The Commercial Market

Third-quarter US Electronic Sales Rise 11.6 Percent
The Electronics Industry Association (EIA) reports that US factory sales of electronics equipment, components and related products amounted to more than $336 B through the third quarter of 1997, rising more than 11 percent over sales for the same period last year. The largest sales increase for the period was recorded by the telecommunications sector with 1997 shipments of $46.2 B, compared to 1996 sales of $39.9 B, a 15.7 percent increase. The other related products sector came in second with 1997 shipments of $52.9 B, a gain of 14.5 percent over the 1996 total of $46.2 B.

Electronic components, the largest gross sales sector, recorded shipments totaling $108.8 B during the first nine months of 1997, up 12.7 percent from $96.6 B recorded in the same period of 1996. The defense communications sector continues to recover from that shrinking market with nine-month 1997 shipments of $21.7 B, a healthy 9.5 percent ahead of the sector's 1996 sales of $19.8 B. All other sectors enjoyed real growth ranging from 6.3 percent for consumer electronics to 8.7 percent for computers and peripherals.

Transportation Technology Market to Grow to $14 B by 2002
A recent study entitled "RDIV-96 Advanced Transportation Industry Review," conducted by Business Communications Company Inc., forecasts that total US expenditures for intelligent transportation systems (ITS) for consumer, commercial and public applications will grow from the 1997 value of $2.9 B to $14 B in 2002, a compound annual growth rate (CAGR) of 37 percent. The development of public/private infrastructure-like electronic payment systems (Smart Cards), including advanced traveler information systems and electronic toll collection (which support in-vehicle systems), obviously will affect the in-vehicle equipment markets.

However, given the rate at which that development is proceeding, the study estimates that the consumer market (comprising in-vehicle, information and services systems), which was valued at $600 M in 1997, will increase to $7.5 B in 2002, a CAGR of 65 percent. The commercial portion (comprising vehicle and fleet system applications) is forecast to grow at a CAGR of 68 percent from $200 M in 1997 to $4 B in 2002.

Public agencies are expected to budget large amounts for ITS projects during the next five years to develop and install technologies to address traffic, transit, safety and congestion issues, which are expected to concern the nation well beyond the forecast period. The 1997 market for these projects already is at $1.8 B, well above the consumer and commercial equipment segments, and is forecast to grow at only a 4.1 percent CAGR to $2.4 B by 2002.

The study also looks at the programs in force outside the US that will add to the total market. Electronic toll collection systems are operating in countries as diverse as Singapore and Serbia and in cities like Rome and Rio, and in-vehicle navigation systems are now offered as options by German, Japanese and British auto makers. For additional information, contact Business Communications Company Inc. at (203) 853-4266.

Solutions to Data and Voice Communications Requirements Examined
A recent Allied Business Intelligence report ("Wireless Enterprise Communications: Wireless LANs, Bridges and Cordless PBX Adjuncts") examines the solutions to data and voice communications requirements within an enterprise. Normally confined to the enterprise itself, these systems can be extended with RF links, or by incorporating wired networks or telecom infrastructure.

The report suggests that businesses are motivated to adopt wireless enterprise systems due to the need for mobility, real-time information and improvements in the efficiency of all communications to reduce operating and administrative costs. It also suggests that the benefits are indirect and difficult to measure. Questions raised include: what are the benefits of having voice and data wireless communications if mobile workers who are frequently away from their desks are able to answer 90 percent of their telephone calls by carrying cordless handsets instead of the 20 to 30 percent that may otherwise go answered; and what are the benefits of an inventory report reflecting today's numbers instead of yesterday's?

Part I of the report examines wireless local area networks (LAN) and bridges that comply with the IEEE 802.11 standard, which, along with other industry initiatives, permit the purchase of wireless LAN components on the basis of function without the confusion of a variety of proprietary design restraints. According to the study, as vertical applications expand along with the technology's inclusion into office applications, the wireless LAN market will increase to $2 to $3 B during the next 10 years.

Part II of the study covers cordless private branch exchange (PBX) systems. The report suggests that the range of proprietary designs available have inhibited market growth. The introduction of unlicensed personal communications service frequencies for in-building use is expected to standardize the market and move it toward a digital future. Cordless PBX system sales are forecast to reach $3 B in the early part of the next decade. For additional information, contact Allied Business Intelligence at (516) 624-3113.

Motorola Adds $1 B to Satellite Telephone Network Investments
As reported in Newsbytes, Motorola, a major investor in the Iridium low earth orbit (LEO) satellite telephone system, has added to its satellite telephone investment with the award of a $1 B contract to Matra Marconi Space for Celestri, another LEO satellite telephone network. Iridium, a 66-LEO constellation due to begin service in September, has a reported cost of more than $10 B. The contract with Matra Marconi calls for the design and construction of 70 LEO satellites and one geostationary satellite. As part of the agreement, Matra Marconi will invest in the Celestri project, which is expected to cost $12.9 B. Motorola expects to launch the network as a separate company in the near future.

While Iridium is a voice, fax and data narrowband satellite telephone system, Celestri plans to offer broadband mobile services such as videoconferencing, interactive television and Internet services. These capabilities enable the network to compete directly with Microsoft's Teledesic project and the Alcatel Alsthom Skybridge operation.

The Celestri LEO constellation will provide direct multimedia and real-time interactive services (such as desk-top videoconferencing) and will interwork with geostationary satellites for broadcast and multicast services for news and entertainment, as well as for hybrid broadband services such as interactive television, software distribution and electronic books. The system is expected to begin service in 2003.

Satellite Communications Available for Small Boats
COMSAT Mobile Communications has announced the availability of its Planet 1™ service for a large new segment of the maritime community. The smaller antennas used in the service make it practical for small boat applications and bring voice, fax and data communications facilities to boats of all sizes using one terminal. The service is offered with a Smart Card feature, which protects the security of users' personal telephone books, billing information and security codes. The Planet 1 prepaid service offers cards providing 50, 150 or 500 minutes of prepaid time for users preferring to pay in advance. For additional information, contact COMSAT Mobile Communications at (301) 214-3100.