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October 18, 1965 Electronics
 [Table of Contents]
Wax nostalgic about and learn from the history of early electronics.
See articles from Electronics,
published 1930 - 1988. All copyrights hereby acknowledged.
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This is the electronics market
prediction for West Germany, 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. West Germany was intent on being a
player in the Space Race with Siemens and Telefunken providing expertise. Bochumer
Verein was pushing the electronic computer frontiers forward. The article states
that only about 5% of West Germany's factories including heavy industry have anything
approaching the automation of American industry. Factory automation was viewed as
a threat to the German workers. 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 Germany's current
electronics market showing revenue in the consumer electronics segment amounts of
US$2,948M in 2018.
Separate reports are included for
West Germany
(the Berlin Wall was still up then), the
United Kingdom,
France,
Denmark,
Austria,
Sweden,
Belgium,
Switzerland,
the Netherlands,
and Italy.
Russia, although
obviously not part of Europe, is also covered.
Western Germany
Electronics Market
Industry rides on economic crest
 The West German economy heads into 1966 at its
strongest level since before World War II. And riding the crest of this economic
wave will be the thriving electronics industry, the biggest in Europe; domestic
consumption reached $2 billion in 1965 and is expected to total $2.2 billion next
year.
Last year, West Germany satisfied its own domestic demand for electronic gear
and ranked second only to the United States as an exporter of industrial electronic
products. West German electronic equipment has found a worldwide market, from electronic
telephone-switching equipment in Rome to automatically controlled tankers on the
high seas.
Because of restrictions imposed on West Germany by the Allied occupation forces
following World War II, the country's modern electronics industry is really only
10 years old. So West Germany has a long way to go to catch up with the United States
in many advanced applications and advanced research and development. Many West German
research workers eye the massive infusion of U.S. government funds into research
and development with envy.
At the sprawling central laboratories in Munich of the giant
Siemens &
Halske AG, the largest electronics company in Germany, a research of-ficial
says: "We cannot afford the wide-ranging projects that are possible in the U.S.
In fact, less than 1% of our research and development budget comes from the government."
But the West German electronics industry is hopeful that some year soon it will
rank as a leading innovator in the field.
Government and defense
On its own and in cooperation with other European countries, West Germany is
hard at work on such diverse projects as satellite-launching rockets, research and
communications satellites, satellite ground-control stations, vertical/short-range
take-off and landing (V/STOL) tactical fighters and transports, and helicopters.
In 1966 and the coming years, these will represent a growing market, but a market
in which the German electronics companies are going to fight harder than in the
past.
Earlier this year, the West German Ministry for Scientific Research estimated
the country's need for space projects funds at nearly $500 million for the next
five years. And in the past year or so, a number of German companies have moved
to strengthen their position in advanced applications by seeking ties with other
companies, both domestic and foreign.
West German electronics markets
For example, Telefunken AG joined a consortium led by the Hughes Aircraft Co. to snag a North
Atlantic Treaty Organization air-defense ground-environment (Nadge) contract. Siemens
joined an opposing consortium led by the Westinghouse Electric Corp. AEG, Telefunken's
parent, is working closely with the General Electric Co. in atomic power. Siemens
produces some of the Radio Corp. of America's line of computers and sells them in
West Germany.
Still, the U.S. is the major source for much of the electronic gear vital to
West Germany's defense and is likely to remain so as long as the West German Army
is considered only a part of NATO.
Last year, 30% of the radio equipment orders in West Germany were filled by the
U. S. To change this, German companies are setting up more lucrative links with
U.S. firms, tapping American know-how through licenses, exchanges or outright acquisitions.
An example of the latter is Telefunken's take-over of the majority interest in GE's
subsidiary, Electronische und Luftfahrtgerate, GmbH, which services airborne electronic
equipment.
Bucking this trend, though, are the subsidiaries of the U.S. companies actually
manufacturing in Germany. For instance, 80% of the computers manufactured in Germany
are made in American-owned plants, as are about 20% of all military and industrial
electronics equipment and about 15% of consumer electronics.
Consumer electronics
The West German electronics industry is expected to show strength across-the-board
except in some areas of consumer electronics. Sales of radio receivers will be stimulated
when the West German broadcasting companies and the post office - which as in other
European countries is re-sponsible for radio and television transmission - begin
stereo broadcasting around the end of 1966.
Although it will not be ready before 1967 at the earliest, color television is
already far along in manufacturers' planning. The coming year will be a time for
readying production lines to avoid the pinch the U.S. industry is now feeling because
demand is far outstripping production.
But the West German electronics industry is in no real hurry to push color television
into the marketplace. Sales of black-and-white sets are strong and more than 50%
of the West German households now have at least one television set. By the end of
1966, this should reach nearer 70% and only then will the manufacturers feel the
threat of saturation and the need for a new product. The domestic makers know they
must be ready with color-television sets because a hefty 30% of the West German
tv-set market now is filled by imports from other European nations. Without a competitive
color set, this percentage might rise.
