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Global Optical Network Hardware Market, By Equipment (WDM, SONET/SDH), By Application (Datacenter, Smart Cities, Broadband Infrastructure, Fiber Optic Network) - Forecast 2030

ID: MRFR/ICT/4000-CR | 85 Pages | Author: Shubham Munde| February 2018

Market Overview:

Global Optical Network Hardware Market size is poised to expand at 4.62% CAGR over the forecast period (2020-2030), according to Market Research Future (MRFR) in its latest report. It can reach a size of USD 8.21 Billion by 2030. Optical networking is a communication technology that transmits information through light. The hardware used in the technology are LEDs, lasers, and optical amplifiers. Increasing demand for high bandwidth services and the reliance of fiber optical cables can propel the potential for the global optical network hardware market. Increased spending by cloud and colocation operators on packet switches and fiber optic cables are likely to widen the potential of the optical communication and networking equipment market.

COVID-19 Analysis:

The COVID-19 pandemic has disrupted the operations of the global optical network hardware. The effects of the pandemic and lockdown restrictions enforced by governments have dampened the demand for hardware. Home schooling and online education requires seamless connectivity for ensuring the education of children and adults and can act as a viable market proponent. Low tolerance for latency can bode well for the market. Furthermore, rise of online shopping during the pandemic has seen a surge with ecommerce platforms requiring good speeds for keeping customers engaged. The demand for constant end-to-end latency combined with maintaining interaction with users can drive the need for optimal network hardware.

Rise of virtualization and cloud computing are likely to threaten the market demand for 2020. But upgrades to network architecture, spending on WDM equipment, and need for bandwidth for broadband services and IP video can provide relief to the optical communication market.

Optical Communication and Networking Equipment Market Dynamics:

  • Drivers:

Growing Demand for Fiber Optic from Data Centers:

The use of high bandwidth internet and rising use of cloud are likely to drive the demand for fiber optic cables, which in turn can bolster the demand in the global optical network hardware market. Data centers require reliable components to cater to the demanding requirements of cloud and preserving the physical infrastructure of the network. Aggregation of high-speed switches for supporting large servers can bode well for the market. The transformation of applications from hardware driven entities to virtualized offerings within cloud data centers can be opportune for the market. Proliferation of mobile services, dependence of connected devices, and dependence on 3G and 4G services can drive the market demand over the forecast period.

  • Opportunities:

Increased FTTH Broadband Internet Penetration:

Fiber-to-the-home (FTTH) is pivotal for providing internet services to millions of homes. According to the Fiber Broadband Association (FBA) in the U.S., it has connected more than 46.2 million homes in the U.S. Establishment of broadband infrastructure for providing citizens sheltering from the pandemic a medium for earning from online sources can drive the demand for optical network hardware. Telehealth is likely to drive the highest demand as citizens increasing look at online consultations. Rise of virtual healthcare can positively impact the market. The use of internet for streaming content and attending video conferences are new opportunities for the market. Government policies are being rolled out for connecting rural communities through the Rural Digital Opportunity Fund as well as new spectrum ranges being offered for bidding.

  • Restraints:

Lack of Infrastructure in Developing and Under-developed Countries:

The lack of established infrastructure in developing and under-developed countries can impinge the global optical network hardware market from expansion. Regulations and fluctuating government policies can restrain the market demand.

  • Challenges:

Effective Fiber Management:

The need for effective fiber management for taking advantage of available ports and ensuring the uptime of data centers can pose a challenge to the market. The need of skilled personnel for maintaining constant use of data services without compromising on speed can lead to huge demand for hardware engineers.

Segment Analysis:

By Equipment:

WDM to Gain the Lead:

Wavelength-division multiplexing (WDM) is estimated to expand at 15% CAGR over the assessment period. It had generated revenue of USD 10 billion in 2017. WDM can carry multiple wavelengths in a single fiber cable. It can provide full duplex transmission and high security to enterprises. Multiplexing allows the hardware to multiply the number of optical fiber carrier signals. The use of 100 Gbps data rate is likely to attract new customers and boost the segment demand over the forecast period.

By Application:

Broadband Infrastructure to be Leading Application:

The broadband infrastructure application is expected to generate massive revenue for the global optical network hardware market. The growing penetration rate of smartphones and internet can facilitate the trend. The use of fiber-to-the-premises (FTTP) by residential neighborhoods and enterprises can drive the segment demand at 14% CAGR over the forecast period.

