Altitude encoders are the doorstops of the avionics world. You have to have one, but don’t expect a sweep through the list of available hardware to yield impressive lists of features and capabilities. After all, all the gadgets do is electronically deliver altitude data to a transponder that then reports your altitude to ATC—Mode C.
Although encoders are a backwater market of sorts, the technology has inevitably been impacted by two developments in avionics: the air data computer and the slow-motion breaking wave of ADS-B. Taken together, these two developments have ignited a trend toward either using ADC boxes for transponder altitude information or incorporating the encoding function into the transponder itself. Not many new airplanes have discrete encoders these days.