Increasing demand for data-intensive applications and high-bandwidth network, the growing telecommunication sector, the emergence of machine-to-machine (M2M) communication technologies and internet of things (IoT), and the rising number of data centers are driving the growth of the optical networking and communication market. In 2018, the market generated a revenue of $25.9 billion and is expected to progress at a CAGR of 7.6% during the forecast period (2019&ndash…
Increasing demand for data-intensive applications and high-bandwidth network, the growing telecommunication sector, the emergence of machine-to-machine (M2M) communication technologies and internet of things (IoT), and the rising number of data centers are driving the growth of the optical networking and communication market. In 2018, the market generated a revenue of $25.9 billion and is expected to progress at a CAGR of 7.6% during the forecast period (2019–2024), according to P&S Intelligence.
In simple terms, optical networking and communication is a communication process, in which the data is transmitted through optical fiber. Optical communication uses only light for transmission and is the sole primary step in optical networking. The optical networking and communication market is segmented by component, network connectivity, end–user, and region. Based on component, the market is categorized into hardware, software, and services.
Among these, during the historical period (2014–2018), the hardware category held the highest revenue share in the market, and is further predicted to continue dominating it during the forecast period. This is attributed to the emergence of 5G network, surging data traffic and increasing demand for hardware components capable of supporting high-speed data transmission from data centers. Furthermore, regular upgrades and repairs are also aiding in the growth of the hardware market.
Further, the optical networking and communication market is divided into metro, access, and long-haul network connectivity. Out of these, the metro category is expected to register considerable growth in the forecast period. Currently, metro connectivity is highly service-oriented and competitive, and targets customers in diverse application areas, such as mobile transport, wholesale services, data center interconnect (DCI), and packet connectivity and enterprise wavelength services. An increase in the demand for the metro connectivity from data centers is driving the market.
The growing demand for higher bandwidth in the light of rising internet users and increasing data traffic is notable in the optical networking and communication market. Surging dependence of economies and businesses on smooth connectivity is leading to the increasing requirement for higher bandwidth, which, as a result, is transforming the sector globally. Optical networking is widely being adopted due to the widespread commercial and consumer demand for faster internet services. Furthermore, a significant usage of high-data-rate applications is resulting in the growth of the market.
Also, the increasing number of smartphone users and data centers and rising data intensive application usage rate across the world are propelling the optical networking and communication market growth. Further, with the growing usage of IoT, strong network capacity has become an essential requirement. To deploy IoT, there is need for high-bandwidth and expanded data capabilities to support different connections with varying bandwidth requirements. Additionally, the rising number of connected devices, coupled with the adoption of data-intensive applications, is driving the demand for fiber-optic network, capable of providing data transfer at high speeds.
Therefore, the growing data traffic, emergence of IoT, and increasing demand for high-bandwidth networks are augmenting the market growth.
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