Optical networking is a technique of signal transmission, in which the input signal is encoded or converted into light pulse and transmitted via various nodes of a telecommunication network. As the signal is transmitted in terms of light, the data signal travels with minimum possible losses and maximum possible bandwidth. Optical network equipment is used in various applications ranging from short-range wide area network (WAN) and local area network (LAN) to long-range international and interoceanic network connections. Some of the major hardware components used in optical communication are LEDs, lasers, optical amplifiers, and optical fiber as transmission channels. The optical networking systems are built on wavelength division multiplexing (WDM), synchronous digital hierarchy (SDH), and synchronous optical networking (SONET) technologies. Packet optical networking is a type of optical networking. Packet optical networking systems are built on packet-based optical transport and hybrid circuits. Packet optical networking integrates SONET, reconfigurable optical add-drop multiplexer (ROADM)-based WDM, and connection-oriented Ethernet technologies. Packet optical networking eliminates unnecessary network elements and associated costs to deliver improved infrastructure networking efficiency.

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Significant rise in digital online content and rise in demand for bandwidth are anticipated to drive the global packet optical networking equipment market during the forecast period. Proliferation of mobile devices and substantial adoption of wireless networking technologies are leading to tremendous online digital content generation. The demand for network bandwidth is growing from business and residential customers, due to increase in the use of online shopping tools, social media, video surfing, and online gaming. This is forcing networking equipment manufacturers and network service providers to provide network infrastructure equipment that can support higher digital traffic. In the last few years, the number of data centers has also increased. There data centers store and manage data efficiently. Demand for packet optical networking equipment is on the rise from data center service providers due to the need to provide content with improved speed and bandwidth. These factors are likely to drive the packet optical networking equipment market. However, significant capital expenditure is required to implement packet optical networking equipment infrastructure. This is expected to hinder the packet optical networking equipment market in the coming years. Small- and medium-sized organizations are reluctant for this kind of upfront capital investments. Nevertheless, rise in cloud storage adoption by many major organizations around the globe is expected to present attractive expansion opportunities over the forecast period.

The global packet optical networking equipment market can be segmented based on component, end-user, and region. In terms of component, the market can be classified into hardware, software, and services. The services segment can be further bifurcated into professional and managed. In terms of end-user, the packet optical networking equipment market can be categorized into media & entertainment, IT & telecom, manufacturing, government, and data centers. The data centers segment is likely to account for a significant market share over the forecast period. Based on region, the global packet optical networking equipment market can be divided into North America, South America, Europe, Asia Pacific, and Middle East & Africa. North America and Europe are expected to hold a significant share of the packet optical networking equipment market from 2018 to 2026, due to the presence of major solution providers in the region. Expansion of some of the major market players in the region is likely to present lucrative market growth opportunities in Asia Pacific.

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Several market players operating in the packet optical networking equipment market are engaging in strategic alliances with data center service providers to increase their market share. Key players operating in the global packet optical networking equipment market include Cisco Systems Inc. Huawei Technologies Co., Ltd., Ciena Corporation, Infinera Corporation, LightRiver Technologies, ADVA Optical Networking, Juniper Networks, Inc., PacketLight Networks, Wipro Limited , Nokia Corp., and Tejas Networks Ltd.

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