Quantum Key Distribution: The Next Generation – A Ten-year Forecast and Revenue Assessment: 2020 to 2029

Report: IQT-QKD-0720
Published July 22, 2020

Inside Quantum Technology has provided coverage of the Quantum Key Distribution (QKD) since 2014 and publishes an annual ten-year market forecast. This report is the latest of these our QKD market studies. It updates the forecasts and analyses the key QKD industry developments over the period since the previous IQT report. Inside Quantum Technology was the first industry analysis firm to predict that quantum security in mobile phones would become a significant revenue earner in the short-term. When we forecast this a couple of years ago, we were criticized, but phones using QRNGs were announced earlier this year and this report discusses how the “mobile QRNG” market will evolve.

There have been some big developments in the QKD space since our previous report. In particular, the regulatory and financial framework for the development of a vibrant QKD business has matured. On the standardization and funding front, the ITU-T standardization is near complete while both the US and UK governments have announced major funding for large-scale quantum networks with QKD as a central component. And the QuantumCtek IPO may just be the beginning of the new public companies in this space.

The report contains forecasts of the hardware and service revenues from QKD in all the major end user groups. It also profiles all the leading suppliers of QKD boxes and services. These profiles are designed to provide the reader of this report with an understanding of how the major players are creating QKD products and building marketing strategies for QKD as quantum computers become more ubiquitous.

