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This paper describes a hardware implementation of an ATM Adaptation Layer (AAL) type 2 receiver. The simulation performance of the developed prototype is measured with real AAL type 2 encoded material and compared to two software-based AAL type 2 receiver implementations. The advantages and disadvantages of hardware-based and software-based simulation approaches in product development and prototyping are discussed. It is concluded that simulating a communication block directly in hardware both speeds up the simulations and decreases the development time.