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Industry News

Commercial Market

May 1, 2001
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Sharp Rise in Growth of Millimeter-wave Market Forecast for the Next Five Years


A report from Allied Business Intelligence, "Millimeter-wave: Broadband, Automotive Radar and Semiconductors," forecasts that the market for millimeter-wave and other high frequency applications will grow from $3.5 B in 2000 to $12.4 B in 2005, a compound annual average growth rate of 29 percent . It expects that the growth will be driven principally by the needs of broadband applications assisted by the significant growth of automotive applications.

With a traditional base in backhaul applications, the market will benefit from new requirements for local multipoint distribution systems (LMDS), automobile collision warning and broadband satellite systems. LMDS is expected to play a key role in market growth during the early portion of the five-year period. While accounting for 9 percent of the 2000 market, its share in 2005 is forecast to be 30 percent. Broadband geosynchronous satellites employing millimeter-wave systems planned for deployment as early as 2002 promise to bring broadband coverage to all parts of the world. These are expected to lead to the sale of more than 2 million broadband ground terminals in 2005.

The report notes that automotive collision avoidance systems continue to be widely deployed by the trucking industry. At the present time, cost appears to be the only important barrier to widespread installation in passenger vehicles. Concerted efforts to reduce system costs are expected to lead to the installation of close to one million passenger vehicle systems in 2005 and continued vigorous growth thereafter.

Since the growth in all market segments will require ever-larger quantities of GaAs semiconductors, improvements in their packaging and cost/performance ratios are needed to meet the higher demands. The report expects that this challenge will be met and that the market for millimeter-wave GaAs ICs will exceed $200 M in 2005. For additional information, contact: Allied Business Intelligence, 516-624-3113.

Worldwide Cellular Handset Semiconductor Market to Exceed $38 B in 2004


According to a recent report from IDC, "Digital Cellular/PCS Semiconductor Market Review and Forecast, 1999­2004," worldwide digital handset semiconductor revenues will increase at a compound annual growth rate (CAGR) of 18 percent from approximately $17 B in 1999 to over $38 B in 2004. Handset shipments during the period are expected to grow at a CAGR of 24.4 percent during this period and reach over 780 million units in 2004.

Semiconductors for second-generation handsets are expected to account for a large portion of the market throughout the forecast period. Third-generation handsets are forecast to have increased impact beyond 2003 as new features require more logic and memory to support higher bandwidth and multimedia computing.

According to the report, the global system for mobile communications (GSM) cellular application now accounts for more than half of all chip revenues because of its large installed base of users, particularly in Europe and Asia. After 2002, however, GSM growth is expected to slow as CDMA, TDMA and 3G systems increase their market shares. By 2004, 2G CDMA and TDMA are forecast to account for over 43 percent of the total market. 3G handsets, most to CDMA2000 and W-CDMA standards, will also be a factor in the market as voice and data-enabled cellular systems converge.

Despite recent economic slowdowns and some inventory problems, the report authors believe that there are current attractive opportunities in the cellular market for semiconductor suppliers. The upcoming year is expected to witness a major transition in the cellular handset market as technologies move strongly away from "voice-only" applications. The resulting emphasis on next-generation handsets is forecast to bring dramatic changes to the market and competitive situations as they exist today. For additional information, contact: Michael Nguyen, IDC (650) 962-6215 or Pennie Edgren, IDC (508) 988-6912.

Multi-tenant Buildings Could Be Very Active Broadband Market


A recent study from Cahners In-Stat Group, "Shakedown: Transition in MTU Broadband," finds multi-tenant unit (MTU) buildings including apartment houses, office complexes, hotels and public buildings to be excellent opportunities for broadband service providers and equipment suppliers. According to the study, MTU broadband service and equipment sales will rise from $3.4 B in 2000 to $8.5 B in 2005.

The report notes that a number of niche suppliers have served the market thus far and that it is beginning to receive attention from AT&T, Sprint, Qwest and Verizon. Equipment suppliers have responded to the increased interest by offering new products aimed at MTU applications. Service providers roll out broadband to MTUs by establishing mini points of presence (mini-POPs).

The report forecasts a growth in MTU-related equipment sales from $500 M in 2001 to $4 B in 2005. It notes the tendency of providers to choose vendors based on the particular services offered because many vendors appear to specialize in one or two MTU market segments. Service providers also offer remote and on-site network management and cable installation services. For additional information, contact: Courtney McEuen, Cahners In-Stat Group, (480) 609-4533.

Wireless Communications Airships Demonstrated


The Airborne Relay Communications System (ARC System) employing a floating balloon whose underbelly bulge held nearly 1500 pounds of antennas and communications hardware had its first commercial demonstration in San Diego. The system, developed by Platforms Wireless International, demonstrated the capability of handling up to 500,000 cellular subscribers while supporting all of the popular wireless protocols, TDMA, CDMA and GSM.

The ARC System is housed in a 150-foot long "Zeppelin-like" airship tethered to a fixed ground control station. The airships, "Aerostats," originated as platforms for low level radars for defense applications. At 15,000 feet, the ARC System affords cellular coverage over an area approximately 140 miles in diameter. The system is particularly suited to rural areas where it may be a cost-effective alternative to satellite or multiple fixed ground station systems. It may also be attractive as a means of adding temporary capacity to systems in areas hosting major events taking place over the course of a week or more. First commercial orders are anticipated this year.

Mobile Commerce Market to Reach $230 B by 2006


A study by Strategy Analytics as part of its strategic advisory service, Wireless Internet Applications, forecasts that the rise in demand for mobile commerce services will lead to a market value for those services of $230 B in 2006. The number of mobile commerce transactions is expect to reach 26 billion per year by 2006 as technology enabling SIM ToolKit, WAP, dual-slot handsets and improvements in wireless device interfaces is introduced.

The study expects that mobile prepaid account recharging, electronic ticketing and vending/parking machine payment will lead the list of successful mobile commerce applications during the next five years. In the longer term, the use of wireless services for on-line shopping and paying for various goods and services will also be important applications.

The study forecasts mobile commerce users, transaction volumes and values and revenues for network operators from 2000-2006, and analyzes recent mobile commerce developments. For additional information, contact: David Kerr, Strategy Analytics Inc. (262) 646-8974 or Nitesh Patel +44152 405678. *

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