December 27, 1965 Electronics
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December 27, 1965
This is the electronics market prediction for United Kingdom, circa 1966. It was part of a comprehensive assessment by the editors of Electronics magazine of the state of commercial, military, and consumer electronics at the end of 1965. The British post office was investing in communications and automation, while Thorn Electric was cranking out TV's. Ecko Electronics Plessey, and Marconi were manufacturing defense electronics and dabbling in newfangled computers. Unless you can find a news story on the state of the industry, detailed reports must be purchased from research companies like Statista. Their website has a lot of charts on the UK's current electronics market showing revenue in the consumer electronics segment amounts of US$12,564M in 2018.
Separate reports are included for
(the Berlin Wall was still up then), the
obviously not part of Europe, is also covered.
United Kingdom Electronics Market
Gains expected in computer, military, communication sales
Increased spending for military electronics, telecommunications and computers should lift the British electronics market 9% to $1.81 billion in 1966 from $1.67 billion in 1965.
The military electronics industry had been hurt by the cancellation of the sophisticated TSR-2, a British fighter plane, in early 1965, but contracts are beginning to come through now for British-built equipment on planes bought from the United States. Contracts were awarded for the Hercules C-130, a turbo-prop heavy transport made by the Lockheed Aircraft Corp., and negotiations are going on now for supplying the electronics on the Phantom 2, a twin-engine attack bomber built by McDonnell Aircraft Corp.
In telecommunications, the British Post Office has announced an increase in the budget, from $500 million a year to $750 million annually over the next decade. Computer purchases are expected to climb to $234 million next year from $221.2 million in 1965. The component market is expected to grow to $558.7 million next year from $516.3 million in 1965.
The biggest puzzle for the electronics industry is the state of the British economy. The pound has been healthy since standby credits were arranged with foreign central banks in September. With luck, the government will achieve a balance of payments by the end of 1966 without the need of further deflationary measures and without a recession.
However, the deflationary measures taken in successive stages since November 1964 have had little effect. There is a labor shortage, and despite the government's price and income policy, wages are rising steeply - 7% to 8% a year.
If wages continue to rise, foreign investors may get edgy again, the pound may weaken, and the government may be forced to further deflationary action. This could cause a recession. Deflationary measures adopted by the government in 1964 included a boost in the banks' basic interest rate to 7%, the highest level in modern times. The rate was lowered to 6% in June of this year. Sterling outflow was stemmed with an import levy of 15% which was dropped to 10%. Further government regulations may be necessary if exports lose their buoyance - they've risen about 5 1/2% this year - and imports rise again.
There are some who say a recession will come anyway as the government's measures - particularly the cutback in public capital spending - bite more deeply.
British electronics markets
Two prestigious British economics groups have just predicted that the growth next year will be slow, with a rise of only 2% in production. They. also say a recession will be avoided and by the end of 1966, trade should be about balanced.
A blow to the military market was the abandonment of the TSR-2 in 1965. When the plane contract was cancelled, about $33 million had been spent or committed by the British government for electronics. The total cost of the electronic systems would have been $90 million. Involved in the contract were firms such as Elliott-Automation, Ltd., Ferranti Ltd., and EMI Electronics, Ltd.
However, the industry expects contracts for American-built planes. The British Electronics Engineering Association, for example, worked out a deal with the Ministry of Aviation, to provide electronic equipment for the 75 to 80 Lockheed C-130' aircraft Britain is purchasing.
Negotiations are still under way for outfitting McDonnell's Phantom 2 with about $54 million worth of avionics and weapons system controls over the next few years.
Supplying the equipment for the C-130 will be Ekco Electronics, Ltd., weather radar; the Plessey Co., uhf/vhf communications; Marconi, Ltd., vhf communications, instrument landing and automatic direction finding; Ultra Electronics, Ltd., inter-communications equipment; Standard Telephones & Cables, Ltd., a subsidiary of the International Telephone and Telegraph Corp., radio altimeter; Decca Navigator, Ltd., Doppler equipment, navigational computers and display system; S. Smith & Sons, Ltd., autopilot; and A.C. Cossor, Ltd., identification equipment.
The Royal Air Force also has budgeted $132 million for radio, radar and navigational equipment for 1965-66. (The British defense budget's fiscal year begins in April.) About $44 million of this $132 million is being sent for the national computerized air-traffic control system. One computerized system is being installed at Britain's main air-traffic control center at West Drayton near London Airport. The $300-million system will be operational by 1969. Plessey has the contract for the computer complex, and Marconi is supplying the radar and traffic-control displays.
The British Army will be spending about $16 million for radars and supporting equipment for the Thunderbird-2 antiaircraft missile system and for manpack radios. The Navy has budgeted $69.2 million for electronic and electrical stores for the Polaris program. The Army is still bogged doen in its studies of a tactical radio communications system, called the Hobart plan, which has been plagued by soaring costs - from an estimate about a year ago of $270 million for the forward line to $450 million this year. The Hobart plan covers the gamut of Army signals from complex headquarters exchanges to manpack sets in the forward units. A complete reappraisal is now being made, to reduce the cost by $180 million.
A decision on the British purchase of the General Dynamics F-111A, and another project, the Anglo-French Jaguar strike-fighter/trainer consortium, may come next spring, following a government defense review.
