ROME While the European market mainly mirrors what Agilent Technologies Inc. (Santa Clara, Calif.) is doing worldwide it also holds some attractions for the specialized supplier of measurement equipment. “Over the last four years test and measurement in Europe has had a compound annual growth rate of more than 12 percent,” said Benoit Neel, vice president and general manager of the company’s electronic measurements group for Europe, Middle-east and Africa.
Automotive is a growing area of interest with a strong European base. “The automotive customers demand a higher level of on-time services for their production environments and they also demand explanations of new technologies because they are moving from low frequency and analog to CAN bus, digital and RF frequencies,” added Neel (right). “They expect us to anticipate what they will need to know.”
Whereas in general Agilent works with tier one suppliers such as Robert Bosch GmbH (Gerlingen, Germany) and Siemens VDO Automotive AG (Regensburg, Germany) Neel said for areas such as garage equipment they might deal direct with the automobile makers, designing custom maintenance and repair equipment. “This is becoming a more complex market and there is a natural evolution from aiding the design of systems to providing the tool which increasingly provide preemptive maintenance and repair.”
Another aspect of T&M which differentiates Europe from other parts of the market is the strength of its academic research and centers of excellence. “This is something which is unique to Europe with ecosystems you find in Dresden, Eindhoven and Grenoble. It used to be just cooperation at the country level but it is much more cross border now. They are much more connected together.”
Consolidation of the industry is also playing a major part. “Take the network equipment manufacturing sector. We are so lucky to have the three largest companies; Nokia-Siemens, Ericsson and Alcatel-Lucent here in Europe. From a consumer perspective I am always impressed with the number of early adopters we have here for new technologies such as DSL, new 3G/UMTS, and fiber to the home,” said Neel.
“There is still a lot of innovation coming from Europe, it is the clear leader in cellular R&D and WiMAX, including chipset design with NXP, TI, Infineon, Intel, ST and cell phone design with Nokia, Motorola, Sony-Ericsson.”
Consolidation is not just an external phenomenon – Agilent is expanding through acquisition and in the last 18 months has purchased seven companies in the test and measurement sector while a further eight have been added to its life sciences and chemical analysis divisions. The three most recent T&M acquisitions were made in Europe. At the end of May Adaptif Photonics GmbH (Hamburg, Germany), a developer of products used for advanced polarization analysis and control for the test of optical components and systems in telecommunications, as well as in the sensors and laser market was acquired (see www.eeteimes.eu/199904748).
In November 2006 Agilent bought Acqiris (Geneva, Switzerland) a developer of high-speed digitizers and analyzers and the potential for this acquisition was driven by the U.S. “They recognized the value of a company based in Switzerland to fill a technology gap. However Neel said the identifying of possible acquisition targets is not restricted to senior corporate managers, the impetus for the Adaptif acquisition came from a local manager in Germany “We are not aiming to buy market share, it is all about technology and the ability to fill a gap in our product line as with Adaptif or to enable us to enter a new market sector, which was the case with Acqiris.”
Agilent, with an enviable reputation for leading-edge equipment that is high-performance and priced accordingly, is now working hard to attack the lower end of the handheld and desktop instrumentation markets which it entered during 2006 – see below.
In Europe that has meant taking on a new distribution channel and recruiting staff with expertise in handling higher volume, lower cost products. This has seen the recruitment in March 2007 of Alessandro Pino who was previously LeCroy’s international sales manager for Europe and who also worked in a similar role at Tektronix. Pino, with 18 years experience within the test and measurement industry, has become European distribution sales manager for Agilent, and aims to help Agilent reach a broader set of customers for low-cost handheld, bench and modular instruments.
“We are now recruiting people in individual countries to work with the distributors and have brought in specialist marketing people. We have set up a distribution business centre based in Barcelona,” said Neel. The Spanish facility which is based in the World Trade Center houses staff drawn from over 30 different nationalities.
Neel said: “The low cost instrumentation business is a strategic move for us and we are committed to making this a success and I would expect that in the long term it will be 10 to 20 percent of our revenue in Europe.”
Basic instruments make in-roads to expand the market
Agilent made a dramatic entry in to the ‘low cost’ instrumentation market in 2006 with benchtop and handheld units coupled with modules and software. It has followed that up so far in 2007 with a handheld spectrum analyzer, benchtop power meters and spectrum analyzers and a number of accessories.
“As this was a new market for Agilent we initially concentrated on more general electronic instruments and the next move is to fill the gaps, especially with units aimed at specialized applications,” said Ee Huei Sin (left), the vice president and general manager of Agilent’s basic instruments division. On July 1 the company added the U2000 series USB power supply with a power analysis manager and a series of application specific handheld digital multimeters set to follow in the coming months.
The total market that this new business can address is worth $1 billion per year and enjoys an annual growth rate of 6 to 8 percent, according to Huei Sin. “This expansion is being driven by the growth of electronics manufacturing in developing countries such as [those of] Eastern Europe, the drive to improve test efficiency and demand for lower-cost of ownership, a higher emphasis on education in emerging markets and an increased demand for high performance portable products,” said Huei Sin.
The basic instrument division is based in Penang, Malaysia, with design and manufacture being carried out there and in other parts of the Far East including Taiwan and Korea.
“We have other divisions doing R&D for higher cost and more sophisticated instruments. We will work with those divisions to attack gaps at the lower end and leverage their work of such things as software development. That is the power of Agilent, we have the technology and with this new initiative we have the manufacturing and channel to address this part of the market,” said Huei Sin.
So why did it take so long for Agilent to enter this sector of the T&M market? According to Gooi Soon Chai, vice president and general manager of Agilent’s electronic instruments business unit, traditionally Agilent has been a more diversified company and it was a question of where to invest R&D money to get the best return. “This was obviously to target the high end sector. As we repositioned ourselves as ‘the premium measurement’ company the new CEO, Bill Sullivan [appointed in Mar 2005], said we should leverage our 30 years of experience in Asia.”
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