Frost: WiMAX, IMS, LTE Fuel Growth of Wireless Protocol Analyzers Market

December 19, 2007 // Published as a news service by IHS

According to Frost & Sullivan, technologies such as worldwide interoperability for microwave access (WiMAX), Internet protocol multimedia subsystem (IMS) and long-term evolution (LTE) are expected to generate demand for new products and upgrades from equipment manufacturers, as well as network operators.

Recent analysis from Frost & Sullivan of the world wireless protocol analyzers markets found earned revenues of $297.9 million in 2006, with estimates to reach $308.2 million in 2013.

"The introduction of new technologies and standards is expected to play a major role in the progress of the world WPA market as they will necessitate new test products and/or upgrades," said Frost & Sullivan industry manager Jessy Cavazos.

"IMS, LTE and mobile WiMAX are expected to be the strongest growth drivers in the short term. To some extent, LTE requires a total change of test and measurement tools as the network architecture is expected to change significantly."

Networks continue to become more complex as converged networks become a reality with technologies such as IMS spanning the wireline and wireless spaces.

Analysts said the market will witness an increase in interoperability issues, more complex media streams and scenarios, as well as a transition in the wireless space to Internet protocol (IP). Service providers will need simple to use tools that help troubleshooters ensure optimal network operability.

Analysts said ongoing M&As have significantly reduced the customer base for WPAs. Despite the better margins of third generation (3G), only Ericsson achieved profitability during the shift in network equipment manufacturer sales from second generation (2G) to 3G. This led to significant M&A activity in the equipment manufacturers market, with mergers such as Alcatel/Lucent and Nokia/Siemens.

Additionally, network convergence and its related complexities will likely drive demand for test equipment.

"These mergers are expected to significantly impact the growth of the WPA market as the subsequent integration process is often riddled with delays, budget freezes and process reassessments," said Cavazos. "Over time, this will impact prices, as well as total demand for WPAs as there will only be a few very large customers."

This market possesses significant growth potential given the challenges equipment manufacturers and network operators need to overcome. Analysts said test vendors need to rethink their current strategies and offer new tools to take advantage of such market opportunities.

Source: Frost & Sullivan.