<<<Survey hints at start of quick turnaround
By Robert Keenan Communication Systems Design (06/06/01, 8:10 p.m. EST)
ATLANTA — A quick turnaround that could pull the electronics industry from its current slump may already be under way, according to Marconi Corp. plc. The company drew optimism from a recent Roper-Starch survey, the results of which were presented prior to the start of this week's Supercomm trade show.
In the survey of more than 200 communications service providers and enterprises, nearly 70 percent of enterprise customers and more than 70 percent of service providers said they are beginning to see signs of growth in the sector, Marconi said. In addition, 54 percent of the survey's enterprise customers and 65 percent of the service providers said they planned to increase their spending over the next 12 months.
Based on those statistics, Marconi CEO-designate John Mayo said the turnaround may already have begun.
Still, "We are not out of the woods yet," industry analyst Jeff Kagan said during a panel discussion on the survey results. "We still might have a long way to go." Kagan said the market was clearly blindsided by the swiftness of the decline, and added that it has probably hit bottom.
But he cautioned that the market would not rocket back up as quickly as it went down. "We'll probably hover for a few quarters," he said. But Kagan agreed that industry players appear confident the market will bounce back. "It's not a question of if. It's a question of when," he said.
One of the reasons for this optimism can be traced to the growth potential of broadband technology. Right now, only a small fraction of the world has access to such broadband technologies as digital subscriber lines, cable modems and fixed broadband wireless. Thus, Kagan said, there is still good potential growth in the sector, and good business opportunities for service providers and carriers, which is definitely good news for equipment developers.
But to reach a good level of growth, improvements must occur in broadband system designs. The Marconi study shows that service providers and enterprise customers think broadband has not lived up to its hype. In fact, 69 percent of enterprises and 68 percent of service providers thought the broadband market had fallen short on meeting market expectations.
For some, the answer to that dilemma lies in technology — improving the reach of a DSL line or the coverage of a cable modem network, for example.
Business concerns
Marconi said its study shows, however, that technology alone is not the answer. "Our industry has a problem, and it isn't technology or bandwidth," Mayo said. Along with building "whiz-bang" system solutions, he said, manufacturers must keep business trends in mind.
For example, the Marconi survey found that respondents thought developers of broadband equipment took too long to provision services after they were requested. In addition, the survey suggested that equipment developers failed to understand the business concerns of their customers. "The key factors for success for equipment manufacturers are not technology-related," Mayo said. "They are speed and understanding of the customer's business."
In the survey, both service providers and enterprise customers said they look for equipment makers that deliver strong customer service and a strong market focus. They also look for stable companies that deliver interoperability and good pricing.
Thus, OEMs need to look at more than building a better box, said Mayo. They must consider how that technology solution will play in the overall offerings of their customers.
According to analyst Kagan, it's also important for telecom service providers, enterprises and OEMs alike to think of themselves as data companies. Only then can they build networks and equipment that effectively transmit all forms of data, including voice, video and Internet traffic.
Robert Keenan is editor-in-chief of Communication Systems Design, a sister publication of EE Times.
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