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Industry News

Commercial Market

October 1, 1999
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Commercial Market

First-half 1999 US Factory Electronics Sales Increase Nine Percent

According to the Electronic Industries Alliance, factory sales of electronics equipment in the US reached $244 B during the first six months of 1999, a nine percent increase over the same period in 1998. The telecommunications sector recorded the most significant growth with sales of $41.6 B, which exceeded sales of $35.3 B in the first half of 1998 by 18 percent. The other related products sector continues to drive the US economy forward with sales of $39.7 B in 1999, a 14.3 percent increase from last year's sales of $34.8 B. The remaining sectors (with the exception of industrial electronics, which dropped four percent) recorded moderate growth. The electronic components sector increased 7.6 percent from $67.4 B in 1998 to $72.5 B this year; the electromedical equipment sector grew 6.5 percent with $6.6 B in sales during the first half of 1999 compared to $6.2 B during the first half of 1998. Computers and peripherals sales increased 5.3 percent to $45.6 B from 1998's $43.3 B, defense communications rose 4.5 percent with $15.6 B in sales in 1999 compared to $15 B in 1998 and consumer electronics posted a 4.1 percent increase in sales to $4.4 B from $4.2 B.

FCC Authorizes Additional Carriers to Provide Air-to-ground Cellular Service

The Federal Communications Commission (FCC) has authorized seven additional cellular service providers to use AirCell Inc.'s unique, patented technology to provide air-to-ground advanced communications to general aircraft and regional airlines. The FCC order permits the cellular providers to offer service based on AirCell's proprietary technology, which re-uses existing cellular network spectrum and infrastructure to provide cellular-like service for airborne aircraft. Pine Belt Cellular Inc., XIT Cellular, ETEX Cellular Co. Inc., WESTEX Telecommunications Inc., Tennessee RSA No. 3 Limited Partnership, North Alabama Cellular LLC and Cellular Network Partnership are the companies included in the order, which brings the number of providers commercially offering AirCell's technology to 14.

A separate FCC order granted AirCell providers additional relief that will facilitate more rapid introduction of nationwide service. The order reduces the frequency notification distance from 270 kilometers (168 miles) to 151 kilometers (94 miles), clarifies the frequency coordination process and increases the number of available channels. AirCell's technology reduces the cost of airborne telephone service and provides access to a suite of advanced communications capabilities, including fax, e-mail and the World Wide Web, at faster speeds and at a fraction of the cost of other airborne phone systems.

Tenfold Growth Forecast for Millimeter-wave Device Market

Allied Business Intelligence Inc. has released a report, "Millimeter-wave '99- Broadband Wireless Automotive Radar Markets, Opportunities and Forecasts," which predicts that total shipments of millimeter-wave devices will grow from 314,000 in 1999 to approximately three million in 2004. Although traditional point-to-point and backhaul applications are expected to represent 90 percent of millimeter-wave device shipments this year, less than five percent of the point-to-point millimeter radios sold are expected to be used to provide access to end users. During the next five years, local multipoint distribution system (LMDS) customer premise equipment is forecast to increase from one to 14 percent of the market share, and LMDS deployments are expected to be primarily point-to-point rather than multipoint.

The demand for broadband millimeter-wave satellite system receivers is expected to account for a major share of the market growth, comprising 43 percent of the millimeter device market by 2004. The automotive radar systems segment, which is expected to account for five percent of millimeter device shipments this year, continues to make strong strides in the trucking industry. Migration of the technology to the mass market is expected within five years and is forecast to account for 21 percent of millimeter-wave shipments in 2004. The total value of millimeter-wave device shipments in 1999 is expected to reach $28.1 M. For additional information, contact Andy Fuertes at Allied Business Intelligence (516) 624-3113 or e-mail: analysts@alliedworld.com.

Enhanced 911 Phase II Network Caller Location System Demonstrated

Rural Cellular Corp. and five participating partners, including CML Technologies, 911 Datamaster Inc., GeoComm Inc., Independent Emergency Services LLC (IES) and KSI Inc., have demonstrated a new technology for 911 service that enables police to automatically pinpoint the location of a wireless telephone user calling 911 for help, thereby speeding response time. Previewed at the 1999 International Association of Public Safety Communications Officials Conference, the Enhanced 911 Phase II network-based system operates without user intervention and is independent of the wireless provider and handset used. The system also employs traditional Public Safety Answering Point equipment and technology and requires the addition of only a limited amount of equipment to 911 dispatch centers. From 1994 to 1998, the number of wireless subscribers nearly tripled from 24 million to 69 million, and close to 36 million emergency calls (an average of 68 calls per minute) were made in 1998. By 2000, when wireless subscribers are expected to number approximately 100 million, 50 million emergency calls are forecast.

Wireless Network to be Installed in 21 African Countries

Alexander Resources International Inc. has entered into an agreement to provide voice, data, Internet and video broadcasting services throughout 21 countries in Africa. Under the terms of the agreement, Alexander is responsible for the installation and operation, including capital investment and ongoing operating costs, of Tele-Trade Centres in the member countries of the Common Market for Eastern and Southern Africa (COMESA). The COMESA region currently has approximately 4.4 million telephone lines, which generate $2.2 B in annual revenues and service more than 380 million people. A great demand for services exists in the region: The official waiting lists in Tanzania and Egypt contain 112,200 and 1,173,600 names, respectively. These figures only include those individuals who have submitted an application, which means the actual waiting list is estimated to be five- or six-times longer. Tele-Trade Centres using very small aperture terminal satellite communications to support voice, data, Internet and video broadcasting services will be installed in the region's rural and urban areas. The major objectives of the network are to improve healthcare, education, employment and the overall quality of life in the region while increasing global connectivity and establishing a backbone for future expansion.

Ericsson to Install TDMA Networks in Argentina

Ericsson has been awarded two contracts with an aggregate value of more than $400 M to supply national wireless networks to two newly licensed 1900 MHz operators in Argentina. Telecom and Telefónica currently operate TDMA 800 MHz networks in northern and southern Argentina, respectively, which were supplied by Ericsson. The new 1900 MHz networks will allow the two operators to support larger volumes of users and provide a platform for personalized services. Equipment deliveries from Ericsson are scheduled to begin in the second half of this year. Full network operation is expected to begin by the second half of 2000.

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