Coherent technologies, along with digital signal processing (DSP), have revolutionized optical communication systems, significantly increasing the capacity of the fiber channel owing to transmission of advanced modulation formats and mitigation of propagation impairments. However, commercial solutions for high-capacity core networks are too complex and costly, and therefore hardly feasible, for access networks with high terminal density, where cost, power budget, and footprint are the main limiting factors. This article analyzes the key enabling techniques to implement a complexity-reduced coherent transceiver (CoTRX) by exploiting photonic integration, simplified optical modulation, low-cost DFB lasers, consumer electronics, and low-complexity DSP. Bulk optical modulators are replaced by direct amplitude-and-phase modulation of an integrated electro-absorption modulated laser (EML) with a smaller footprint, generating up to 8-ary modulation formats. Hardware-efficient DSP algorithms for the coherent transmitter and receiver, including pulse-shaping for direct phase modulation, differential detection for optical phase recovery, and digital pre-emphasis with enhanced tolerance to quantization noise, are investigated to face the challenges imposed by low-cost photonic and electronic devices, such as strong phase noise, wavelength drifts, severe bandwidth limitation, and low resolution data converters. Through numerical simulations and real-time experiments, the results indicate that this new class of CoTRX enables effective implementation of wavelength-to-the-user PON with dedicated 1.25–20 Gb/s per user, in an ultra-dense 6.25–25 GHz spaced WDM optical grid, with >30 dB loss budget, outperforming the current competing technologies for access networks.