDs, lasers, optical amplifiers, and high-speed switches. Fiber optical cables play a crucial role in this infrastructure, enabling the transmission of vast amounts of data at high speeds. The cloud, colocation operators, data centers, and high-speed servers all rely on this physical infrastructure to provide high-bandwidth internet services.
Emerging new age technologies and their requirements scaling business opportunities for optical network hardware market is the upcoming trend in the market. The market is experiencing significant growth due to the increasing demand for high bandwidth services in communication technology. This trend is driven by the expanding data volumes generated by data-centric applications and the proliferation of the Internet of Things (IoT). The IoT's success hinges on the quality and speed of the services it offers to users. To deliver optimal performance, the IoT requires high-speed connectivity, which can only be achieved through the use of fiber networks. Optical network hardware, including LEDs, lasers, optical amplifiers, fiber optical cables, high-speed switches, and packet switches, plays a crucial role in enabling high-speed connectivity.
Further, cloud and colocation operators are major consumers of optical network hardware, as they require physical infrastructure to support high-speed data transfer and the deployment of servers for hosting high-bandwidth internet services.
Limited spectral efficiency in optical fiber network is a key challenge affecting the market growth. The market has experienced notable growth due to the increasing demand for high bandwidth services in various sectors, including telecommunications, data centers, and cloud computing. Optical communication technology relies on the use of LEDs, lasers, optical amplifiers, and fiber optical cables to facilitate data transmission. However, the limited spectral efficiency in optical fiber networks has posed a significant challenge for industry players, hindering their ability to maximize data transmission capacity and meet the escalating demands for high-speed connectivity. This issue has been particularly impactful in critical sectors such as long-haul telecommunications, where the effective utilization of available network resources is essential.
To address this bottleneck, the development and adoption of coherent optical communication technologies have emerged as a pivotal response. Coherent systems utilize sophisticated modulation formats and advanced signal processing techniques to enable the simultaneous transmission and reception of multiple signals over a single optical fiber, substantially enhancing spectral efficiency. This technological advancement has been instrumental in supporting high-speed switches, servers, packet switches, and fiber optic cables required for high-bandwidth internet and colocation operators. As data centers continue to expand and the cloud continues to drive digital transformation, the demand for high-speed connectivity and efficient optical network hardware is expected to remain strong.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
ADVA Optical Networking SE - The company focuses on developing hardware and software for open networking technology such as optical networking, synchronization, and carrier ethernet and virtualization. The key offerings of the company include optical network hardware.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market is witnessing significant growth due to the increasing demand for high bandwidth services, driven by the proliferation of communication technology. Optical fibers, such as fiber optical cables, play a crucial role in this growth, enabling reliable data transmission with high-speed, low latency, and high-performance connectivity. The market is witnessing the adoption of advanced technologies like wavelength-division multiplexing (WDM), full duplex transmission, and OEO conversion, enabling the transmission of multiple wavelengths and high data rates, up to 100 Gbps. The market is also driven by the increasing penetration of smartphones, computers, and other connected devices, leading to the growth of mobile services and the Internet of Things (IoT) technology. The demand for high-speed internet, video streaming, video conferences, telehealth, and virtual healthcare is driving the growth of broadband infrastructure, including fiber-to-the-home (FTTH) and fiber-to-the-premise (FTTP).
Further, the market is also witnessing the adoption of cloud, colocation operators, and data centers, requiring physical infrastructure, high-speed switches, servers, and virtualized offerings. The market is expected to grow further with the deployment of 5G wireless networks, smart cities, and government infrastructure projects, requiring high-speed, reliable data transmission and automation for network control and virtualizing network services. The market is also witnessing the adoption of software control and security solutions to address network security breaches and ensure data privacy and integrity. The market is expected to grow further with the increasing demand for big data analytics, real-time data collection, and monitoring, and the need for high-speed, reliable data transmission for data-intensive applications in industries like financial services, healthcare, and enterprise communication.
Market Scope |
|
Report Coverage |
Details |
Page number |
178 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 7.73% |
Market growth 2024-2028 |
USD 6.79 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
7.02 |
Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
Performing market contribution |
North America at 35% |
Key countries |
US, China, Germany, India, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Adtran Holdings Inc., ADVA Optical Networking SE, ALE International, Ciena Corp., Cisco Systems Inc., E.C.I. NETWORKS INC., Ekinops SA, FiberHome Telecommunication Technologies Co. Ltd., Fujitsu Ltd., Huawei Technologies Co. Ltd., II VI Inc., Infinera Corp., Juniper Networks Inc., NEC Corp., Nokia Corp., Padtec Holding S.A., TE Connectivity Ltd., Tejas Network Ltd., Telefonaktiebolaget LM Ericsson, and ZTE Corp. |
Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Application
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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