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Teal Group Forecasts Raytheon to Lead $381 Billion Defense Electronics Market

Posted on: Thursday, 18 June 2009, 00:00 CDT

PARIS, June 18 /PRNewswire-USNewswire/ -- Raytheon will lead a $381 billion defense electronics market over the next ten years, according to a series of six Market Overviews released today by Teal Group Corp. of Fairfax, Virginia. The overviews analyze the C4I, electro-optics (EO), electronic warfare (EW), radar, and sonar markets, and a summary overview, with an emphasis on the U.S. market.

The largest defense electronics market sector will be C4I ($100.7 billion), followed by radar ($90.4 billion), EW ($77.8 billion), and EO ($73.8 billion). The highest growth rates will be - perhaps surprisingly - in electronic warfare, with CAGRs of 8.1% (5-year) and 5.3% (10-year).

In a major turnaround from the past two decades, EW will offer the best opportunities for both growth and value, as part of an overall market shift toward C4ISR. According to Dr. David L. Rockwell, Teal Group's Senior Electronics Analyst, "faced with real casualties, electronics funding is again turning to EW."

Forecast Highlights

+ Raytheon, Northrop Grumman, Lockheed Martin, and to a lesser extent BAE Systems will control the defense electronics market with nearly 50% of prime contracts. Raytheon will lead by a substantial margin, with $66.9 billion, number one in C4I, EO, and radar markets, number two in sonar, and fourth in EW.

+ Northrop Grumman will place a reasonably close second overall, with $51.4 billion in funding, based on leadership in EW, a strong second in radar (half of Northrop's total forecast funding), and fourth places in C4I and EO.

+ In airborne systems, Northrop will actually be number one, ahead of Raytheon, with a large lead in airborne radars and EW. Lockheed Martin will show a close third, absent from many market sectors but dominant in others, especially airborne fighter and attack helicopter targeting systems and naval radar.

+ Lockheed will lead the sonar market due to its already dominant A-RCI program, and place a close second in C4I. Total Lockheed value: $45.6 billion.

+ BAE Systems will follow Lockheed in fourth, with less than half its funding. BAE will earn $19.3 billion, due primarily to its strength in EW (a close #2 to Northrop).

+ Only one other prime competitor will exceed 2% of the total market, U.S. EW manufacturer ITT, with $9.1 billion (2.4%). Three other U.S. primes will earn more than $5 billion - Boeing, L-3 Communications, and DRS. Note, however, that many of these companies, especially outside the Big Three, will earn considerable additional funding as subcontractors.

+ Perhaps more valuable to European firms is Teal's analysis of the 26.7% of the market that is still available to new primes - a value of $101.7 billion. And a much higher share than this 26.7% will be available for international subcontractors.

Teal Group's Military Electronics Briefing includes almost 200 in-depth reports on the world's top defense electronics programs (with an emphasis on the U.S. market). Teal Group's six Market Overviews, released on 18 June 2009 as part of the 1,350 page MEB, compile dozens of forecasts in each market segment. (For further details, contact your local Teal Group sales representative at www.tealgroup.com.)

"Teal Group's analysis is based on detailed forecasts of individual programs," said Dr. Rockwell, "brought together into cumulative market overviews, not guesswork breakouts from top line government funding which often does not discuss individual electronics programs."

Teal Group is an aerospace analysis firm based in Fairfax, Virginia USA. It provides competitive intelligence to industry and government worldwide.

SOURCE Teal Group

Source: PR Newswire

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