Regional Analysis:

North America to Dominate Global Market:

North America is estimated to dominate the global optical network hardware market. It had generated USD 8 billion in 2017. It can exhibit a 13% CAGR over the forecast period owing to the reliance of customers on fiber networks for conducting daily tasks. The rise of work-from-home and utilization of unified communication applications can trigger the demand for fiber supported broadband networks. The need for seamless connectivity for online learning, streaming of content, and telehealth can bolster the optical network hardware market demand over the forecast period.

APAC to Generate Significant Revenue:

APAC is expected to be a major hub for consumer electronic products, healthcare, automotive, and other verticals. This provides the market huge potential for expanding its offerings to increase its customer base. The region is expected to exhibit 16% CAGR over the assessment period. Investments in connectivity solutions and upgrade from 3G to 4G and 5G networking technologies can be lucrative for market players. Adoption of smartphones, demand for connectivity, focus on network quality, and rise of video streaming can facilitate market growth. Large population, funding in R&D, and emergence of big data and cloud computing companies are other factors that can further the ambitions of the global optical network hardware market.

Competitive Landscape:

The global optical network hardware market is marked by continuous developments of optical network hardware. Acquisitions, partnerships, mergers, collaborations, and expansions are likely to be witnessed among companies looking to gain the edge in the market.

Key Companies Covered in the Network Hardware Report:

ZTE Corporation (China), Infinera (U.S.), Alcatel-Lucent (France), ADVA Optical Networking (Germany), Cisco Systems (U.S.), Ciena Corporation (U.S.), Huawei Technologies (China), ADTRAN (U.S.), and Ericsson (Sweden) are prominent players of the global optical network hardware market.

Recent Developments:

  • Cisco Systems has agreed to acquire Acacia Software in 2021. The deal could be fruitful for the former company in building resilient networks in light of high bandwidth rates required by clients.

  • Iniphi has collaborated with Cisco Systems for developing co-packaged optics for the next-generation of switches. This can be employed in Internet of things applications for extending the battery life and achieving higher data transfer rates. Employment of power over fiber (PoF) schemes for powering electricity grids remotely and improving electrical networks.

Report Scope:

The global optical network hardware market report compiled by MRFR illustrates the trajectory of segments and sub-segments as well as supporting factor driving their growth. The report contains a comprehensive summary and explores all opportunities, trends, and threats to be faced by industry leaders in the coming years. It is segmented in the following manner:

By Equipment:

  • WDM


By Application:

  • Smart Cities

  • Datacenter

  • Fiber Optic Network

  • Broadband Infrastructure

Report Attribute/Metric Details
  Market Size   USD 8.21 Billion
  CAGR   4.62%
  Base Year   2019
  Forecast Period   2020-2030
  Historical Data   2018
  Forecast Units   Value (USD Billion)
  Report Coverage   Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
  Segments Covered   By Equipment, Application
  Geographies Covered   North America, Europe, Asia-Pacific
  Key Vendors   Oracle Corporation (US) Mitel Networks Corporation (Canada) Tieto (Finland) NetNumber Inc. (Netherlands) Ribbon Communications (US) Ericsson AB (Sweden) Dialogic Corporation (US) Huawei Technologies Co. Ltd (China) TNS Inc. (US) PCCW Global (Hong Kong)
  Key Market Opportunities   Increased FTTH Broadband Internet Penetration
  Key Market Drivers   Growing Demand for Fiber Optic from Data Centers

Frequently Asked Questions (FAQ) :

The global optical network hardware market is expected to record a substantial market valuation of USD 8.21 Billion by 2030.

The global optical network hardware market is projected to register a moderate 4.62% CAGR in the forecast period.

Technological advancements, rapid urbanization are increasing the adoption of cloud services, and rising IoT applications.

The lack of infrastructure is likely to hamper the growth of the public safety LTE market over the review period.

The wavelength-division multiplexing segment is slated to expand as the fastest-growing segment.

The broadband infrastructure segment is slated to expand as the fastest-growing segment.

A few major market players operating in the global optical network hardware market are Cisco systems, Huawei Technologies, Alcatel Lucent, Ciena Corporation, Infinera, among others.

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