In a webcast titled “Checking the Pulse of the Global Oscilloscope Market,” Jessy Cavazos, industry director for test and measurement at Frost & Sullivan, surveyed trends, major drivers and restraints, growth prospects, bandwidth and resolution perspectives, and the competitive landscape.
Megatrends, she said, include connectivity and convergence, with high performance consumer and other products requiring high-performance oscilloscopes. Hyperconnectivity is also a key driver, she said, with M2M connections expected to reach 70 million in the U.S. by 2018.
Another trend relates to what Frost calls “bricks and clicks”—by 2020 in the U.S., online sales will represent 25% of retail sales, and customers increasingly want to purchase their mainstream test equipment online. Other trends that Cavazos covered relate to what Frost terms “smart as the new green” and “beyond BRIC—the next game changers.” In addition, she said, customers want their oscilloscopes to have consumer-electronics-like features. In addition, she noted that R&D is growing fast in developing countries as multinationals bring design as well as manufacturing close to end customers. Brazil, she noted as an example, mandates local production.
Key oscilloscope drivers, she said, include the growing number and intelligence of electronic devices, which will have a strong effect on the scope market over the next 10 years. Increasing bandwidth will have a medium-strength effect over the next two years and a strong effect three to 10 years out. Continued improvements in the user interface and integration of other capabilities within scopes will be a medium-strength driver over the next two years and a strong driver three to 10 years out. Modular instruments account for only a small portion of the oscilloscope market, she said, and will be a medium-strength driver three to 10 years out.
The greater complexity of electronic devices results in the greater complexity of the signals to be analyzed,” said Cavazos, noting that fast serial and parallel buses are proliferating in a variety of products—including consumer devices, computers, and embedded systems. USB, PCI Express, Thunderbolt, SATA, and SAS are examples of some sources of high-speed signals, as are DDR and LPDDR interfaces. The need to observe such signals drives the need for new oscilloscope capabilities.
Cavazos noted that as real-time oscilloscope bandwidths extend to 65 GHz and with 100 GHz in sight, real-time oscilloscopes can serve applications that once required spectrum analyzers or, in the case of optical communications, sampling oscilloscopes.
Despite the key drivers Cavazos cited, she said it's not all smooth sailing for scope market. Economic uncertainty is a key restraint, she said, as is competition in the 1- to 2-GHz segment, which is overserved. She noted that there is competition among the top 3—Agilent Technologies, Tektronix, and Teledyne LeCroy—as well as from low-end competitors. In addition, customers are looking to future-proof their instruments—pursuing upgrade strategies rather than replacement. She did note that some customers have a misconception of bandwidth, suggesting that they may need to upgrade or replace their existing instruments sooner than expected. Finally, she noted that all potential oscilloscope purchasers need strong justifications to present to management for capital expenses.
Cavazos noted that the total oscilloscope market is valued at $1.11 billion in 2012, with the Asia Pacific region representing largest share of total market revenue. The 2012 figure represents a decline of 12.4% from previous year, after two gangbuster years of growth. The second half of 2013 is seeing a recovery, and growth should accelerate in 2014. Frost & Sullivan forecasts the market reaching 1.8 billion by 2019, representing a 7.2% CAGR.
Cavazos provided additional details on oscilloscope markets in various regions and countries. As for technical issues, she cited resolution as well as bandwidth—resolution, she said, can help designers contend with signal-integrity issues, and she discussed several ways of achieving higher resolution.
High-bandwidth scopes, she noted, do not represent the bulk of revenues, which come from sales of instruments with bandwidths below 1 GHz.
She also discussed the competitive situation, mentioning Agilent, Tektronix, Teledyne LeCroy, Rigol, Yokogawa, and Rohde & Schwarz. She said Agilent and Teledyne LeCroy have favorable growth prospects and added that Rohde & Schwarz has made a serious dent in the 1- to 6-GHz segment.
She concluded by noting that product innovation has fueled market-share growth for several players over the past two to three years and asked, “Are these OEMs willing and able to maintain such focus?”
The webcast took place October 16 and is available on demand here.