Agilent Comments on R&D Wireless

| About: Agilent Technologies (A)

On Agilent Technologies' (NYSE:A) Fiscal 3Q conference call, executives discuss wireless and R&D tests:

Adrian Dillon-Vice President Finance and Administration, CFO

... we are winning more business in wireless R&D. More R&D is needed as wireless technologies converge within phones such as adding GPS, MP3 players, YMAX and Bluetooth, increasing the overall complexity of the units and increasing the opportunities for Agilent.

Wireline test orders were down 13% year-to-year, due in part to continued softness in the router test business. Our operations support solutions business was also down year-to-year, with weakness in the Americas due to consolidation in the telecom market and from increasing competitive pressures in our marketplace...

Deane Dray – Goldman Sachs

Okay, and then on the wireless business, you were helpful on breaking out the components of what the new Agilent looks like. Could you give us the next layer of detail on the communication test side, how much is wireline on a percent basis and then, within wireless, roughly how big the handset test market is? R&D tests and may infrastructure tests?

Adrian Dillon

I’ll quickly give you the numbers. Wireless manufacturing is 11% of the company’s revenue. This includes the whole supply chain, not just the final cell phone tests. Wireless R&D is about 8% of our business. Again, these are all year-to-date-type businesses. Wireline is 6%. Wireless monitoring, or the operating systems, is 5%. Software tools to support this industry are 2%, and wireless installation and maintenance is 1%. All of these percentages are the total percentage of Agilent revenue.

Deane Dray – Goldman Sachs

Great, and this last question, on the R&D test side for wireless; I know that’s initiative to increase your business there. Could you give us a sense of what the timing might be and what those initiatives are?

William P. Sullivan- CEO

Well, essentially the market for wireless R&D is actually larger than the market for wireless manufacturing and we have been focusing on providing the tools, the next generation of tools, for engineers to develop the next generation of devices and our growth rate in that segment of the market has been quite good, and we believe over the relatively short period of time that that part of our business can exceed or will exceed our wireless manufacturing business.

Deane Dray – Goldman Sachs

In what timeframe?

William P. Sullivan

Well, if we hopefully do it by the end of next year, I think we’re going to be in great shape.

Deane Dray – Goldman Sachs

Great. Thank you very much...

John Harmon – Needham & Company

... are you adding functionality to your one-box tester or are you developing a brand new instrument for that for the R&D market?

William P. Sullivan

No, well, clearly this instrument can be used in the R&D market, but we have a whole range of instrumentation that will be used inside that market, versus the new generations of sources and spectrum analyzers as well as additional engineering tools to allow engineers to do a better job of designing their products. So again, it’s – we have a very broad offering in this area.


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