Enjoy complimentary customisation on priority with our Enterprise License!
The optical network hardware market is estimated to grow at a CAGR of 7.43% between 2022 and 2027. The size of the market is forecast to increase by USD 6,074.53 million. The growth of the market depends on several factors, including growing mobile data traffic, high demand for data centers, and the development of 5G network.
This report extensively covers market segmentation by type (broadband infrastructure, fiber optic network, data center, and smart cities), application (WDM and SONET/SDH), and geography (North America, APAC, Europe, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
To learn more about this report, Download Report Sample
The high demand for data centers is notably driving the optical network equipment market growth, although factors such as the lack of OTN standards may impede the market growth. Our researchers analyzed the data with 2022 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.
The high demand for data centers is notably driving the optical network equipment market growth. Optical networking is the core of storage area networking and business connectivity solutions. Traditionally, data centers made use of network resources and technology made available to them. However, a rise in investments in data centers is pushing the demand for new optical modules to meet the demand for high bandwidth, low power, and wider reach. Modern data centers now transfer data at the rate of 10GB or higher. Maintaining such rates of data transfer is increasingly becoming a challenge for copper wire-based electrical interconnects. They now need the latest fiber channel speed steps with high duplex throughput to accommodate the growing requirement of data management.
Analytics applications used for big data analytics and other complex cloud-based applications require high-speed internet connectivity. Data centers owned by Amazon, Google, Facebook, and Microsoft are equipped with energy-efficient and high-performance storage infrastructure. Fiber-optic network hardware is a crucial element of these data centers. This will drive the global market during the forecast period.
The emerging new-age technologies and their requirements for scaling business opportunities for the market are emerging trends. The sensor network and growing penetration of the IoT are expected to have a positive impact on the growth of the global market. The success of emerging technologies such as the IoT is dependent on the scope of services that the technology provides to the users. To ensure the delivery of optimum service, the IoT needs to have high-speed connectivity, which is possible only with the use of a fiber network. Therefore, a fiber network plays a crucial role in the IoT.
The IoT will make extensive use of optical network hardware, as optical networks form the very foundation of enhanced data sharing and high-speed connection. The technology will boost optical network hardware revenues by stimulating demand for optical fiber connections for high-speed internet. Optical network hardware can also enable cost-effective scaling options for internet infrastructure to accommodate growing network traffic. Hence, such factors are expected to positively impact the growth of the global market during the forecast period.
The lack of OTN standards is a major challenge impeding market growth. In the initial stages of technology implementation, key features such as mapping of client signals, performance monitoring, fault detection, and isolation were missing. Market vendors used their methods for mapping client traffic, performance monitoring, and fault detection or isolation. Single carrier networks using equipment from a single vendor did not face any issues of standardization. However, the growth, expansion, and interconnection across networks gave rise to issues related to standardization.
The lack of set standards made WDM more of a liability. The lack of a common mapping structure forced carriers to de-multiplex client traffic into the lowest form at the carrier boundaries. Furthermore, the non-availability of standard fault detection and alarm indication meant that faults could not be communicated to other portions of the network or over carrier boundaries. This created a gap, with consumers complaining about poor signals and the carriers having no knowledge about the fault. These concerns are extremely problematic for the functioning of a network and the selling of mission-critical services. Hence, such factors will hamper the market's growth during the forecast period.
The 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 growth strategies.
Global Optical Network Hardware Market Customer Landscape
Vendors 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 report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
Technavio categorizes the global optical network hardware market as a part of the global technology hardware, storage, and peripherals market within the overall global information technology market. The parent global technology hardware, storage, and peripherals market covers manufacturers of cellular phones, personal computers, servers, electronic computer components, and peripherals. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
The market share growth by the broadband infrastructure segment will be significant during the forecast period. The increasing penetration rate of the internet and smartphones has accelerated the trend.
Get a glance at the market contribution of various segments Request a PDF Sample
The broadband infrastructure segment was valued at USD 7,216.53 million in 2017 and continued to grow until 2021. Using fibre-to-the-premises by enterprises and residential neighbourhoods is driving the growth of this segment. Moreover, the use of bandwidth in finance, media, and automation has significantly enhanced. The advent of the IoT will further propel the demand for seamless data transmission, which requires high bandwidth. All these factors are expected to enhance the adoption and need for optical transport networks, which will create the demand for broadband infrastructure during the forecast period.
For more insights on the market share of various regions Request PDF Sample now!
North America is estimated to contribute 36% 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.
North America accounts for the largest share of the global market. The region has been witnessing a significant surge in demand for fiber-optic connections from residential as well as business customers. The communications industry is booming because of the use of the internet for purposes such as online gaming, social media, video chatting, and online shopping. This has created a high requirement for bandwidth from the metros and urban cities. The use of bandwidth in finance, media, and automation has significantly enhanced. Furthermore, the advent of the IoT will also propel the demand for seamless data transmission, which requires high bandwidth. All these factors are expected to enhance the adoption and need for optical transport networks, which will create the demand for optical network equipment during the forecast period.
Many cloud services providers, such as Amazon Web Services (AWS), Microsoft, and Google, are based out of the US. They have a strong presence in the US and have multiple data centers in different states. The increasing demand for cloud services is one of the factors that drive the growth of the market in the region. The demand for cloud services is increasing due to their benefits, such as the ability to scale resources as per the needs of a customer. Cloud services also reduce the need for organizations to employ multiple IT specialists as they do not have to manage their own infrastructure. Public cloud service providers can manage multiple tenants in a single data center. However, managing multiple connections from different tenants requires high bandwidth for cloud data center operations. As a result, cloud service providers are looking to implement high-bandwidth networking solutions in their data centers. Furthermore, organizations are looking to use multi-cloud solutions to avoid vendor lock-in and to keep the overall cloud costs in check. Hence, such factors are expected to drive the market's growth in the region during the forecast period.
Although the regional market was negatively affected by the disruption of commercial activities due to the COVID-19 outbreak in 2020, the cloud-based segment growth contributed to the growth of the regional market in 2020-2021 due to its remote access capabilities. Increased smartphone and internet penetrations encouraged the adoption of remote working solutions among individuals in 2020-2021. The market in North America grew during 2020-2021 owing to the continued social distancing norms and widely accepted remote working solutions. Nevertheless, in 2021, given a gradual decline in COVID-19 cases, organizations slowly picked up their pace. The advent of new technologies and innovations in cloud and IoT, along with the growing popularity of digital transformation, raised the importance of cybersecurity. Such factors are expected to increase the need for optical network hardware and help the market record a high growth rate during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
|
Optical Network Hardware Market Scope |
|
|
Report Coverage |
Details |
|
Page number |
168 |
|
Base year |
2022 |
|
Historic period |
2017-2021 |
|
Forecast period |
2023-2027 |
|
Growth momentum & CAGR |
Accelerate at a CAGR of 7.43% |
|
Market growth 2023-2027 |
USD 6,074.53 million |
|
Market structure |
Fragmented |
|
YoY growth 2022-2023(%) |
6.73 |
|
Regional analysis |
North America, APAC, Europe, Middle East and Africa, and South America |
|
Performing market contribution |
North America at 36% |
|
Key countries |
US, China, India, Germany, and UK |
|
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
|
Key companies profiled |
Adtran 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, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
|
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
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 Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
Certified ISO 9001 : 2015
We are ISO 9001:2015 recognized that ensures quality services and product delivery to our clients.
We are GDPR and CCPA compliant! Your transaction & personal information is protected from unauthorized use.
Get lifetime access to our
Technavio Insights
Get the report (PDF) sent to your email within minutes.
