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Voice compression technology: developments, market opportunities
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Voice compression technology: developments, market opportunities BCC, USA (1985) $1750 According to this study the market for compression equipment in 1985 is projected to be $346 M, an increase from $180 M in 1984. By 1993, sales of component and end user equipment are estimated to be $790M, representing an average annual growth rate of 11% over the period. The growth of individual equipment markets will be uneven, or staggered over the period, since the industry will be characterized by a large number of product entries during the mid-to-late 1980s, and because of the products now in R&D. Individual product categories will have dollar market growth rates ranging from -9% to 40% annually from 1985 to 1993. The availability of lower cost components and equipment with enhanced networking features, together with new digital voice standards will increase demand for these products. The report concludes that unit sales will increase greatly for component equipment (digital signal processors and codecs) over the period as more applications develop for adaptive differential pulse code modulation (ADPCM) and other low bit rate voice equipment. Unit prices, however, are expected to drop steadily for both end user and component equipment as more manufacturers introduce products -although certain classes of compression gear will resist price declines better than others. Selected equipment types will undergo dramatic sales increases as prices drop. For example, as transcoder prices decline, the regional BOCs and other independent telephone companies are expected to introduce compression technology and services to their networks. The report observes that the near term markets for producers of ADPCM-based hardware are in route relief (selected common carrier routes) and in bypass (corporate) telecommunications networks.
34
The report states that the outlook for compression markets in the 1990s hinges on ISDN standards. Digital voice transmission standards are now being evaluated. The final choice of 64 Kbit/s (PCM) or 32 Kbit/s (ADPCM) for digital conversation has fundamental architectural implications for telecommunications service providers and for designers of switch and transmission equipment. ADPCMcompressed voice signals provide significant bandwidth savings with little sacrifice of voice quality. However, limitations on the number of permissible back-to-back conversations (from analogue to digital signals) complicate ADPCM's use in public telephone systems. The distribution aspects of the compression equipment industry are of extreme importance and interest. International markets for analogue TASI, TDMA satellite gear and T1 multiplexers are growing strongly and to participate in this overseas growth, small firms have set up international offices, built distributor networks abroad and licensed their technology for manufacture and sale by larger companies. The use of OEM's or original equipment manufacturers,
which resell equipment under their own names, is especially common among T1 multiples manufacturers. Some of these manufacturers are reported to supply as many as six OEM's for their equipment. Larger US electronic firms have been eager to resell other companies' T1 multiplexers to gain sales to corporations while avoiding the product development expenses necessitated by fast changing product technology. Small firms, for their part, have been seeking U.S. distribution agreements with the Regional BOCs and large independent telecommunications companies whose equipment selling subsidiaries are expected to become a significant sales outlet for transcoders and multiplexers. The report concludes that new entries to the industry will vary in number and size according to the type of equipment. Producers of end user equipment such as T1 multiplexers will soon include elctronics conglomerates although there is still room for small ventures in this industry. Codecs and other components will be produced by traditional telephone equipment makers and semiconductor manufacturers, particularly Japanese firms. Finally, certain manufacturers will phase out analogue compression products in favour of digital devices. (Business Communicat/ons Company, 9 Viaduct Road, Stamford, CT 06907, USA. Tel: (203) 325-2208) []
Packet switching services and equipment IRD, USA (1985) $2300, 179 pp Revenues from packet-switching services in the USA approached $600 M in 1985 and will be ten times as high in 1995. So states this report, which analyses expected user requirements for transmission of data, image, text and voice, and concludes that much of the future growth in data transmission will be absorbed by the packet services, rather than by increased use of leased-line data networks.
