Europe’s wireless technology market expected to quadruple
Palo Alto, CA—Defying the adverse impacts of slowing economies, the European market for wireless technologies in industrial applications, valued at approximately $117 million in 2002, is expected to quadruple its revenues between 2003 and 2006, according to a new study by Frost & Sullivan.
Palo Alto, CA— Because they're still at the initial stage of development, wireless technologies for industrial applications continue to make up a highly fragmented market that displays only a vague structure in terms of products, suppliers and applications. Though original proponents and early adopters may be among the only active advocates for wireless products on the factory floor, a new study by Frost & Sullivan found better growth prospects among European wireless technologies intended for industrial applications. Valued at approximately $117 million in 2002, this market's revenues are expected to quadruple between 2003 and 2006, defying the adverse impacts of slowing economies.
However, Europe's wireless market still has some hurdles to overcome before it can truly prosper. Frost & Sullivan adds that user skepticism, as well as concerns about security and reliability, are the main reasons for a prevailing hesitancy about investing in wireless solutions. Widening acceptance has also been hampered by the lack of standards and limited awareness of the technology's capabilities among potential users.
Gabriela Martinho, Frost & Sullivan's industry analyst, believes that players in the device-to-device communications sector can lessen apprehension over security by educating end-users and providing continued security assurance. This restraint might still affect market growth over time, Martinho cautions, as wireless LANs become integrated in WANs, and the need for high security becomes imperative.
The study adds that interoperability of new products in the market will likely contribute to potential customers' increased confidence in the technology and consequently drive overall demand.
Martinho observes that many large automation suppliers have recently entered the market with a limited number of products, and most are still working on product development based on emerging technology standards. Automation manufacturers are preparing for market take-off, and anticipating more stability due to standards and product development.
One of the main challenges facing companies in the wireless market is how to fine tune their solutions to specific vertical markets. So far, only a small percentage of the potential market has been targeted and, instead of focussing on specific areas, suppliers are still looking to reach the most customers.
The number of competitors in the market is small. There are only a few companies offering industrial products, providing full industrial temperature range compatibility, ruggedness, compact design and easy installation and compatibility with existing bus networks.
Frost & Sullivan's reports adds that establishment of partnerships and associations between technology specialists, wireless product developers and industrial automation providers is expected to grow quickly in this market. The synergy created by associations are beneficial, both to automation manufacturers and technology specialist providers.
For example, the partnership established in early 2003 between ABB and connectBlue, was formed to supply the Bluetooth web enabler to ABB divisions and customers world-wide, and follows successful implementation of the Bluetooth web enabler and ABB's 800C control systems by Oslo Municipality, which provides wireless maintenance and operation of the city's water pumping stations.
While the fastest growth is set to be recorded in the automotive sector, the utilities industry held the largest share of revenues with 26.9% in 2003. The buoyancy of the utilities sector is due to its growing customer base and improved water and wastewater requirements. Demand for wireless devices from this industry has been greater than in other sectors because utilities have more confidence in wireless, and have as been using it for years to monitor remote water towers and pumping stations.
Control Engineering Daily News Desk
Jim Montague, news editor