Both scalar and vector network analyzer markets experienced steep revenue decline because of the global economic downturn, which forced key end-user markets such as electronics manufacturing to reduce their demand. The difficult economic conditions have also led to the development of a second-hand network analyzer market. Manufacturers now face the challenge of selling test gear to a smaller pool of customers with reduced spending budgets. Consequently, they are under pressure to decrease test equipment prices. The market, however, is expected to recover once the economy springs back into shape.

This research examines the world network analyzer markets. It provides key market challenges, drivers, and restraints affecting growth and offers a detailed competitive market analysis. The market has been divided into the following segments: scalar and vector. This study provides key market and technology trends in both segments to help vendors offer solutions that meet customers' requirements.

Aerospace and Defense as well as the Wireless Markets Drive Revenues

The increased CAPEX of the aerospace, military and defense industry post September 11, 2001 has allayed the effects of a feeble market economy to some extent. This industry is expected to go through a technological refreshment phase in aircraft and electronic warfare systems, which will benefit vendors. "Scalar network analyzers are likely to be used to measure military electronics and systems' components, which are low end and need simple measurements," notes the analyst. Additionally, since scalar network analyzers include a source, they eliminate the need to buy separate instruments, which will create some demand as well.

Investments in the wireless space, particularly in 3G and 4G technology, are also expected to increase revenues significantly. Wireless local area network and wireless metro area network applications are being investigated and components are being tested, as they provide significant market opportunities for vendors such as integrated transceivers in wireless handsets for example.

Scalar Network Analyzer Market Holds Potential

As there have not been many product introductions in the scalar network analyzer market recently, there is vast potential for manufacturers. "The market is still growing and there is a viable market opportunity in the installation and maintenance market, where end users are validating networks and measuring transmission paths," observes the analyst. The simple, low-end microwave component measurements segment is likely to be particularly favorable to vendors. Meanwhile, the aerospace, military and defense sector's reluctance to change test equipment is maintaining demand for scalar network analyzers.

Many leading manufacturers are moving away from the scalar network analyzer market as they estimate that innovative vector network analyzers provide higher performance and cost almost the same as scalar network analyzers. Despite the greater focus of participants on the vector segment, scalar instruments are still in demand and if manufacturers lower their prices, there could be sizable opportunities for it.