Free space optics communication (FSO) is a line-of-sight optical wireless technology for broadband telecommunication that uses light in the visible, infrared, or ultraviolet spectrum propagating in free space to transmit data. FSO provides new opportunities to address the increasing demand for high-speed communication networks and broadband access in several applications including enterprise connectivity, cellular backhaul, disaster recovery, and community networks.
Market Opportunity:
The opportunity for last mile connectivity is expected to drive growth of the free space optics communication market during the forecast period. Around 45% of the world's population lives in rural areas where deploying fiber or cable network infrastructure can be challenging from both technical and economic perspective. FSO provides a cost-effective solution for last mile connectivity in rural and remote areas without requiring right of way for cable networks. The demand for high-speed internet in off-grid locations is increasing rapidly which can be effectively addressed by free space optics solutions, thereby presenting lucrative growth opportunities for players in the market.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is moderate as there are costs associated with R&D, production, marketing, etc. However, the demand for FSO equipment is growing which can attract new players.
Bargaining power of buyers: The bargaining power of buyers is high as there are many established players providing FSO equipment. Buyers can negotiate on price and compare offerings.
Bargaining power of suppliers: The components used in FSO equipment manufacturing like semiconductors, lenses etc are available from multiple global suppliers. This limits their bargaining power.
Threat of new substitutes: Substitutes like fiber optics are dominant but FSO has an advantage in quick deployment over short links. This threat is low to moderate.
Competitive rivalry: Being a specialized technology, competition is intense among leading FSO players to drive volume. Price wars and new product launches mark high rivalry.
SWOT Analysis
Strengths: FSO offers quick deployment over short links for connectivity. It has no licensing issues and lower setup costs than fiber optics.
Weaknesses: FSO is dependent on line of sight and weather conditions. Signal strength reduces with distance limiting transmission range to a few kms.
Opportunities: Growing demand for connectivity solutions from enterprises, telecom sector provides scope. Government initiatives on connectivity in rural areas boosts prospects.
Threats: Established alternatives like fiber have broader coverage. Technological changes may make FSO obsolete in future. Regulations on use of unlicensed spectrum bands act as a constraint.
Key Takeaways
The Global Free Space Optics Communication Market Demand is expected to witness high growth during the forecast period of 2023 to 2030. The market size for 2023 is estimated to be US$ 5.9 Bn with North America dominating currently due to large telecom operations and defense spending in the region.
Regional analysis for Asia Pacific comprises some key factors driving growth. Countries like India, China and Japan are actively working to improve connectivity and deploy networks in rural areas. This provides opportunities for FSO equipment suppliers. Rapid digitalization and expansion of telecom infrastructure also aids the FSO communication market growth in Asia Pacific.
Key players operating in the Free Space Optics Communication market are Boost Oxygen, LLC, CAIRE Inc. (AirSep), Chart Industries, DeVilbiss Healthcare LLC, Inogen, Inc., Oxygen Plus, Inc., Pure O2 Ltd, Invacare Corporation, Oxyzens, Philips Healthcare, Zadro Health Solutions, and 2ND Wind Oxygen Bars. These players are focusing on new product launches catering to different application segments to strengthen their market position.
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