Oscilloscope market on the way to recovery

It is expected that the pent-up demand for oscilloscopes will accelerate the recovery due to an increase in consumer budgets.

Prathima Bommakanti, Senior Research, Analyst Measurement & Instrumentation Practice -- Test & Measurement World, 10/1/2010 12:00:00 AM

Because of the economic slowdown in 2009, the oscilloscope market has undergone significant changes in terms of product development, pricing, positioning, and distribution. As users increasingly focus on cutting costs, the key purchase criterion for oscilloscopes has shifted to the lower total cost of ownership.

Mid-performance oscilloscopes held 40% of the world oscilloscope market in 2009.  To read past "Market Trends" columns, go to www.tmworld.com/markettrends.

Oscilloscopes are one of the most commonly used types of general-purpose test equipment, so demand for these products tends to flatten out over a period of time owing to consistent supply, a flat technology innovation curve, and the presence of intense supply-side competition. The oscilloscope market as a whole is mature, although certain segments such as medium and high-end oscilloscopes are expected to display above-average growth.

It is expected that the pent-up demand for oscilloscopes, caused by customers postponing purchasing decisions because of the uncertain economic climate, will accelerate the recovery due to an increase in consumer budgets. It is likely that the oscilloscope market will recover in the next two years.

There has been constant demand for mixed-signal oscilloscopes—particularly in the automotive sector—since the introduction of several models in 2007. The communications industry, with its increase in bandwidth requirements and the constant evolution of communication standards, continues to drive demand for technological advances in the oscilloscope market. As the communication industry is considered among the industries largely spared by the recession, there was significant demand from this space in 2009.

With the increasing complexity of oscilloscopes, manufacturers are bundling additional services and support, such as warranty, installation, technical support, maintenance, and general service agreements, in their oscilloscope packages. This bundling enables manufacturers to differentiate their products and charge premium pricing. Moreover, such services lead to increased customer satisfaction, thereby enhancing the relationship between the manufacturer and customer.

Along with the economic recovery, recent product introductions by Agilent Technologies (Infiniium 86100D and Infiniium 9000X), LeCroy (WaveMaster 830Zi and MSO Xs-A), and Tektronix (MSO70000) are anticipated to have a positive impact on the market in the short term. Rohde & Schwarz also entered the oscilloscope market this year with its RTO and RTM models that target the medium bandwidth range (500 MHz to 2 GHz). With strong brand recognition especially in Europe, Rohde & Schwarz is expected to grab significant market share in the coming years.

With increasing competition in the marketplace and the commoditization of oscilloscopes, differentiating factors in the product, marketing activities, or support functions are likely to help sustain a profitable, value-driven venture in the oscilloscope market.

Intel, AMD competitive struggle continues in microprocessor arena Despite extended licensing agreements and the callings of truces in legal battles, the competition between Intel and AMD is as hot as ever, according to a report from iSuppli. The market research company pointed to recent Q2 microprocessor data on the rivals and their continuing battle for market share. The two chip competitors in Q2 generally maintained their market share positions in the global microprocessor business amid fast industry growth, iSuppli said. Intel secured 80.4% of Q2 global microprocessor revenue, down slightly from 80.7% in Q2 2009 when the company's share reached a four-year high. On a sequential basis, Intel gained 0.1 points of share from the 80.3% it held in Q1. Meanwhile, AMD's share amounted to 11.52% in Q2, up 0.04 points from 11.48% in Q2 2009. On a sequential basis, AMD saw its share decline by 0.2 points from the 11.72% of share it held in Q1. According to iSuppli, global microprocessor revenue in Q2 was up 34% from the same period in 2009. The market research company said that the annual increase reflects the PC market's "dramatic recovery from the dismal conditions" of Q2 2009, when global PC shipments declined by 4.3% compared to a year earlier. PC shipments in Q2 2010 increased by 22.8% on a year-over-year basis. Suzanne Deffree, Managing Editor, News, EDN