Communication Test Market Dynamics
The communication test sub-segment is closely tied to the telecommunications segment. Specifically, the communications test sub-segment moves in conjunction with the capital expenditures in the telecommunications segment.
After the 2001 correction, capital expenditures was relatively flat (see Figure 1) and, subsequently, the communication test sub-segment has also experienced flat growth over that same period.
Figure 1. Worldwide Telecommunication Capital Expenditures
Note to Figure 1:
- 2005 values are forecasted.
The communication test sub-segment is roughly a $5 billion market growing at a compound annual rate of 5 percent. This sub-segment is comprised of wireline test ($3 billion, 3 percent compound annual growth rate (CAGR)) and wireless Test ($2 billion, 8 percent CAGR).
Wireless Test Equipment
- Spectrum/Noise Analyzers
- Signal Generators
- Handset Emulators/Testers
- Base Station Test
- Tx/Rx Vector Network Tester
- Modulation Domain Tester
Wireline Test Equipment
- Spectrum Analyzers
- Signal Generators
- Network Protocol Analyzers
- DSL Testers
- SONET/SDH Testers
- Intellectual Property (IP) Router Testers
Market Trends & Dynamics
The following determines market trends and dynamics in the communication space:
- The telecommunication capital spending only marginally increasing since 2001
- Communication test spending generally flat
- Test equipment vendors are focusing on and designing reconfigurable platforms:
- Allows for derivative product offerings; leverage the same development and position the product at various performance and price points
- Make test equipment “future-resistant” to extend product life
- Heavy focus on reducing price per port
- Extensive need for functionality testing
- Ideal for small “boutique” companies—over 50 percent of the test market owned by small test vendors
- The following makes FPGAs a logical choice:
- Feature creep
- Constant requests for upgrades
- Evolving and emerging communication standards/protocols
- Early access to leading edge-technology is critical:
- Usually a 12- to 18-month difference between start of test equipment development and mass technology adoption
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