View From The Top with Stephen Barthelmes, Jr.

After weathering through two of the worst years in our history, we have seen strong growth in several niche markets. Although we haven’t seen the growth that was expected, the military market has provided new opportunities which were unavailable only a few years ago. The wireless market is picking up overseas, with the US market seemingly right behind. Overall, the high-tech electronics industry has stabilized after three years of decline.

Q: What new product has your company introduced this year that you’re most excited about?
A: A new product that has us most excited is our SM02932-58. The operating frequency of this amplifier is 290-320 MHz and the average output power with two (2) tones and -30 dBc of intermodulation products is 200 Watts. This amplifier has allowed us to enter the military market and create a strong presence in a relatively short period of time. Plus many of our lower frequency designs are based upon this design, which can be broken up into smaller power building blocks for varied applications. As a company who has been largely focused upon commercial wireless applications since our inception, it is very significant for us to be involved in a critical military program.

Q: In your opinion, which military or commercial product category may show the most growth in the coming year and why?
A: The product category that will show the most growth in the coming year may be the 700 MHz band, which was recently opened up by the FCC. Of particular interest is the 764 to 806 MHz public safety band. It is now becoming necessary for our police force to utilize new technology such as OFDM for two way data transmission. In addition, the military will probably use this band as well for homeland security. Private companies will also be able to buy licenses in the 700-800 MHz band for a fraction of what licenses have cost in the past. The reason why new frequency allocations have not been very successful in the past is because the bands were available at auction for prohibitively high prices. This will be the band to watch in the near future.

Q: Now that U.S. handset sales have been increasing, would you credit handset innovations, lowered cost of service plans, or something else entirely?
A: Handset innovations are certainly the reason for the rise in U.S. sales. New models are geared towards the 16-25 year old sector. Light-weight, color screens, digital cameras, games, downloadable extras are all marketed towards the younger generations. The percentage of teenagers who have state-of-the-art handsets has increased dramatically, while their parents are content with older technology. Also since the U.S. is behind in 3G implementation, updated phones will temporarily mask the lack of improved service.

Q: In which part of the world do you see the most growth potential for your products/services?
A: The most growth potential for the upcoming year will be in the Far East and Europe. Trials with 3G- type networks have successfully been completed and implementation of country-wide networks has already begun. Although market studies have shown that service providers will have a difficult time recouping capital expenditures, 3G networks will inevitably be implemented worldwide. These systems will create strong demand for infrastructure products such as amplifiers and filters for new basestations and repeaters. The companies who continue to invest R&D dollars into serving these markets will be successful. The United States will follow, as usual, as the demand for wireless two-way data transmission strengthens. We have already seen strong growth in Europe and Asia within the last year, while the US market has remained flat. While it makes some companies nervous to depend upon the overseas market for a large percentage of their revenue, it is necessary in these difficult times.

Q: Finally, what do you think the next “killer app” will be?
A: The next “killer app” will be the new generation of wireless products working over the internet. Although the next generation of phone service is being implemented, the internet has only provided a fraction of its potential functionality. People are currently shopping, paying bills, chatting and searching on databases but have yet to see their daily lives changed by the internet. In the future, we will be linked in order to remotely control industrial and domestic functions. People will to be able to turn up the heat and turn the lights on just before arriving home. Companies will be able to remotely control machinery or other industrial functions. True connectivity is the next step.