FSO & VLC/Li-Fi Market by FSO Component, FSO Application, FSO Vertical, VLC Component (LED, Photodetector, Microcontroller, Software), Transmission Type, VLC Application and Region (Americas, Europe, Asia Pacific and RoW) - Global Forecast to 2028
[253 Pages Report] According to MarketsandMarkets, the FSO & VLC/Li-Fi market is projected to grow from USD 3.3 billion in 2023 to USD 18.2 billion by 2028, registering a CAGR of 40.3% during the forecast period.
Key factors fueling the growth of this market include the alternative solution to RF technology for outdoor networking, increasing adoption of FSO in place of RF communication, and high growth of LEDs due to less energy consumption. High emergence of new applications such as IoT and 5G and growing adoption of Li-Fi in various industries create a strong demand for FSO/Li-Fi for efficient industrial operations. Players in the FSO & VLC/Li-Fi market adopted growth strategies such as product launches, partnerships, collaborations, and strategic alliances to cater to the growing demand for FSO & VLC/Li-Fi systems and expand their global footprint to all the major regions.
The objective of the report is to define, describe, and forecast the FSO & VLC/Li-Fi market based on component, product, application, vertical, and region.
FSO & VLC/Li-Fi Market Forecast to 2028
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FSO & VLC/Li-Fi market dynamics
Driver: Faster and safer data transfer than other challenging technologies
VLC/Li-Fi technology is very efficient in terms of energy consumption. The VLC system consumes very low energy by using LEDs for data transmission purposes. According to the Ultra-Parallel Visible Light Communications (UP-VLC) program funded by the Engineering and Physical Sciences Research Council (EPSRC), data rates up to 3.5 Gbps can be achieved with a single blue LED, or up to 1.7 Gbps can be achieved with white light. With the help of LED, large quantities of data can be transferred across a spectrum 10,000 times wider than the RF spectrum. VLC technology is greener, cleaner, and safer as it produces no hazardous emissions, unlike RF, and is also biologically safe. Thus, faster and safer data communication than other competing technologies is the major driving factor for VLC technology.
Restraint: High installation price for FSO solutions
The high installation cost of FSO technology-based devices is a hindrance to the wide adoption of the FSO system. The high initial expenses on the components used in the setup of the whole communication system, which is around USD 3,000 to USD 15,000 for the hardware, and around USD 500 to USD 1,000 for an installation, could negatively impact the customers’ decision to adopt the FSO technology. Although the cost incurred in installing the FSO technology is significantly less than the cost of deploying fiber-optic lines, the installation of FSO in a smaller area incurs a higher cost compared to that of large buildings. Hence, the mass installation of FSO helps in reducing the cost of the overall installation.
Opportunity: Growth in adoption of Li-Fi in various industries
VLC is a promising technology not only for increasing the capacity of indoor wireless communication but also for ensuring security. White LEDs are rapidly penetrating the market, and they can be used for both lighting and communication. VLC provides a cost-effective technique for duplex communication for home users and also satisfies the requirements of a small LAN. After the deployment of 3G systems, researchers have observed that customers are demanding more bandwidth. To fulfill these needs, fourth-generation (4G) and further systems are being introduced as heterogeneous access techniques must be available. Moreover, VLC technology is ubiquitous, and it can be utilized in multiple applications such as smart stores, streetlights, hospitals, aerospace, underwater, and hazardous environment.
Challenge: Reliability issues due to fading of signals during propagation
The most significant one is the reliability issue due to signal degradation during propagation, resulting from environmental interferences such as fog, scintillation, absorption, scattering, and physical obstructions such as birds and trees. The atmosphere has a detrimental impact on optical beams, which worsens as the length of the link increases. The major challenge to FSO communications is fog. The primary way to counter fog while deploying FSO is through a network design that shortens FSO link distances and adds network redundancies. At present, the fading of signals during propagation due to environmental interference is posing a major challenge of reliability; however, with the advancement in technology, it is expected that a solution would soon be found to this problem.
