Challenges and opportunities ahead for metro test vendors, say analysts

13 August 2003 Palo Alto, CA Lightwave -- The worldwide metro test equipment market generated revenues worth $565.8 million in 2002 and is likely to reach $836.4 million by 2009, according to a new report from market researcher Frost & Sullivan.

13 August 2003 Palo Alto, CA Lightwave -- The worldwide metro test equipment market generated revenues worth $565.8 million in 2002 and is likely to reach $836.4 million by 2009, according to a new report from market researcher Frost & Sullivan.

Today's metro test equipment vendors are challenged by the need to develop new testing solutions for continuously evolving metro networks. The significance of data transmission in the MAN is increasing and the current network infrastructure needs to transmit data traffic more efficiently, which has led to the emergence of an array of new network technologies, including Gigabit Ethernet (GbE), next-generation SONET, and Coarse WDM (CWDM).

"It is expected that many of these technologies will co-exist during the next few years before one actually takes over," says Frost & Sullivan research analyst Jessy Cavazos. "MAN test equipment vendors need to assess the potential of each network technology that is under research to decide on the development of appropriate testing solutions."

With the onset of the economic recession in 2001, end users curbed their capital and operational expenditures. Many end-user companies have filed for bankruptcy, which has reduced the pool of potential customers for the test equipment community. This, in turn, has increasing competition among test vendors, forcing them to cut prices despite shrinking profits.

Due to difficult market conditions, top management increasingly makes the purchase decisions in end-user organizations. Test equipment vendors, therefore, need to convince end-users of the return on investment to close sales.

Additionally, end-users have modified their demands in regards to test equipment features and capabilities. In the manufacturing sector, for example, they require flexible testing equipment for use across several production lines.

"Going forward, vendors that provide comprehensive, flexible, and upgradable testing solutions are more likely to increase their market presence in the metro space," concludes Cavazos.

For more information about the report, "World Metro Area Network (MAN) Test Equipment Market," visit the company's Web site at www.testandmeasurement.frost.com.

More in Business