Over the past few years, the test and measurement (T&M) market has slowly but steadily worked toward rebuilding itself and is now projected to grow markedly, due in no small part to emerging application areas in communication.

Recent analysis from Frost & Sullivan shows that the test and measurement (T&M) market earned revenues of US$1.77 billion last year, and estimates this “to reach US$2.33 billion in 2013,” or about 6 percent growth per year.

Forecasting firm Global Industry Analysts, Inc. (GIA) offers an even more optimistic outlook (via AutoTestNews.com). Its report “says that the market for electronic test and measurement instruments will reach 4.0 million units generating sales worth US$4.5 billion in 2010.”

And Altera, a supplier of custom logic solutions to the electronics industry, has estimated the compound annual growth rate at 5 percent over a five-year period.

“Despite the slump in the communications industry in 2001 and 2002, it continues to drive the general purpose test and measurement market as reflected not only in terms of revenue growth, but also in terms of the technology being used,” Frost & Sullivan research analyst Vijay Mathew said in an announcement of the World General Purpose Test and Measurement Equipment Market report.

“In 2003, the industry made a turnaround, marked by the recovery of its end-user industries. Since then, the general-purpose test and measurement industry has slowly but steadily worked toward rebuilding itself,” Frost & Sullivan noted. “Growth of the telecommunications sector will likely contribute greatly to the growth of this market.”

The limited growth may be due to “end users [who] expect more for the same price,” which pressures test vendors “to deploy equipment with increased functionalities at lower prices.”

“Test equipment vendors are under constant pressure to keep pace with the latest technology innovations, and it has become necessary to implement multiple standards at the same time which can increase costs and reduce profit margins,” Mathew explained in the Frost & Sullivan announcement.

“Future demand for electronic test and measurement instruments is expected to stem from new emerging application areas in communication, such as satellite-based personal networks, home automation networks, wireless local area networks (WLANs) and wireless Internet,” according to GIA.

Manufacturers are increasingly relying on wireless LANs. According to 2005 editorial by Computers and Industrial Engineering, “the overall market for [WLANs] grew more than 200 percent from 2000 to 2002,” predicting continued growth at a compound annual growth rate of 23 percent until 2007.

Now, in 2007, Gartner expects spending on Wi-Fi technology equipment to grow at a compound rate of 17.3 percent worldwide and to hit US$3.1 billion in 2011 — “slightly less than the 20 percent clip it grew at in 2005-2006,” according to a recent report from the research firm (via NetworkWorld Canada).

“New broadband wireless technologies including WiMax will keep spending on enterprise wireless LAN equipment in double digits over the next five years,” according to the Gartner study. “The pace will be driven by sales in Asian markets, which are just getting into wireless.”

According to GIA, the United States represents “the single largest electronic test and measurement instruments market through 2001-2010,” as it goes on to report:

Sales in the U.S. are projected to reach 1.4 million units equivalent to US$1.4 billion by 2010. Asia-Pacific, the fastest-growing market, is projected to exhibit a CAGR of 2.8 percent over the forecast period.

While business and personal electronics sectors account for the lion’s share of influence on the T&M markets, manufacturers (including those in automotive and, to a lesser extent, the food industry) also rely on such devices.

Resources

Growth in Communication Sector Will Boost Revenue Potential for Test and Measurement Equipment Market
Frost & Sullivan, July 31, 2007

World General Purpose Test and Measurement Equipment Market
Frost & Sullivan, Jan. 22, 2007

Test & Measurement
Altera.com

Electronic Test & Measurement Market to Reach $4.5 billion by 2010
by Dan Romanchik
AutoTestNews.com, July 11, 2007

WLAN spending to average 17 per cent annually
by Howard Solomon
NetworkWorld Canada, Aug. 15, 2007

Performance evaluation of heterogeneous wireless local area networks
by J. D. Porter, D. S. Kim and K. Paotrakool
Computers and Industrial Engineering, March 2005