Can you tell us how R&S got started in the US market including your initial partnership with Tektronix?
Rohde & Schwarz set up their US Subsidiary in 1978, but the real revenue growth came as a result of a distribution alliance with Tektronix beginning in 1993 for R&S Test and Measurement products. This alliance was in effect for 10 years, and in 2004 R&S and Tek ended the relationship amicably. Since that time, R&S has invested heavily in growing the sales and service resources in the US and Canada not only for Test and Measurement, but in the other business fields including radio monitoring, radio location, secure communications and broadcasting & media.
As a privately held company, do you find that you have advantages over public companies that have to report quarterly?
Most definitely. Because we are not only a private company but a company owned exclusively by descendants of the two founders of the firm back in 1933, we have a very long term view of strategic planning and particularly R&D investment, where we can take the right time needed for technical innovation to happen. All too often public companies need to dial in strategy shifts based on the needs and desires of a dynamic shareholder base, and this does not always align with the time and development investments needed to create solutions that properly solve customer requirements.
R&S is known for heavily investing in R&D, how has that helped the company be more successful?
We invest a much larger percentage of revenues in R&D than most of our industry competitors. Besides having the time to do things correctly, we have the ability to leverage these R&D investments across all of our business fields. Rohde & Schwarz is mostly all about receiving, measuring, analyzing, generating and transmitting wireless signals. ASICs or core subsystem technologies developed for one business unit can be freely utilized by others. This allows us to bring some incredible technical innovations to product areas that help solve customer problems.
R&S has not embraced open-architecture modular test systems (PXI, LXI) like most other companies in the market – what is the reason for that?
Our primary objective is always to solve problems for our customers. If customers tell us that a particular form factor is important, of course we listen. But – customers usually express their current and emerging requirements in terms of measurement speeds, accuracy, physical space requirements and mostly coverage of emerging measurement requirements. The products we offer that service these customers not only address those requirements, but usually offer an upgrade path to emerging measurement needs as well. We’re really platform or form factor neutral. All of our products have good LabView driver support, and work in harmony with PXI and LXI systems.
If the modular market continues to grow, will R&S participate in the market with alternative products?
We are already in the market with excellent products that support these production and device characterization requirements where modular systems are usually found. For example, the R&S®FPS is an exceptionally fast and compact signal and 2U spectrum analyzer for performance oriented users. Our R&S®SGT100A is an RF vector signal generator with an integrated baseband generator. It also is a 1U height half-rack width unit and has been optimized for use in production and automated applications. Both have excellent LabView driver support as well.
There has also been growth in low cost PC driven instruments, has that affected your market and product development efforts?
R&S has been expanding its efforts in the lower cost “value” or bench space over the past few years. We expect this to be a major growth vector for us in the future. Our R&S®RTM and R&S®RTE series oscilloscopes are great examples of products which address this segment of the market, along with a variety of handheld instruments and general purpose bench instruments including power supplies, signal generators, scopes, DMM’s, function generators, etc.
R&S first introduced oscilloscopes in 2010, how has the market responded and how are these products doing today?
We’re happy with where we are with our scope products, and the most exciting part is the fact that the customers we are talking to traditionally were not R&S RF and wireless customers. The scopes have lead us into a variety of general electronic design segments, and this provides a path for our spectrum analyzers, network analyzers, signal generators and other products to these customers – particularly for customers focusing on adapting their products or services for the connected “internet of things” trend.
Your service and support is well-known in the industry, how have you been able to maintain this over the years with support of much older equipment than other companies typically provide?
Again, being a long-term focused family-owned company allows us the freedom to do things that serve our customers best. For technical support we have the highest ratio of applications engineers to sales engineers in the industry – critical to help customers utilize the products they’ve purchased. For service, we maintain a much larger stock of replacement parts in our Columbia Maryland North American Service Center, and we’re proud to be able to continue to support just about every product we’ve sold in the US and Canada since the start of the 1993 distribution alliance with Tektronix. 97% of our products sold in North America are serviced here, and our long term support policies are best in class. We’re averaging 17 years on spectrum analyzers and 16 years on signal generators for example. But most important for our customers, we achieve 85% of incoming jobs are turned around in 5 days, and 95% in 10 days. 97% of calibrations are turned around in 5 days.
What are your major growth markets for the next couple of years?
We’re excited about a variety of markets we serve. Of course, being the #1 player in wireless radio-communications test will continue to be critical with customers moving to embrace LTE Advanced, 5G and the “Internet of Things” trends. We expect to continue to play a dominant role here. But, we’re very excited by the aerospace and defense market, not only for test and measurement products, but in our radio monitoring, radio location and secure communications business fields as well. We see a general broadening of our customer base in test and measurement driven by exposure to a wider variety of customers in the computer, semiconductor, industrial, automotive and education markets driven by our expansion into new product categories such as oscilloscopes.
How do you see R&S contributing to the 5G and IoT growth expected?
Well, as I mentioned before, the Rohde & Schwarz brand name is synonymous with broad support of all digital mobile radio standards since the dawn of 2G in the early 90’s. We play a dominant role with LTE and LTE Advanced across the entire food chain of the mobile-wireless market, from chipset developers, to device and infrastructure manufacturers, through network operators and the service and repair players. 5G is the next wave, and we’ve been excited to be part of these early stages of its inception and development. The “internet of things” is just another opportunity to provide our customers with the expertise, technology, and support that they need to succeed. Overall, we’re well positioned to assist our customers in their development efforts.