1. 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.

2. 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

3. 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

4. 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.

5. 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.

6. Digitizer/Oscilloscope  Revenues in 2003: $28.7 million  Growth Rate Over 2002: -10.9 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.

7. Signal Source Cards  Revenues in 2003: $12.6 million  Growth Rate Over 2002: -13.7 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.

8. 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.

9. 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.

10. 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.

11. 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

12. 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

13. 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

14. 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

15. 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