WORLD PC-BASED TEST AND MEASUREMENT EQUIPMENT STUDY Study Definition: ‘PC cards that are plugged into slots inside the computer or into PC bus expanders, with the assistance of software drivers, and which transform the desktop or laptop PC into T&M equipment.’ Note: This study does not include the PXI-based products.

Major Product Segments Covered Under This Study:  Counter Timer/DMM  Digital I/O  Digitizers/Oscilloscopes  Signal Source Cards  Switches  PCMCIA Cards  Other PC-based Test Equipments

Overall Market View  Revenues in 2003: $133.3 million  Growth Rate Over 2002: 1.7 percent  CAGR: 7.7 percent  Market Concentration: 47.2 percent Top Five Market Share Holders  National Instruments: 38.3 percent  Gage Applied Technologies: 4.8 percent  Acqiris: 4.1 percent  Geotest Marvin: 3.9 percent  Measurement Computing: 2.8 percent

DMM Market Overview  Revenues in 2003: $11.4 million  Growth Rate over 2002: 5.6 percent  CAGR: 7.4 percent  Market Concentration: 73.6 percent Definition: For the purpose of this report, one unit of counter timer and DMM product is defined as a plug-in PC card-based measurement product. Current products on the market that fit this unit definition include National Instruments-PCI 4060 and Signametrics' SM-2020 series.

Digital I/O  Revenues in 2003: $21.6 million  Growth Rate over 2002: 7.5 percent  CAGR: 13.6 percent  Market Concentration: 45.3 percent Definition: For the purpose of this report, one unit of a PC-based digital I/O is defined as a plug-in digital I/O card module. The products on the market that fit this unit definition include the PCI-DAS6000 series offered by Measurement Computing.

Digitizer/Oscilloscope  Revenues in 2003: $28.7 million  Growth Rate Over 2002: percent  CAGR: 4.0 percent  Market Concentration: 59.5 percent Definition: For this report, one unit of a digitizer/oscilloscope is defined as a plug-in PC-based card that is plugged into slots inside the computer or into PC bus expanders. With the help of software drivers transforms the desktop or laptop PC into a test and measurement equipment. Products on the market that fit this unit definition include National Instrument (NI) 5911, Gage Applied Technologies CompuScope85G.

Signal Source Cards  Revenues in 2003: $12.6 million  Growth Rate Over 2002: percent  CAGR: 4.5 percent  Market Concentration: 69.8 percent Definition: For the purpose of this report, one unit of a PC-based source is defined as a plug-in source and the products in the market that fit this unit definition include National Instruments' Ni 5411 arbitrary waveform generator (AWG), Chase Scientific Company’s AWG1000, and Signatec's DAC series.

Switches  Revenues in 2003: $5.1 million  Growth Rate Over 2002: 8.5 percent  CAGR: 10.0 percent  Market Concentration: 27.4 percent Definition: For the purpose of this study, one unit of a PC-based switch is defined as a plug-in switch card. Current products on the market that fit this unit definition include signametrics SM4020, Geotest's GT 6064.

PCMCIA Cards  Revenues in 2003: $13.3 million  Growth Rate Over 2002: 14.0 percent  CAGR: 8.4 percent  Market Concentration: 60.9 percent Definition: Current PCMCIA products on the market that fit the definition of this report include Measurement Computing’s PC-CARD-D24/CTR3.

Other PC-based Test and Measurement Equipment Markets  Revenues in 2003: $40.6 million  Growth Rate Over 2002: 9.7 percent  CAGR: 6.6 percent  Market Concentration: 58.3 percent Definition: Current products on the market that fit this unit definition include Measurement Computing’s PCI-COM422/485-2, Condor Engineering's CEI-520 ARINC interface for PCI, Geotest Marvin's PD2-MF-64-2M, Datel's PC-462 precision programmable power supply board, and ACCESS I/O's PCI-ICM-2S serial communications card, etc.

Major Research Findings  Fragmented market  Market share of national instruments has grown  The overall PC-based test equipment market has grown marginally in the last one year  There is an increasing shift in focus towards niche markets  Sluggish growth in the end-user segments instills price pressure  Capital expenditure is skewed in favor of manufacturing PXI-based products  Direct correlation between R&D spends and increased market share

Major Factors Restraining Growth  Intense competition from other PC-based platforms imposes challenges for PC-based test equipment / vendors inclination to produce PXI modules shuns the growth of PC-based test equipment market  Expansion limitations encumber demand for PC-based test equipment  Advent of Ethernet and large installed base of GPIB test equipment restrains growth  Lack of an industry-wide alliance to disseminate information and educate end users on the benefits of PC-based test equipment

Major Factors Driving Growth  Price of the PC and the cost advantage prompts customers to adopt PC-based test equipment  Need for faster throughput drives demand  Flexibility that a software provides drives the growth of PC-based test equipment market  Capability to add advanced features on a PC plug-in card reduces time-to-market and product development time

Major Challenges Confronting PC-based Test Equipment Market  To develop innovative products with limited capital budgets  To grow by exploring niche application areas  Reduce product development time  Increase branding and promotional efforts  To educate end users on the benefits of PC-based test equipments  To appropriately position PC-based test equipment as a complementary platform rather than a competing platform with PXI  To produce equipments with additional features while not increasing the price of the product  Keep pace with rapid changes in the end-user technologies

Strategic Conclusion  Need to collaborate by leveraging core competencies  Need to increase promotional and branding efforts  Need to bolster R&D capabilities to remain dominant in niche application areas