Mobile backhaul and consumer electronics held largest share of FSO and VLC market in 2022
The mobile backhaul application is expected to continue to account for the largest size of the FSO market. Wireless networks are evolving from voice-only traffic to networks that support voice and high-speed data services. At the time of such transition, there is a growing requirement for additional bandwidth. Wireless service backhaul transport requirements are explained by wireless 2G and 3G spectrums, cell site capacity requirements, and performance metrics that include latency and jitter. At present, the mobile backhaul market is experiencing a paradigm shift from the current plesiochronous digital hierarchy (PDH) and asynchronous transfer mode (ATM) to Ethernet-based network solutions. This is primarily due to the increasing demand for frequency bandwidth and pressure on mobile operators to reduce costs. Various backhaul carrier technologies are time-division multiplexing (TDM) leased lines, digital subscriber line (DSL), microwave, passive optical network (PON–EPON/GPON), fiber-based Ethernet, and FSO. FSO can be used as a complementary technology for custom wireless technologies, such as Wi-Fi and WiMAX, that use microwave/RF spectrum for these applications. Therefore, many network service providers offer dual-mode systems with FSO and microwave as they complement each other.
Bidirectional to own maximum share by transmission type in FSO & VLC/Li-Fi market
The bidirectional segment held a large share of the market in 2022, and this trend is projected to continue during the forecast period. Unidirectional VLC has unidirectional and point-to-point light communication at low data rates. While the bidirectional VLC technology is fully networked, bidirectional, and high-speed wireless communication, the technology is projected to be adopted by all the major verticals. The market is projected to account for a significant share and surpass the growth of the unidirectional transmission type market during the forecast period.
FSO & VLC/Li-Fi market to witness highest demand from Asia Pacific
The Asia Pacific region is forecasted to account for the largest share of the FSO and VLC market by 2028. The FSO and VLC market in the Asia Pacific is expected to grow at the highest CAGR during the forecast period. APAC is a promising market for manufacturers of VLC technology. Japan is considered as a hub for VLC developments in APAC. Key application areas in this region are communication, underwater communication, and automotive. Also, as VLC players are focusing on the integration of VLC systems with consumer electronic devices, the market in APAC is projected to grow, as the region has the presence of various leading consumer electronics manufacturers. Outstanding Technology (Japan), Renesas Electronics (Japan), Fujitsu (Japan), Panasonic (Japan), and LG Electronics (South Korea) are actively involved in the R&D activities of VLC technology in APAC.
FSO & VLC/Li-Fi Market by Region
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Key Market Players
Major vendors in the FSO & VLC/Li-Fi market include fSONA Networks Corp. (Canada), Wireless Excellence Limited (UK), Signify Holding (Netherlands), Oledcomm (France), Lucibel (France), pureLiFi Limited (UK), Acuity Brands (US), Panasonic Corporation (Japan), Fraunhofer HHI (Germany), and Trimble Hungary (Hungry), among others.
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Report Metric |
Details |
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Market Size Available for Years |
2019–2028 |
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Base Year |
2022 |
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Forecast Period |
2023–2028 |
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Units |
Value (USD Million/USD Billion) |
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Segments Covered |
Component, Transmission Type, Application, Vertical, and Region |
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Regions Covered |
Americas, Europe, Asia Pacific, and RoW |
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Companies Covered |
fSONA Networks Corp. (Canada), Wireless Excellence Limited (UK), Signify Holding (Netherlands), Oledcomm (France), Lucibel (France), pureLiFi Limited (UK), Acuity Brands (US), Panasonic Corporation (Japan), Fraunhofer HHI (Germany), and Trimble Hungary (Hungary) |
FSO & VLC/Li-Fi Market Highlights
This report categorizes the FSO & VLC/Li-Fi market based on component, product, application, vertical, and region.
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Aspect |
Details |
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By FSO Component: |
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By FSO Application: |
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By FSO Vertical: |
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By Transmission Type (VLC Market): |
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By VLC Component: |
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By VLC Application: |
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By Geography (FSO and VLC): |
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Recent Developments
- In February 2022, pureLiFi demonstrated the next generation of connectivity for the home at the Mobile World Congress (MWC) in Barcelona. The ground-breaking demonstration features the world’s first LiFi ecosystem for the consumer market, named [email protected]™.
