Testing for the wireless revolution

In a communications market that is just now climbing out of a slump, wireless technology presents some attractive challenges for test companies, says Rick Wills, chairman and CEO of Tektronix.

T&MW: What signs do you see of a comeback in communications?

Wills: It's still a mixed picture, but there are some pockets that are doing well. In the last few quarters, our mobile phone business has been fairly strong, in large part because of the various trials going on around the world in 2.5G and 3G technologies. In some cases, our equipment is testing these new technologies used in conjunction with a GSM system or a basic 2G system.

Our video business also has been doing well, particularly in the various incarnations of digital television and mostly outside the US. The one area that is still lagging is optical communications. Overcapacity remains a big problem. Also, optical is being hurt by the growth of Wi-Fi and wireless WANs and LANs. We see new work in research centers around the world on extending wireless into areas as diverse as health care and gaming. So we are pretty bullish over the next few years on wireless. In addition, we've seen a pickup in business for our test equipment used in development of semiconductors, particularly chips targeted for the communications and personal computer markets.

T&MW: What other opportunities are surfacing for test companies in this wireless revolution?

Wills: I see some good opportunities in wireless for security, intelligence, and defense, with the various Homeland Security initiatives. You can also look for an increase in corporate and personal security applications. For example, we have a product called wireless protocol analysis that can trace calls, sometimes through several generations of technology. This is a very tough challenge for instruments. Still another product that is doing well for us is real-time spectrum analysis—the ability to capture single-shot events that are RF related.

T&MW: How is Tektronix helping customers control costs in wireless applications?

Wills: A good example is our new NetTek concept, which helps technicians who have to service complex wireless technologies. We've developed base-station toolboxes, consisting of compact testers that can be reconfigured in either hardware or software—rather than having to drag out 60-lb products that were designed for a lab. These tools are easier to use and are designed to get to the problem faster. They also help keep costs down by replacing many stand-alone instruments.

T&MW: How is Tektronix faring in overseas markets?

Wills: In Japan, where business has been very good, we see demand for our test equipment in new digital television technologies. Another opportunity there is consumer electronics—everything from digital cameras to DVDs. In fact, we are experiencing good activity throughout Asia-Pacific, especially in China, Taiwan, and Korea. Business in this region now surpasses Europe for us. In China, we've seen solid growth from mobile communications, as well as from technology education and research. We've sold thousands of oscilloscopes into the education market, as China beefs up its engineering programs. Many of our customers are increasing their operations in China, so we gain business from supporting them there. In general, our business has shifted over the last couple years to the point where 60% now comes from outside the US.