Test & Measurement World, July/August 2012

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Market Trends Demand grows in Latin America for general-purpose The total Latin American general purpose test equipment market generated $75.9 million in reve- nue in 2011 and the compound annual growth rate (CAGR) is estimated at 12.6 percent for the forecast period 2012–2018. The continuous upgrade and migra- tion from 2G and 3G to 4G tech- nologies is driving market demand. The deployment of 3G is ongoing in the region, increas- ing the demand for spectrum and network analyzers and simi- lar equipment. LTE has already been deployed in Brazil, Colom- bia, Uruguay, and Puerto Rico. A number of 4G trials and deploy- ments that are expected to gen- erate growth for this market going forward will begin in 2012. This will create a "wireless decade" over the next 10 years. Other factors expected to drive mar- ket growth include the increasing electronics manufacturing and out- sourcing activities in the region, gov- ernment spending on infrastructure, and growing opportunities in the education funding research area and defense sector for some countries. An important trend in the region is the increase in outsourcing opera- tions. The leading telecommunica- tion operators in the region, such as América Móvil and Telefónica, have launched strategies to outsource part of their maintenance activities, generating contracts and opportuni- ties for test equipment vendors. The oscilloscopes market held the largest market share in 2011, fol- lowed by spectrum analyzers, net- work analyzers, and multimeters. test equipment By Mariano Kimbara, Senior Research Analyst, Measurement & Instrumentation, Frost & Sullivan 200 150 100 50 0 174.3 109.0 75.9 these countries by establishing operation centers and sales offices locally. Some of the leading companies apply price increases twice a year; however, the price increases are very conservative. 2011 2014 Year 2018 Note: All figures are rounded. The base year is 2011 Source: Frost & Sullivan analysis Latin America General Purpose Test Equip- ment Market: Revenue, 2011, 2014 and 2018 CAGR: 12.6% The oscilloscope segment is the fast- est growing segment in the Latin American general-purpose test- equipment market. From an end-user perspective, the communications segment held the largest market share in terms of revenue, followed by the aerospace & defense and education segments. There are increasing opportunities in the cellular operators, govern- ment, and broadcast end-user seg- ments. Brazil continued to hold the larg- est market share in the Latin Ameri- can general-purpose test-equip- ment market in 2011, followed by Mexico and Argentina. Beyond Bra- zil and Mexico, countries such as Colombia, Chile, Venezuela, and Peru are expected to boost market revenue growth. Leading test- equipment vendors are focusing on "The challenge is to consoli- date our position in the Latin American market that is increas- ingly focused on price; however, price is not everything in the value proposition," said Diego Parra, Anritsu's Latin America sales director. "Our sales cycle begins by educating the client on our value proposition. The market has begun to require more spe- cialized technical support." From a technological perspec- tive, there is an emerging need for modular and integrated test equipment. "Local test equipment is required to have a greater number of test instruments within a single box. More and more, manufacturers of traditional box instrumentation are migrating or starting to increase modular instruments in their product portfolio and it is definitely having an impact in Latin America," said Gustavo Valdes, National Instru- ments' strategic marketing manager for Latin America. Overall, economics are improving in the region and most of the local governments are willing to invest in education, which is anticipated to generate sustained demand for general-purpose test equipment. The Latin American region is keen on catching up with new technol- ogy, which augurs well for test and measurement companies. Test & Measurement World | JULY/AUGUST 2012 | –13– Revenue ($milllions)

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