Sales are expected to rise in tape recorders and record-playing equipment and
there are also great hopes for automobile tape recorders using easily changeable
cartridges, a product introduced only this year.
Industrial electronics
Electronics in the factory is gaining fast in West Germany as the demand from
the country's prosperity outraces production capacity. A factor, too, is the chronic
labor shortage that is being met - not always successfully - by the Gastarbeiter,
as the foreign worker is called. Over 1.2 million strong, this labor force - recruited
from Greece, Yugoslavia, Italy and England-is an important factor of many electronic
plants.
So far, only about 5% of West Germany's factories including heavy industry have
anything approaching the automation of American industry. The percentage is expected
to double in the next five years, opening a large market for electronic-control,
measuring and testing equipment.
Last year, nearly half of the control, measuring and testing instrument imports
came from the U.S. Although the competition from the rest of Europe, especially
in process-control computers is growing, the American position is expected to stay
at a high level in 1966.
In just about every segment of West German commercial and industrial activity,
sophisticated controls systems are being planned and electronic devices form their
backbones. Numerical control is hurting the traditionally stolid West German machine
tool industry. Not only has numerical control fathered a new generation of machine
tools, but it is also pushing electronics into new areas - one of particular note
in West Germany is the increasing automation of automobile design.
Next year will see several computer-controlled steel-rolling mills operating.
One will be at the Fried. Krupp-owned
Bochumer Verein
in the Ruhr that was designed from the ground up for computer control. These mills
have already triggered competition for new control systems both in the steel industry
and elsewhere and 1966 should see an expansion of interest-and of orders - for electronic
process control.
The fast-growing, and ultimately the most lucrative industrial market, is for
process-control equipment, with the digital computer far and away the most attractive
product. International Business Machines Corp. now supplies some 70% of the West
German computer market, but Siemens - with a 6% share of the market-hopes to cut
down IBM's near-monopoly in 1966. The West German company recently announced it
planned expenditures of $125 million "within the next few years" to build up its
electronic-data processing business.
Siemens intends to spend $10 million of that amount almost immediately by building
a new computer development center in Munich. Another $5 million will be spent to
expand already existing computer-production plants in that city. Siemens signed
an agreement about a year ago with RCA to share licenses and sales facilities for
RCA's Spectra 70 computer, which Siemens will distribute in Germany as the 4004
system. About 70% of the 4004's components are U.S.-made, but Siemens hopes to reduce
this to about 30%.
Transportation is feeling the impact of electronics, too. Next year, this market
will grow as both the railroads and the various government road agencies step up
their programs for traffic-flow control. The Deutsche Bundesbahn, which runs the
railroad network, has installed electronic controls in major train terminal switchyards
and on some sections of the mainline right-of-way. The company is also looking at
block control systems. Under the direction of a computer, these systems feed information
back into the cab of a locomotive rather than just to the signals at trackside.
Similar systems are being tested for subways in several West German cities.
And the West Germans, long-standing innovators in highway development, have installed
computer-directed traffic control systems in the heart of West Berlin and Munich.
West Berlin regulates traffic on the major road leading out of the city to the Hanover
Autobahn. The control system, made by Siemens, employs a signal processor for routine
work and a Siemens-Halske 303 process computer for tasks that require complex
decisions. The machines cost a total of $250,000.
Siemens also has installed a control system, which uses radar detectors, in Neu-Ulm,
in southern Germany. In a previous setup in Hamburg, the company used pneumatically
operated strips to measure traffic flow and select a control program electronically.
Munich installed a specialized computer made by a British firm, Elliott-Automation,
Ltd. Costing $350,000, the machine will select programs from a repertoire of 40
that control the timing of traffic lights.
The telephone network in West Germany, as in the United States, is going through
an evolutionary upheaval with direct distance dialing to many neighboring countries
an accomplished fact and electronic switching systems appearing-both for central
offices, such as one installed in Munich, and for private branch exchanges.
Some 30 to 40% of the market for West German telephone equipment is abroad, according
to Siemens. So American companies can expect continuing competition in foreign markets
from West German equipment, which is as advanced as American wares in many areas
and in some - such as desk-top call director units - even more advanced. For example,
one Siemens desk-top director has both a memory for each of its labeled buttons
- addressed by punching the punch-button dial on the set-and also a temporary memory
to store the last number called in case it is busy and there is a need to call again.
Components
In components, West Germany still lags behind the United States applying advanced
products. As with many other electronic products, West Germany may be just a bit
too late with its integrated circuits. Says a Siemens executive charged with semiconductor
production: "So far, there is no real demand here for integrated circuit production.
And what interest there is can be more easily - and more cheaply - met through licensing."
Siemens is making integrated circuits for in-house use in the computers it makes
under the agreement with RCA.
Besides being a market nearly ripe for integrated circuits from the U.S., West
Germany can absorb healthy amounts of other components, such as advanced types of
transistors, even specialty tubes. West Germany now purchases nearly 30% of her
component imports from the U. S. and is expected to continue as a strong market
for U. S. components next year.
Posted July 17, 2023
(updated from original post
on 10/4/2018)
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