Commercial Market
US Electronics Sales Rise 11 Percent in 1997
Electronic Industries Association data show that US factory sales of electronics equipment, components and related products totaled over $460 B in 1997, an 11 percent increase over 1996 sales. The telecommunications sector enjoyed the highest growth as its 1997 sales rose 14 percent to $64.9 B compared to $57.1 B in 1996. The other related products and services sector was a close second with a 13 percent growth from 1996 sales of $64.4 B to $72.4 B in 1997.
The components sector grew by 12 percent as its 1997 sales rose to $147.6 B from $131.6 B in 1996. Defense communications showed a healthy nine percent increase with 1997 sales of $29.3 B from $26.8 B in 1996. This increase was matched by the computer and peripherals sector as its 1997 sales of $90 B also represented a nine percent growth over the 1996 total of $83 B. The list was completed by the US-produced consumer electronics sector, which grew eight percent, and the electromedical equipment and industrial control electronics sectors, both of which showed seven percent increases in sales.
Regional Telephone Companies Move into DBS TV
Two of the major local telephone companies and direct broadcast satellite (DBS) television service providers have announced marketing and distribution agreements. SBC Communications Inc. has entered into a multiyear agreement with DIRECTV and an agreement in principle with US Satellite Broadcasting (USSB) to provide digital satellite television service as part of Southwestern Bell’s communications package for apartment complexes. DIRECTV and USSB programming will be offered through digital set-top boxes as part of Southwestern Bell’s SmartMoves" program, which permits managers and owners of apartment complexes or multi-dwelling units to offer a complete line of communications and entertainment services to their tenants. The video offering will include access to the popular entertainment networks, sports and pay-per-view movies from DIRECTV, and premium movie networks and Big Events pay-per-view programming from USSB. SmartMoves also will provide access to local channels through integrated antennas. The digital satellite television service will be available almost immediately in the major markets within SBC’s five-state territory.
In its announcement, Bell Atlantic discusses its multi-year marketing and distribution agreement with DIRECTV and its agreement in principle with USSB to offer DBS television service to customers in the single-family residence market. Agreements also have been made in principle with both satellite service suppliers to offer premium movie networks and pay-per-view programming to multiple-family dwellings (primarily apartments). Service for single families is scheduled to begin this summer in two major markets to be announced. Bell Atlantic is already addressing opportunities to install the service in the commercial and apartment markets in its service area.
US WLAN Market to Approach $700 M
Frost & Sullivan’s recent report, "The US Wireless LAN Market," which covers the market from 1998 to 2003, forecasts that the strong projected compound annual growth rate of 20.7 percent for the US wireless local area network (WLAN) market will increase its value to $697.7 M in 2003. The 1996 WLAN market of $187.1 M represented a growth of 45 percent over 1995 revenues but that rate will not be sustained.
The majority of market revenue is generated by direct-sequence spread spectrum (DSSS) and frequency-hopping spread spectrum (FHSS) installations. Infrared systems, direct-beam and diffused-beam types are not as widely employed. In 1996, DSSS installations accounted for 52.1 percent of the WLAN market; FHSS equipment increased its 1993 share of 8.3 percent to 40.9 percent in 1996. The total share of infrared systems in 1996 was seven percent.
According to the report, the WLAN market is being driven by increased reliance on networks and the access to those resources that it offers. On the other hand, it is being restrained by current speed limitations, cost, the perception that it does not offer sufficient performance and a general lack of awareness of its capabilities. Compliance with IEEE standard 802.11 is proving to be difficult and, combined with the demand for higher data rates, is raising research and development costs for equipment suppliers at a time when prices should be dropping to make the systems more attractive. Retail, transportation and warehousing were among the first markets to make wide use of WLAN systems, but growth in those markets is slowing. Healthcare and education applications are considered the most rapidly growing sectors currently.
The report suggests that FHSS systems offer lower cost and roaming access capabilities that make them a good match for the expanded use of portable computers. However, the systems have limited data rates and some reliability problems.
Reportedly, the largest suppliers of WLAN equipment are Lucent Technologies, Proxim Inc. and AIRONET Wireless Communications Inc., which control 59 percent of the market. Second-tier suppliers include Digital Equipment Corp., Symbol Technologies Inc. and Windata Inc. For additional information, contact Frost & Sullivan, Mountain View, CA (415) 961-9000.
Western European Cellular Telephone Market Forecast to Exceed 140 Million Subscribers
According to a new report from UK-based Analysys Publications, "European Cellular Market Forecasts: 1998–2003," the Western European cellular telephone market could exceed 140 million subscribers by 2003 — a 175 percent increase over 1997’s total of 50 million. Both Central and Eastern Europe are also forecast to experience aggressive growth rates during the same time frame. While the Western European demand is expected to be driven increasingly by the consumer market, growth in Central and Eastern Europe will be attributed largely to business demands. Growth in all three sectors is expected to benefit from the falling cost of mobile service, increased competition and the introduction of Global System for Mobile communications 900 and 1800 networks.
The report suggests that long-term growth in Western Europe will be sustained only if mobile operators can attract nonbusiness customers. While the consumer subscriber count is expected to exceed the business count by 2003, business revenues will continue to be larger and are forecast to account for over 75 percent of the $23 B market by 2003.
Growth in Central and Eastern Europe is expected to run at 23 percent per year compared to Western Europe’s 21 percent, but fewer market development opportunities will exist because of the lower per capita earnings in those areas. Penetration in Central and Eastern Europe is expected to increase to five percent by 2003 from 1.75 percent in 1997. For additional information, contact Elizabeth McDonald, Analysys Publications +44 (0) 1223 341300 or e-mail: elizabeth.mcdonald@analysys.com.
New North American Mobile Satellite Service Launched
TMI Communications, Ottawa, Ontario, Canada, has announced plans to serve the US, Canada, Mexico, the Caribbean and areas up to 250 miles offshore with wireless digital data, voice, fax and dispatch radio services using the MSAT" satellite. The first US customers scheduled to receive the service include Skysite Communications Corp., a provider of digital satellite communications services, and CUE Network Corp., which will use the MSAT network to deliver enhanced alphanumeric paging services to its transportation sector customers.