A new market study from Frost & Sullivan reveals that revenues for signal generators amounted to $492.1 million in 2002 and are projected to reach $684.4 million by 2009.
The growth in the market is being driven by increased military budgets, creating new opportunities for signal generator vendors to sell new or refurbished signal sources.
‘The turn of events following September 11 and the ongoing war on terror have resulted in incremental defence spending, spurring demand for signal generators from the defence and aerospace sector,’ said Frost & Sullivan Research Analyst Jaidev Ram Mohan.
Other key end-user markets for signal sources, such as the electronics and communications industries, witnessed shrinking demand due to the unfavourable economic conditions. For instance, network operators that spent millions of dollars on buying spectrum licenses for 3G are now left with limited resources to invest in deploying the new networks and acquiring new equipment.
The study also says that there is a significant surplus of second-hand signal generators available in the market, as a number of end users have liquidated stock due to overcapacity or closure of business. These factors have resulted in escalating competition among vendors of new signal source equipment to secure sales in difficult market conditions.
It adds that established signal source vendors could combat the increasing competition they currently face from the sales of second-hand equipment by offering refurbished products. They can cash in on the fact that customers would potentially prefer to buy less-expensive refurbished test equipment from the original source with a product guarantee and service assurance.