Although the packet-switching market has grown dramatically over the past ten years, the overall growth of data transmission revenues has been very slow during that time. As a percentage of overall transmission service revenues, data transmission represents about 15% today, which is about the same figure as in 1975. Growth in data transmission revenues has paralleled the 3-4% per year growth in voice transmission, but
computer communications
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~ w
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Voice compression technology: developments, market opportunities BCC, USA (1985) $1750 According to this study the market for compression equipment in 1985 is projected to be $346 M, an increase from $180 M in 1984. By 1993, sales of component and end user equipment are estimated to be $790M, representing an average annual growth rate of 11% over the period. The growth of individual equipment markets will be uneven, or staggered over the period, since the industry will be characterized by a large number of product entries during the mid-to-late 1980s, and because of the products now in R&D. Individual product categories will have dollar market growth rates ranging from -9% to 40% annually from 1985 to 1993. The availability of lower cost components and equipment with enhanced networking features, together with new digital voice standards will increase demand for these products. The report concludes that unit sales will increase greatly for component equipment (digital signal processors and codecs) over the period as more applications develop for adaptive differential pulse code modulation (ADPCM) and other low bit rate voice equipment. Unit prices, however, are expected to drop steadily for both end user and component equipment as more manufacturers introduce products -although certain classes of compression gear will resist price declines better than others. Selected equipment types will undergo dramatic sales increases as prices drop. For example, as transcoder prices decline, the regional BOCs and other independent telephone companies are expected to introduce compression technology and services to their networks. The report observes that the near term markets for producers of ADPCM-based hardware are in route relief (selected common carrier routes) and in bypass (corporate) telecommunications networks.
34
The report states that the outlook for compression markets in the 1990s hinges on ISDN standards. Digital voice transmission standards are now being evaluated. The final choice of 64 Kbit/s (PCM) or 32 Kbit/s (ADPCM) for digital conversation has fundamental architectural implications for telecommunications service providers and for designers of switch and transmission equipment. ADPCMcompressed voice signals provide significant bandwidth savings with little sacrifice of voice quality. However, limitations on the number of permissible back-to-back conversations (from analogue to digital signals) complicate ADPCM's use in public telephone systems. The distribution aspects of the compression equipment industry are of extreme importance and interest. International markets for analogue TASI, TDMA satellite gear and T1 multiplexers are growing strongly and to participate in this overseas growth, small firms have set up international offices, built distributor networks abroad and licensed their technology for manufacture and sale by larger companies. The use of OEM's or original equipment manufacturers,
which resell equipment under their own names, is especially common among T1 multiples manufacturers. Some of these manufacturers are reported to supply as many as six OEM's for their equipment. Larger US electronic firms have been eager to resell other companies' T1 multiplexers to gain sales to corporations while avoiding the product development expenses necessitated by fast changing product technology. Small firms, for their part, have been seeking U.S. distribution agreements with the Regional BOCs and large independent telecommunications companies whose equipment selling subsidiaries are expected to become a significant sales outlet for transcoders and multiplexers. The report concludes that new entries to the industry will vary in number and size according to the type of equipment. Producers of end user equipment such as T1 multiplexers will soon include elctronics conglomerates although there is still room for small ventures in this industry. Codecs and other components will be produced by traditional telephone equipment makers and semiconductor manufacturers, particularly Japanese firms. Finally, certain manufacturers will phase out analogue compression products in favour of digital devices. (Business Communicat/ons Company, 9 Viaduct Road, Stamford, CT 06907, USA. Tel: (203) 325-2208) []
Packet switching services and equipment IRD, USA (1985) $2300, 179 pp Revenues from packet-switching services in the USA approached $600 M in 1985 and will be ten times as high in 1995. So states this report, which analyses expected user requirements for transmission of data, image, text and voice, and concludes that much of the future growth in data transmission will be absorbed by the packet services, rather than by increased use of leased-line data networks.
Although the packet-switching market has grown dramatically over the past ten years, the overall growth of data transmission revenues has been very slow during that time. As a percentage of overall transmission service revenues, data transmission represents about 15% today, which is about the same figure as in 1975. Growth in data transmission revenues has paralleled the 3-4% per year growth in voice transmission, but
computer communications