Between one-quarter and one-third of the Post Office's annual $750 million investment is earmarked for telephone exchange equipment and associated apparatus. Although barely a beginning has been made, a market is slowly developing for electronic telephone exchanges. D.A. Andrews, chief telecommunications superintendent of the Post Office, says: "We are progressing slowly from research to production."
Already operating are two experimental 200-line electronic switching units. One 800-line exchange will be installed next year, and contracts have been awarded for three more 800-line exchanges and a 1000-line exchange. A 3,000-line exchange is now being installed and will be ready for field trials in 1966. In these exchanges, which are space division multiplex systems, the reed relay is used for speech-path switching and certain control functions. The systems were developed by the joint electronics research committee, which consists of five telecommunication equipment suppliers. They are Associated Electrical Industries, Ltd., Automatic Telephones & Electric, Ltd., the L.M. Ericsson Telephone Co., the British General Electric Co. and Standard Telephone & Cables.
The country's expanding telephone system will also benefit makers of microwave equipment. Some 20 microwave stations will be built in the next three years. A 600-foot tower in London, the focal point of the national microwave system, was constructed this year. When in service, the tower will link the country's principal cities with those on the continent and in the U.S. via satellites.
Preparations for satellite communications are being made now. A second 85-foot antenna, which will allow the station to track two satellites simultaneously or provide a continuous communications service - by having each antenna track alternate satellites as they appear over the horizon - is being built at Goonhilly Downs.
In other aspects of the electronics industry, the mobile radio equipment market is also expanding. During the last four years, the number of mobile stations has nearly doubled from about 24,000 in 1961 to more than 44,000 in 1965. The Post Office expects the trend to continue into the 1970's.
Consumer Question Mark
What will happen to the television business is not so clear. Some industry officials are pinning their hopes on further expansion by the state-owned British Broadcasting Corp.'s second television channel - BBC 2. The channel, transmitting on 625-line uhf, is seen by about one-quarter of Britain's population and is expected to reach 70% of them by the end of 1966. But sales failed to increase as expected when the service started early in 1965, and manufacturers found themselves with a surplus of sets. There's also the chance there may be a second commercial channel - 625-line uhf. But the Post Office, which regulates television, hasn't made its position known.
British companies, such as Marconi Company, are working on research projects from lasers to microcircuitry.
Keith Miller, group marketing manager of Thorn Electrical Industries, Ltd., which produces more tv sets than its two largest competitors together, sees only moderate growth over the next few years.
He says industry output next year will be about the same as this year-about 1.85 million sets. Saturation is high - about 90% of the British homes have tv sets, either owned or rented. Miller says more tv sets can be sold by encouraging people to own two sets instead of just one.
Color television is seen as the bright hope to spur sales, but not this year. The government still has to decide on a system and when it will be introduced. However, the Television Advisory Committee has recommended to the Post Office that Britain adopt the West German PAL system. Because of the delay in deciding on a system, color tv cannot come to Britain before late 1967 or early 1968. "Even then," one official says, "there won't be any sudden rush of buyers because of the initial high price of color receivers," probably between $500 and $700.
Radio is having its problems, too, with the market for the less-expensive transistorized portable sets leveling off. Sales of very high frequency sets (a-m and f-m) will remain stable at two million. Most of the market for small, transistorized portable radios has been captured by imports from Japan, Hong Kong and Taiwan. About 1.5 million radios were imported in 1965, and 1.7 million in 1964.
Brisk Computer Business
The British computer market is a rarity: it's one of the few European countries not completely dominated by the International Business Machines Corp. in sales, although IBM does share the lead. Estimates vary, but most experts believe IBM commands 35 to 40% of the market as does International Computers & Tabulators, Ltd. The market is estimated at $234 million in 1966, up from $221.2 million in 1965.
Efforts to counter the foreign influence are being made. ICT introduced the 1901 computer series, this year, and English Electric, Ltd., has announced the System 4 series, which uses integrated circuits in its processors. The System 4 will be rolling off the production lines early in 1967.
The computer industry has been an early recipient of the Labor Party's effort to help industry by initiating research in computer techniques. Computer firms have found it encouraging. One official commented: "It is the first time we have ever had interested civil servants talking the language of manufacturers."
Another effort to improve the competitive situation is being made in a joint effort by British and French electronics companies. They are seeking money from their respective governments for an Anglo-French computer, consortium that would design a large computer by the 1970's that would reportedly dwarf the biggest present U. S. machine - Control Data Corp.'s 6600.
Growing IC Market
British companies are also struggling for a foothold in the infant market of integrated circuits. This year, sales totaled about $3 million, a figure that will increase to about $8 million in 1966. The integrated circuits have been used mainly for military equipment and computers.
Although British companies are behind the U. S. in technology, they are developing a capability for IC production.
One of the most active companies is a micro-electronics affiliate of Elliottt-Automation, Ltd., with about 200 people now working and plans under way for a $2.8 million plant. The company's efforts include thin-film, monolithic and metal-oxide semiconductor technology.
Marconi is producing a microelectronic computer called the Myriad, a real-time data processing computer.
Over-all, the British component market reached $516.3 million this year, and is expected to total $558.7 million in 1966.
Posted September 24, 2018