- In July 2022, PureLiFi received a £10M boost to their business through a partnership with the Scottish government. The partnership with the Scottish National Investment Bank will enable pureLiFi to develop new technologies further while opening up additional markets in areas such as mobile phones, tablets, wearables, and other connected devices.
- In April 2021, pureLiFi announced a new deal to supply the US Army with Kitefin™, the next-generation optical wireless communication system using LiFi for secure data transmission without radio frequencies.
- In September 2021, Lucibel announced the third generation of their Li-Fi product, named Lucipanel LiFi. The growing interest in LiFi technology on the part of many players (designers and integrators of Li-Fi solutions, manufacturers of smartphones and computers, telecom operators, end customers, etc.) makes it possible to anticipate a rapid acceleration in Li-Fi penetration from the start.
- In September 2020, Panasonic collaborated with Octasic Inc. (Canada), an innovation leader in low-power programmable processors for wireless and multimedia applications, to develop shared eXtended Global Platform (sXGP) solutions to involve 5G and Beyond 5G-based wireless network products, especially for mission-critical applications.
Frequently Asked Questions (FAQ):
Which are the major applications of Li-Fi? How huge is the opportunity for their growth in the next five years?
The major applications of Li-Fi include consumer electronics, defense and security, vehicle and transportation, aviation, hospital, underwater communication, and hazardous environment. These are expected to open new revenue pockets for the Li-Fi market, which will lead to a market opportunity of USD 100.0 billion.
Which are the major companies in the Li-Fi market? What are their major strategies to strengthen their market presence?
Signify Holding (Netherlands), Oledcomm (France), Lucibel (France), pureLiFi Limited (UK), and Acuity Brands (US) are dominant players in the global Li-Fi market. Product launches are one of the key strategies adopted by these players. Apart from product launches and developments, these players extend their focus on partnerships, expansions, and acquisitions.
Which region is expected to witness significant demand for Li-Fi market in the coming years?
The Asia Pacific region is the highest-growing region for this market. Most industrial manufacturing players present across the world have their headquarters in this region. The increasing population is also expected to create opportunities for urbanization and industrialization, which, in turn, will drive the market for Li-Fi.
What are the drivers and opportunities for the Li-Fi market?
Faster and safer data transfer than other challenging technologies is a major driving factor for the Li-Fi market growth. Opportunities for the manufacturers in the Li-Fi market include growth in the adoption of Li-Fi in various industries and the high emergence of new applications such as IoT and 5G.
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The research process for this study included systematic gathering, recording, and analysis of data about customers and companies operating in the FSO & VLC/Li-Fi market. This process involved the extensive use of secondary sources, directories, and databases (Factiva, Oanda, and OneSource) for identifying and collecting valuable information for the comprehensive, technical, market-oriented, and commercial study of the FSO & VLC/Li-Fi market. In-depth interviews were conducted with primary respondents, including experts from core and related industries and preferred manufacturers, to obtain and verify critical qualitative and quantitative information as well as to assess growth prospects. Key players in the FSO & VLC/Li-Fi market were identified through secondary research, and their market rankings were determined through primary and secondary research. This research included studying annual reports of top players and interviewing key industry experts such as CEOs, directors, and marketing executives.
Secondary Research
In the secondary research process, various secondary sources were referred to for identifying and collecting information important for this study. Secondary sources included corporate filings, such as annual reports, investor presentations, and financial statements; trade, business, and professional associations; white papers, FSO & VLC/Li-Fi products-related journals, and certified publications; articles by recognized authors; directories; and databases.
Secondary research was conducted to obtain key information about the industry supply chain, market value chain, key players, market classification and segmentation as per industry trends to the bottom-most level, geographic markets, and key developments from both market- and technology-oriented perspectives. Data from secondary research was collected and analyzed to determine the overall market size, which was further validated by primary research.
Primary Research
In the primary research process, various sources from the supply and demand sides were interviewed to obtain qualitative and quantitative information for this report. Primary sources from the supply side included industry experts such as CEOs, VPs, marketing directors, technology & innovation directors, and key executives from major companies in the FSO & VLC/Li-Fi market.
