The investment towards higher frequencies and wider modulation bandwidth, coupled with technologies such as 5G, is creating growth opportunities for advanced test equipment, analyst firm Frost & Sullivan said on Monday.
T&M vendors’ main challenge will be in offering superior testing equipment at competitive prices. Top T&M vendors will face challenges from a technical as well as a business standpoint, according to Frost & Sullivan’s Electronic Test and Measurement Market in Research and Development — New Technologies Bring Drastic Change.
Frost & Sullivan says the size of the electronic test equipment market serving design engineers will be $2.36 billion in 2021 from $1.99 billion in 2015.
Electronic test and measurement (T&M) equipment used in research and development (R&D) applications hold nearly 50 percent of the total market revenues, deriving from instruments priced at more than $50,000.
Mobile technologies such as 5G and higher frequencies required in aerospace and defense and automotive radars will translate into a drastic shift in the signal generators, signal analyzers, network analyzers and power meters segments of the electronic test equipment market.
Frost & Sullivan Test and Measurement Industry Director Jessy Cavazos said: “The majority of the revenues for these segments come from frequencies below 6 gigahertz (GHz). In the future, a much higher percentage of revenues will come from frequencies over 26.5 GHz.”
T&M vendors will derive opportunities from the radio frequency (RF), microwave (MW) and high-speed digital test segments. Telecom operators and telecom network makers will be making investment in more signal generators than function generators. Also, there will be more demand for signal analyzers than spectrum analyzers due to their vector capability. In power meters, complex signals will drive peak power meter adoption over average power meters.
The greater than 60 megahertz bandwidth segment will account for significant revenues as new technologies require over 1 GHz of modulation bandwidth. The lack of disruptive technology in the largest segment of oscilloscopes will prove a restraint by making the segment vulnerable to macro-economic trends and customer business cycles over the next 3-5 years.
IHS said the network monitoring equipment revenue, including switches and taps, rose 24 percent to $513 million in 2015.
Main drivers of the network monitoring equipment market were the demand to keep networks secure and reliable. The report released on Monday noted that investment in software-defined networking (SDN) and bare metal switch-based monitoring solutions, which are becoming known for more pervasive monitoring — cost-effectively.
Advanced switches — those with additional packet processing capabilities – accounted for 78 percent of monitoring switch sales.
10G ports are the most common type of monitoring switches. 40G is the new high‑growth market, with port shipments more than doubling in 2015. 100G will take off in 2016, buoyed by 100G deployments in production networks.
The network monitoring equipment market is projected to grow at a five-year (2015–2020) compound annual growth rate (CAGR) of 14 percent. The growth driver will be the need for robust network monitoring capabilities to ensure smooth operations of mission-critical network infrastructure, said IHS.
North America accounts for over two-thirds of total revenue from network monitoring equipment globally in 2015.
Growth in network monitoring equipment market is anticipated to pick up in EMEA (Europe, Middle East, Africa) and Asia Pacific.
APCON, Giagmon, Ixia and NetScout are the four vendors in the networking monitoring space, said IHS on Monday.
ABI Research already said that wireless operators will be increasing their investment in telecom equipments and software in 2016. Investment in testing and network monitoring equipment is becoming a focus area for telecoms to meet demands from both retail and enterprise customers.