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September 20, 2006: According to a new analysis by Forecast International, an
estimated $8.1 billion will be spent over the next 10 years on the
development and production of key EO systems. “The Market for Land and
Sea-Based EO Systems” reports that, through 2015, an estimated 566,586
units will be produced – 339,696 systems from 2006-2010 and 226,890
systems from 2011-2015. “Many of the leading systems in
this analysis are being produced and procured in the highest numbers
in their history,” said Andrew Dardine, Forecast International’s EO
Systems Analyst and author of the analysis. “The immediate needs of a
large number of deployed military forces are likely to shape the
direction of this segment of the defense electronics industry for many
years to come.” As in previous years, it is the U.S.,
whose military forces are deeply engaged in fighting in Iraq and
Afghanistan, that is driving the incredible demand for key EO systems.
“The very nature of this persistent fighting has forced military
planners not only to ask for huge supplemental budget increases to pay
for the procurement of needed systems today, but also to plan for
long-term needs for the systems over the next several years,” said
Dardine. Raytheon and ITT are expected to continue to
strengthen their market presence in the years ahead based on the
remarkable recent success of two of their systems: respectively, the
PAS-13 thermal weapon sight (TWS) and the PVS-14 night vision goggle.
Such is the enormous demand for these two systems, and so important is
their role in providing security forces with essential capabilities,
that the government of Saudi Arabia highlighted them in its recent
announcement that it is seeking some $6 billion worth of U.S.-produced
defense equipment.
The market for these two systems alone in the U.S. constitutes a major
portion of the land and sea-based EO segment in this analysis.
Combined, some 455,000 units having a value of $1.5 billion are
expected to be produced over the next 10 years. ITT, in late 2005, won
a major portion of a sweeping U.S. Army Omnibus procurement contract
for production of a variety of night vision devices, especially the
PVS-14. The five-year order is valued at $1.4 billion.
The other companies in the top-five ranking of this
analysis, Northrop Grumman, Thales, and Australia’s Electro-Optical
Systems Holdings Ltd, are also in the position of developing and
producing advanced EO systems that are designed to provide unique
capabilities for a variety of applications. Thales was
involved in the early development of an emerging, sea-based,
long-range infrared search-and-track system called SIRIUS. Primary
production of the system was expected to be handed off to DRS
Technologies after the award of a $142 million development contract in
April 2006. This system is most notable for the fact that it may be
one of the first major naval-based EO systems designed and deployed
specifically to address the threat of terrorists using small craft to
carry out attacks. Already due to be in service with the navies of
Canada and the Netherlands, SIRIUS is also of serious interest to
Austria, Germany and South Korea. |