Table of Contents: Quantum Key Distribution 2020-2029
Executive Summary
E.1 Key Developments Since our Last Report
E.2 Specific Signs that the Market for QKD is Growing
E.3 Evolution of QKD Technology and its Impact on the Market
E.3.1 Reach (Transmission Distance)
E.3.2 Speed (Key Exchange Rate)
E.3.3 Cost (Equipment)
E.4 Summary of Ten-year Forecasts of QKD Markets
E.4.1 Forecasts by End-user Segment
E.5 Five Firms to Watch Closely in the QKD Space
Chapter One: Introduction
1.1 Why QKD is a Growing Market Opportunity
1.1.1 The Innovators: Governments and the Military
1.1.2 The Early Adopters: Banks and the Financial Sector
1.1.3 The Early Majority: The Telecom Community
1.1.4 The Late Majority: Data Centers and the Enterprise, Utilities and Infrastructure
1.1.5 QKD goes Mobile
1.2 Overview of QKD Technological Challenges
1.2.1 Reach (Transmission Distance)
1.2.2 Speed (key exchange rate
1.2.3 Cost (Equipment)
1.3 Goals and Scope of this Report
1.4 Methodology of this Report
1.5 Plan of this Report
Chapter Two: Technological Assessment
2.1 Setting the Scene: QKD in Cryptography-land
2.2 Why QKD: What Exactly does QKD Bring to the Cryptography Table?
2.3 PQC’s Love-Hate Relationship with QKD
2.4 QKD’s Technological Challenges
2.4.1 Reach (Transmission Distance)—Going the Extra Mile
2.4.2 Speed (Key Exchange Rate) – Faster, Faster, Faster
2.4.3 Cost (Equipment)—The Only Way is Down
2.5 QKD Transmission Infrastructure
2.5.1 Fiber-optic Networks (Terrestrial)
2.5.2 Satellite-based Networks (Space)
2.5.3 Line-of-Sight Networks (Terrestrial)
2.6 Chip-based QKD
2.7 QKD Standardization: Together we are Stronger
2.8 Key Takeaways from this Chapter
Chapter Three: QKD Markets — Established and Emerging
3.1 QKD Markets: A Quantum Opportunity Being Driven by Quantum Threats
3.1.1 Emerging QKD Markets: A New Dawn?
3.1.2 QKD: To Buy or not To Buy? Three Factors to Consider
3.2 Government and Military Markets—Where it all Began
3.2.1 QKD: A Military Option?
3.2.2 The “Quantum” Space Race
3.2.3 Civil Government Markets for QKD
3.2.4 The Role of Government Funding for QKD
3.3 Civilian Markets for QKD
3.3.1 Financial Institutions: Failure is not an Option
3.3.2 The Telecommunication Ecosystem: It Takes a Village
3.3.3 Data Centers and the Enterprise, Utilities and Infrastructure: a Bridge too Far?
3.3.4 Data Centers and the Enterprise
3.3.5 Utilities and Infrastructure
3.4 Key Points from this Chapter
Chapter Four: Ten-year Forecasts of QKD Markets
4.1 Forecasting Methodology
4.2 Changes in Forecast Since Our Last Report
4.2.1 The Impact of COVID-19
4.2.2 Reduction in Satellite Penetration
4.2.3 Faster Reduction in Pricing
4.2.4 Bigger Role for China?
4.2 Forecast by End-User Type
4.3 Forecast by Type of QKD Infrastrucure: Terrestrial or Satellite
4.4 Forecast of Key QKD-related Equipment and Components
4.5 Forecast by Geography/Location of End Users
Chapter Five: Profiles of QKD Companies
5.1 Approach to Profiling
5.2 ABB (Switzerland/Sweden)
5.3 Cambridge Quantum Computing (United Kingdom)
5.4 ID Quantique (Switzerland)
5.4.1 Formation and Funding
5.4.2 Products
5.4.3 Strengths in Overseas Markets
5.4.4 Future Plans
5.5 KETS Quantum Security (United Kingdom)
5.6 MagiQ Technologies (United States)
5.6.1 Pulse Programmers
5.6.2 Entangled Photon Sources
5.7 Nokia (Finland)
5.7.1 Work with SK Telecom
5.7.2 QKD, Cell Phones and Payment Systems
5.7.3 Alcatel-Lucent
5.8 QuantumCtek (China)
5.9 Quantum Xchange (United States)
5.9.1 Networking Plans
5.9.2 Technology
5.10 Qubitekk (United States)
5.10.1 Current Products and Technology
5.11 QuintessenceLabs (Australia)
5.11.1 Advanced Key Management: Trusted Security Foundation (TSF)
5.11.2 True Random Number Generator: qStream
5.11.3 Integrated Encryption Products
5.11.4 Client SDK
5.12 SK Telecom (Korea)
5.12.1 Collaboration with Nokia
5.12.2 Collaboration with and Investment in ID Quantique
5.13 Toshiba (Japan)
5.13.1 Toshiba’s QKD System
5.13.2 Involvement with BT
5.13.3 Field Trial with Quantum Xchange
5.13.4 Whole-Genome Sequence Data Transmission Trial with Tohoku University
About Inside Quantum Technology
About the Analyst
Acronyms and Abbreviations Used In this Report
List of Exhibits
Exhibit E-1: Market for QKD Systems by End User ($ Millions)
Exhibit E-2: Five Firms to Watch in the QKD Space
Exhibit 3-1: QKD Market Segments – State-of-Play
Exhibit 4-1: Market for QKD Systems in the Military (Excluding Mobile Systems)
Exhibit 4-2: Market for QKD Systems in Civil Government (Excluding Mobile Systems)
Exhibit 4-3: Market for QKD Systems at Telecom Companies and Other Service
Providers (Excluding Mobile Systems)
Exhibit 4-4: Market for QKD Systems in Utilities/Infrastructure (Excluding Mobile
Exhibit 4-5: Market for QKD Systems at Data Centers (Excluding Mobile Systems)
Exhibit 4-6: Market for QKD Systems in Mobile, Payment Systems and IoT
Exhibit 4-7: Market for QKD Systems by End User: Other Non-Mobile
Exhibit 4-8: Total Market for QKD Systems by End-user Application
Exhibit 4-9: Market for QKD Systems by Transport Type
Exhibit 4-10: Market for QKD Components and Subsystems ($ Millions)
Exhibit 4-11: Market for QKD Systems by Region/Country ($ Millions)
Exhibit 5-1: Firms to Watch in the QKD Space
Exhibit 5-2: Inside Quantum Technology’s Take—ABB
Exhibit 5-3: Inside Quantum Technology’s Take—Cambridge Quantum Computing
Exhibit 5-4: Inside Quantum Technology’s Take—ID Quantique
Exhibit 5-5: Inside Quantum Technology’s Take—KETS
Exhibit 5-6: Inside Quantum Technology’s Take—MagiQ
Exhibit 5-7: Inside Quantum Technology’s Take—Nokia
Exhibit 5-8: Inside Quantum Technology’s Take— QuantumCtek
Exhibit 5-9: Inside Quantum Technology’s Take—Quantum Xchange
Exhibit 5-10: Inside Quantum Technology’s Take—Qubitekk
Exhibit 5-11: Inside Quantum Technology’s Take—QuintessenceLabs
Exhibit 5-12: Inside Quantum Technology’s Take—SK Telecom
Exhibit 5-13: Inside Quantum Technology’s Take—Toshiba

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