After going through market engineering (which includes calculations for market statistics, market breakdown, market size estimations, market forecasting, and data triangulation), extensive primary research was conducted to gather information and verify and validate the critical numbers obtained. Primary research was conducted to identify segmentation types, industry trends, key players, competitive landscape, and key market dynamics such as drivers, restraints, opportunities, and challenges, along with the key strategies adopted by players operating in the market.
To know about the assumptions considered for the study, download the pdf brochure
Market size Estimation
In the complete market engineering process, both top-down and bottom-up approaches were used, along with several data triangulation methods, to estimate and forecast the size of the market and its segments and subsegments listed in the report. Extensive qualitative and quantitative analyses were carried out on the complete market engineering process to list the key information/insights pertaining to the FSO & VLC/Li-Fi market.
The key players in the market were identified through secondary research, and their rankings in the respective regions were determined through primary and secondary research. This entire procedure involved the study of the annual and financial reports of top players, as well as interviews with industry experts such as chief executive officers, vice presidents, directors, and marketing executives for quantitative and qualitative key insights. All percentage shares, splits, and breakdowns were determined using secondary sources and verified through primary sources. All parameters that affect the markets covered in this research study were accounted for, viewed in extensive detail, verified through primary research, and analyzed to obtain the final quantitative and qualitative data. This data was consolidated and enhanced with detailed inputs and analysis from MarketsandMarkets and presented in this report.
FSO & VLC/Li-Fi Market: Bottom-up Approach
Data Triangulation
After arriving at the overall size of the FSO & VLC/Li-Fi market from the market size estimation process explained above, the total market was split into several segments and subsegments. Where applicable, the market breakdown and data triangulation procedures were employed to complete the overall market engineering process and arrive at the exact statistics for all segments and subsegments. The data was triangulated by studying various factors and trends from both the demand and supply sides. Additionally, the market size was validated using top-down and bottom-up approaches.
Report Objectives
- To describe and forecast the FSO & VLC/Li-Fi market, in terms of value, based on component, product, application, and vertical
- To describe and forecast the FSO & VLC/Li-Fi market size, in terms of value, with respect to four regions: North America, Europe, Asia Pacific, and the Rest of the World (RoW)
- To provide detailed information about the drivers, restraints, opportunities, and challenges influencing the growth of the FSO & VLC/Li-Fi market
- To provide a detailed overview of the supply chain of the FSO & VLC/Li-Fi ecosystem
- To strategically analyze micromarkets1 with respect to individual growth trends, prospects, and contributions to the overall market
- To analyze opportunities in the market for various stakeholders by identifying the high-growth segments of the market
- To benchmark the market players using the proprietary company evaluation matrix framework, which analyzes the market players on various parameters within the broad categories of business strategy excellence and strength of product portfolios
- To strategically profile the key players and comprehensively analyze their market positions in terms of ranking and core competencies2, along with a detailed competitive landscape of the market
- To analyze competitive developments in the FSO & VLC/Li-Fi market, such as acquisitions, product launches, partnerships, expansions, and collaborations
Available customizations
With the given market data, MarketsandMarkets offers customizations according to the specific requirements of companies.
Product analysis
- Detailed analysis and profiling of additional market players
The following customization options are available for the report:
- Market sizing and forecast for additional countries
- Additional five companies profiling
Future of The Free Space Optics (FSO) and Visible Light Communication (VLC) , RF Communication Market
Free Space Optics (FSO) and Visible Light Communication (VLC) are promising technologies that are expected to grow in popularity in the future. FSO uses lasers or LEDs to transmit data through the air, providing high-speed data transfer without physical cables or wires, making it an ideal solution for high-bandwidth applications such as telecommunications, military communications, and data centers. VLC uses visible light to transmit data, making it ideal for indoor communications and other applications where traditional RF communication may be limited. Both technologies are expected to be used in a wide range of applications in the future, including smart cities, industrial automation, and autonomous vehicles. However, RF communication will still play an important role in many applications, and it is unlikely that these technologies will completely replace RF communication in the near future.
