The Commercial Market
US Electronics Sales Grow Nearly Nine Percent
The Electronic Industries Association reports that US factory sales of electronics equipment, components and related products totaled nearly $219 B during the first half of 1997, a nine percent increase over the $200 B earned during the first half of 1996. The report confirmed that the electronics industry is sharing actively in the growth and productivity gains enjoyed by the US economy as a whole.
The sector comprising other related products and services recorded the strongest gain (16 percent) with 1997 first-half sales of $35.4 B compared to $30.4 B earned in the first half of last year. In second position, the telecommunications sector checked in with a 14 percent increase over 1996 first-half sales, reporting 1997 sales of $29.7 B compared to $26.2 B in 1996.
Electronic components registered the third-highest gain during the six-month period with 1997 first-half sales of $70.5 B, a nine percent increase over 1996 sales of $64.6 B. Following closely were consumer electronics with an eight percent sales increase and electromedical equipment with a seven percent sales increase. For the first time in many reporting periods, the defense communications sector displayed solid growth with 1997 first-half sales of $14.1 B, a six percent increase over the $13.3 B reported for the first half of 1996. Industrial electronics reported a four percent increase over first-half 1996 sales with earnings of $16.8 B.
Field Trials to Test Communications over Cable and MDS
Separate field trials are testing the feasibility of voice and data communications over coaxial and fiber cable systems and wireless cable multipoint distribution systems (MDS). The trials are being conducted in an effort to provide coverage for areas not served currently by existing tower-based personal communications service (PCS) code-division multiple access (CDMA) networks.
Sanders, a Lockheed Martin company, has completed an 11-week field trial of its PCS-over-cable and PCS-over-fiber systems in Pittsburgh, PA. The hilly terrain in the area, which is prone to dead spots in its cellular coverage, was selected specifically to test the capabilities of the systems. The trial involved the deployment of a small number of cable microcell integrators (CMI) into the network installed on a local cable provider’s hybrid fiber-coax community antenna television network. The test’s tower macrocell consisted of a Sanders fiber remote RF head mounted on a 100-foot tower. Handoffs between the macrocell and the CMIs were handled by a Sanders base station.
A trial of two-way digital voice and data traffic over the 2.5 GHz MDS spectrum is scheduled to be conducted by CFW Communications Co. and American Telecasting Inc. later this year in Waynesboro, VA. The trial will test the application of CDMA technology to delivery of fixed point-to-point digital voice and data signals within the MDS spectrum. In addition, the trial will evaluate the voice quality and signal-propagation characteristics of CDMA equipment in the MDS environment, the application of extensive sectorization (a number of directional antennas designed to provide frequency reuse from a single transmitting site) and the increase in spectral efficiency expected from the high gain antennas and fixed-base architecture of the MDS. If realized, the spectral efficiency will increase system capacity significantly for a single cell or limited number of cells.
Survey Tracks Electronic Media Product Usage Trends
In its recent report, “1996 Home Media Consumer Survey: Residential Telecommunications,” International Data Corp. (IDC)/LINK analyzes 2539 responses from US households and determines ownership and usage of a wide variety of electronic media products. The survey provides data on purchase and usage patterns, intent and attitudes, and a cross-ownership analysis of various new electronic media products and telecommunications services.
The survey found that fax machines were present in 12 percent of households, a three percent increase over 1995 results. VCRs were present in 87 percent of the households and video camera ownership has grown modestly to 28 percent. PCs were found in 37 percent of households surveyed in 1996, a two percent increase over the 1995 figure. More than 30 percent of households have one or more cellular phones, while answering machine usage has declined to 67 percent from 69 percent the previous year.
Overall use of telephone/messaging services has increased from seven percent in 1995 to 11 percent in 1996. However, while 20 percent of respondents indicated an interest in purchasing an answering machine, only five percent were interested in voice messaging services. Nineteen percent of households have two or more telephone lines, up two percent from 1995. Business (30 percent) and child usage (23 percent) were the most common reported need for a second line. Second-line usage for computer/data use rose to 15 percent from 11 percent last year.
Forty-two percent of respondents believe that future delivery of information and entertainment will be via PCs. Approximately 71 percent of US households are aware of online services, up nine percent from last year. Approximately 54 percent of respondents are interested in using a videophone, which allows callers to view each other in full-motion video, and 57 percent are interested in an advanced telephone with a video display that acts as a telephone and affords access to information services. For additional information, contact IDC, 5 Speen St., Framingham, MA 01701 (508) 872-8200.
Report Highlights New Asia-Pacific Telecommunications Operators
The International Telecommunications Union (ITU) has issued a report charting the creation and spread of new public telecommunications operators in the Asia-Pacific region. Approximately 80 new operators have been established in that area during the past 10 years.
The report evaluates the rise, growth and business strategies of the new operators and provides information on who these new operators are. In addition, the report describes the operators’ impact on the national and international markets they have entered, and evaluates their performance and the regulatory challenges they have raised.
The report notes that the telephone line growth rate in the Asia-Pacific region has surpassed growth recorded in any other region since 1990. Despite that growth, the telephone line density in the Asia-Pacific developing countries is still well below the number of lines in the Arab States and Latin America. As a result, local governments are turning to private capital to increase the rate of local telephone network construction.
Reflecting the shortage of wired infrastructure, the number of cellular subscribers increased by 84 percent in 1996 compared to a growth of 14 percent in fixed-line subscribers. The number of Asia-Pacific cellular subscribers has increased by 40 million since 1990 and the region now accounts for one-third of the global total. Seventeen of the 38 main economies in the area permit cellular service competition and there were 113 suppliers in mid-1997 compared to 50 in 1992. While international traffic is potentially the most lucrative market, opportunities to enter this market have been limited. Most governments have not licensed new international operators since the early 1990s.
The presence of the new telecommunications companies in the region has improved the availability and diversity of services and, by reducing the cost of service, has sharply increased demand. By entering these markets, the new operators have also made it necessary to re-examine the traditional business model for the region, which has relied on subsidies from monopoly operator profits to expand service. For additional information, contact the ITU sales office, Place des Nations, CH-1211, Geneva, Switzerland +41 22 730 6039, fax +41 22 730 5939.