The market for FSO is in the growth phase, while the market for VLC is currently in the introductory phase. Both the markets are expected to grow rapidly during the forecast period. The FSO market is expected to grow from USD 116.7 million in 2015 to USD 940.2 million by 2020, at a CAGR of 51.8% between 2015 and 2020. The VLC market is expected to grow from USD 327.8 million in 2015 to USD 8.50 billion by 2020, at a CAGR of 91.8% during the forecast period.

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Because of the scalability and flexibility of FSO technology, optical wireless products can be deployed in many applications such as mobile backhaul, enterprise connectivity, disaster recovery, defense, satellite, healthcare, security, engineering and design, and others including redundant link, storage area network, last mile access, and metropolitan area network. Of all the major applications of FSO, mobile backhaul application held the largest share of the overall market for FSO applications in 2015, closely followed by the enterprise connectivity application. These two applications were the early adopters of the FSO technology and are also driving the FSO market currently. The healthcare application is expected to be the fastest-growing application in the FSO market between 2015 and 2020, followed by the disaster recovery application.

The major components of the VLC system are LEDs, photodiodes, microcontrollers, and software. The VLC products available in the market are either hardware such as transmitters, receivers, and routers, or software such as cloud server, middleware and firmware, and applications to be installed on phones and tablets to enable VLC. LED is the major component of the VLC system, and it is expected to dominate the market during the forecast period.

As of 2015, the VLC market was only commercialized for unidirectional communication; it is gaining attention mainly from applications such as smart stores, street lighting, and museums. However, by 2020, bidirectional communication is also expected to be commercialized, which would make consumer electronics the major application of VLC, in which VLC would be used primarily for indoor networking and positioning. Conversely, vehicle & transportation and hospital would be some of the fastest-growing applications of the VLC market till 2020.

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The FSO and VLC markets have also been broadly classified on the basis of geography into the Americas, Europe, Asia-Pacific, and Rest of the World. Of these, Europe held the major share of the overall FSO market in 2014, closely followed by the Americas. The two regions were the early adopters of the technology and still continue to dominate the market. The Americas held the largest share of the VLC market in 2015, mainly owing to the government funding and deployment of several VLC systems in the public as well as commercial places.