Growth Opportunities for RF Communication market :
Despite the potential of FSO and VLC, the RF communication market is still expected to experience growth and opportunities in the future.
RF communication remains the dominant technology in many applications and industries due to its reliability, range, and compatibility with existing infrastructure.
The increasing number of connected devices requires reliable and efficient communication, and RF communication is well-suited for this task, making the Internet of Things (IoT) an area of growth for RF communication.
With the development of autonomous vehicles, there is a need for reliable and high-speed communication between vehicles and infrastructure, and RF communication is expected to play a critical role in enabling this communication, particularly in areas such as vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) communication.
The growth of 5G networks is expected to drive demand for RF communication technology, particularly in the areas of small cells and backhaul.
As new applications and use cases emerge, the demand for RF communication is expected to continue to rise, particularly in areas such as IoT, automotive, and 5G networks.
Some futuristic growth use-cases of RF Communication market?
The RF communication market is expected to experience significant growth in the future due to the emergence of new use cases and applications. Some of the futuristic growth use-cases of RF communication market include:
Smart cities : As cities become more connected and integrated, the demand for reliable and efficient communication is expected to grow. RF communication technology is well-suited for this task and is expected to play a critical role in enabling the development of smart cities.
Wearables : The wearable technology market is expected to experience significant growth in the future, and RF communication is likely to be a key component of these devices. RF communication can enable communication between wearables and other devices, as well as enable real-time monitoring and data collection.
Augmented and virtual reality : As the use of augmented and virtual reality technology grows, the demand for high-speed, reliable communication is expected to rise. RF communication can enable real-time communication between devices and support the transfer of large amounts of data.
Industry 4.0 : The fourth industrial revolution, or Industry 4.0, is expected to transform the manufacturing industry. RF communication is expected to play a critical role in enabling the communication and coordination of machines and other devices in smart factories.
Space exploration : The growth of the commercial space industry is expected to drive demand for RF communication technology. RF communication is essential for communication with spacecraft and other space-based assets.
Niche Threats
Security concerns : RF communication is vulnerable to interception and hacking, which could compromise the security of data being transmitted. As the use of RF communication grows, there is a risk that security threats could also increase.
Spectrum availability : The availability of radio spectrum is limited, and as the use of RF communication grows, there is a risk of spectrum becoming congested. This could impact the performance of RF communication systems and limit their ability to transmit data.
Interference : RF communication is vulnerable to interference from other radio signals, which could impact its performance. As the number of wireless devices grows, there is a risk that interference could increase, which could impact the reliability of RF communication.
Competition from other technologies: While RF communication is well-suited for many applications, it is not the only technology available. Other technologies, such as FSO and VLC, are also emerging and could potentially compete with RF communication in some applications.
The market scope of RF communication also includes various applications such as:
Telecommunications: RF communication is a key component of modern telecommunications infrastructure, including cellular networks, Wi-Fi, and other wireless communication systems.
Broadcasting: RF communication is also used for broadcasting applications, including television and radio broadcasting.
Military and defense: RF communication is essential for military and defense applications, including communication between soldiers and commanders, as well as communication with unmanned aerial vehicles (UAVs) and other military assets.
Transportation: RF communication is used for a wide range of transportation applications, including communication between aircraft, ships, and ground-based vehicles, as well as communication with air traffic control and other transportation infrastructure.
Industrial automation: RF communication is used for industrial automation applications, including communication between machines and other equipment in factories and other industrial settings.
Top Companies in RF communication market
The RF communication market is highly competitive, with many companies operating in this space. Some of the top players in the market include Qualcomm, Broadcom, Intel, Nokia, Ericsson, Texas Instruments, Analog Devices, and Murata Manufacturing. These companies are major producers of RF communication technology for various applications, ranging from smartphones and tablets to telecommunications networks and industrial automation. As the demand for wireless communication technology continues to grow, these companies are expected to play a major role in the development and growth of the RF communication market in the future.
Growth opportunities and latent adjacency in FSO & VLC/Li-Fi Market
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