The need to network fuels strong growth

Article Abstract:

Revenue increases in computers and related equipment will be outpaced by growth in communication systems in 1996. Communication market revenues in the US are estimated to grow at 15.5% in 1996. Contributing growth factors in 1996 will be the expansion of computer LAN and WAN networks, the continuous cost decline of communications, and the rising use of video and data conferencing. The cellular phone market will also be affected in 1996 by falling prices and margin reductions. Observers note that diminishing margins may provoke some companies to consolidate and others to leave the market, while a subscription decline is also anticipated. Also anticipated in 1996 is a price war for cellular phone services between MCI, AT&T and GTE. Industry observers expect about 12.4 million new cellular subscribers in 1996, up from 9.3 million in 1995. Development on new generations of handheld units combining fax, phone and data services is anticipated from cellular-service providers.

Preview of coming year, Technological forecasting, Consumer electronics industry, Communications technology, Telecommunications, Corporate growth, Industry growth

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System makers face quality tradeoffs in the infernal triangle

Article Abstract:

Equipment makers in the 1990s are facing an infernal triangle caused by the trade-off between quality, price and time-to-market. While any combination of two of the three factors is possible, most equipment makers acknowledge that it is nearly impossible to produce a product that satisfies both the need for high quality, low price and quick development. The triangle is caused by several factors including the increasing complexity of computer products, the demand for lower prices by consumers and the short development cycles necessary in the market. Computer components have become extremely complex. Add-on boards that used to have 1,200 to 1,500 solder joints found on one side of the board, but today most boards have over 4,000 joints found on both sides. Also, more components are crammed into each board. Consumers continue to demand lower prices over quality, which forces equipment makers to cut corners.

Microcomputer industry, Management issue, Cover Story, Quality control, Manufacturing

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Interest rate cuts to spur growth, but not just yet

Article Abstract:

Lower interest rates coming from most industrial nations promise to spur economic growth, but economists are wary that the global market will respond quickly. As world interest rates come down, the domestic electronics industry is being challenged in 1996 by slower computer purchases to around 15% to 20% versus the anticipated 20% to 30%. The cellular telephone industry is showing slow growth, but chip companies may face tough times ahead with dropping prices expected in the DRAM market. Chip makers Advanced Micro Devices Inc and Cyrix Inc are facing tough times ahead as Intel accelerates the marketing of its Pentium processor. Domestic electronics companies will hope that increased sales overseas will offset the slower growth that is anticipated at home.

ELECTRONIC & OTHER ELECTRIC EQUIPMENT, Analysis, Electronics industry

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