Published: Sep, 2016
The global passive optical components market is highly fragmented, with a large number of players dominating across their respective regions, says Transparency Marketing Research (TMR) in a new study. Some of the key players are Alcatel-Lucent, AT&T Inc., Cortina Systems Inc., Hitachi Communications Technologies America Inc., Motorola Solutions, and Qualcomm Atheros.
“Market participants are seeking to gain market shares through product differentiation, which requires high capital investment and highly advanced infrastructure. This poses a high entry barrier for new players,” says the author of the report. Moreover, brand creation is extremely difficult for new players, as existing players are well established.
The global passive optical components market stood at US$14.65 bn in 2015 and is poised to rise to US$38.19 bn by 2020, expanding at an impressive CAGR of 21.1% between 2014 and 2020. Based on applications, the synchronous digital hierarchy (SDH) systems segment dominated the market in 2015 and due to their ability to transfer multiple digital bit streams over optical fiber using light-emitting diodes or lasers, it is expected to retain its leadership until 2020, with a share of 31.68% of the global market revenue share. Synchronous optical network (SONET) will expand at a noteworthy CAGR during the same period. Geographically, Asia Pacific was the leading segment in 2015 and is estimated to retain its dominance until 2020. The region is anticipated to exhibit a significant CAGR of 22.0% during the same period owing to the rapidly growing telecommunication sector in emerging economies such as India and China.
Increasing Demand for Passive Optical Network to Augur Well for Growth of Overall Market
There is a growing need for higher bandwidths, especially in Asia Pacific and Latin America. An increasing number of subscribers has led to rising number of devices connected to networks and more data-dense services to ride over networks. This factor is accelerating requirements for bandwidth, which is expected to augment the growth of the global passive optical components market.
The rising demand for passive optical networks in the Asia Pacific region, especially in China, is contributing to the growth of the global passive optical components market. The mass adoption of electronic gadgets and creation of a large volume of data traffic is driving the end-users in China to switch to a wired optical medium from a wireless medium. Moreover, passive optical local area network (POL) solutions are more environment-friendly and energy efficient than the conventional copper-based Ethernet local area network. The former has greater fire load saving ability and uses lesser ceiling space.
Growing Preference for Wireless Broadband to Hamper Growth Prospects
The growing preference for wireless broadband has emerged as a threat for the global passive optical components market. Mobile technology is advancing rapidly and the penetration rate of smart devices is increasing significantly. “4G LTE networks provide high-speed Internet connectivity, which is more beneficial than passive optical components for mobile users,” says a TMR analyst. Moreover, these components are highly prone to signal losses such as attenuation, dispersion, and bending losses and incur high deployment cost. These factors, collectively, will restrain the large-scale adoption of passive optical components globally.
However, technological advancements are expected to address the problem by reducing the extent of optical losses, increasing data transfer speed, and minimizing additional deployment costs. Furthermore, the rising demand for bandwidth and high data rates in Europe are expected to fuel the steady growth of the global passive optical components market in the near future.
The information presented in this review is based on a Transparency Market Research report, titled, ‘Passive Optical Components Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2014 - 2020.’
The global passive optical components market has been segmented as follows:
Passive optical components market: By geography
- North America
- Rest of the World
Passive optical components market: By components
- Optical cables
- Optical power splitters
- Optical couplers
- Optical encoders
- Optical connectors
- Patch cords and pigtails
- Optical amplifiers
- Fixed and variable optical attenuators
- Optical transceivers
- Optical circulators
- Optical filters
- Wavelength Division Multiplexers/De-multiplexers
Passive optical components market: By application
- Loop feeder
- Fiber In The Loop (FITL)
- Hybrid Fiber-Coaxial Cable (HFC)
- Synchronous Optical Network (SONET)
- Synchronous Digital Hierarchy (SDH) systems
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