The global optical communication and networking equipment market was
valued at USD 18.9 billion in 2020 and is projected to reach USD 27.8
billion by 2025; it is growing at a CAGR of 8.0% from 2020 to 2025.
Rising
adoption of cloud-based services and virtualization services all over
the world, increasing data traffic due to increased internet usage, and
growing number of data centers are the factors driving the optical
communication and networking equipment industry growth. However, the
high initial investment and increased network complexity are the key
factors restraining market growth. The deployment of VOIP, LTE, and 5G
networks; the extension of networks in developing countries; and the
adoption of IoT are among a few factors that would create opportunities
for the players in the optical communication and networking equipment
market. However, the vulnerability of optical networks to hacking and
susceptibility of optical fibers to physical damage and transmission
losses are the major challenges for this market.
Download PDF Brochure:
The
market for fiber channel technology-based optical communication and
networking equipment is expected to grow at the highest CAGR during the
forecast period. In enterprise data centers, high-speed fiber channel
networking technology is used extensively to transport data from storage
systems. It ensures that all storage data arrives at its network
destination without loss at extreme throughput and low latency while
operating at high utilization rates without data collisions or the need
for retransmission.
In
the optical communication and networking equipment market, data center
applications accounted for the largest share in 2019. This market is
expected to grow at the highest CAGR from 2020 to 2025. The growth of
this market can be attributed to the increasing adoption of cloud
computing and the growing use of smartphones and other connected
devices.
Optical
switches accounted for the largest share of the optical communication
and networking equipment market in 2019. This market is expected to grow
at a CAGR from 2020 to 2025. Optical switches are the key component of
fiber-optic transmission systems that usually send information over
fiber by turning electronic signals into light. Optical switches are
faster, more efficient, and more scalable. Also, they provide high
flexibility in installation, replacement, maintenance, and
reconfiguration of network hardware and paths, resulting in extremely
high reliability and availability, as well as a reduction in OPEX.
Therefore, optical switches are expected to continue to account for the
largest market share in the next 2 to 3 years.
The
optical communication and networking equipment market in the APAC
region accounted for the second-largest market share in 2019. The market
in APAC is also expected to grow at the highest CAGR from 2020 to 2025.
The primary reason behind this trend is the extension of networks in
China, South Korea, India, and other developing countries in APAC.
Moreover, the APAC region is the largest producer and the consumer of
smartphones, laptops, TVs, and various other applications across the
world. Thus, the demand for the internet is growing tremendously in the
region. This trend is expected to continue during the forecast period.
