Operator Interface Market Outlook Healthy
The North American market for industrial electronic monitors and operator interface terminals totaled $606 million in 1998, and should reach over $946 million in 2003, increasing at a compound annual growth rate (CAGR) of 9.3%. This estimate and forecast is from a recently published market study by Venture Development Corporation (VDC) conducted in cooperation with Control Engineering. The report, 'North American Markets And User Needs for Operator Interfaces & Monitors In Discrete & Process Manufacturing Applications, 3rd Edition', makes a comprehensive and detailed assessment of North American markets for industrial electronic alphanumeric and graphic monitors, and alphanumeric, graphic, and PC based operator interface terminals used in discrete and process manufacturing applications.
Monitors are display-only devices connected to a host computer or controller. Alphanumeric monitors display only text and numbers, while graphic monitors also show graphics.
Operator Interface Terminals have intelligence allowing the user to interact with the unit with input devices. Alphanumeric and graphic operator interface terminals are usually linked to a host computer or controller to receive and display data. PC-based operator interface terminals are a complete personal computer.
The VDC report forecasts growth over the next few years for each of the product categories ranging from under 1% annual growth for alpha-numeric monitors to over 12% growth for PC-based terminals.
Industrial Electronic Monitors
The graphic monitor market, estimated at over $135 million in 1998, is expected to increase at 5.7% CAGR, reaching almost $179 million in 2003. However, the market for alphanumeric monitors is expected to increase at an anemic pace of 0.7% CAGR, rising from just over $15 million in 1998 to about $16 million in 2003.
Demand for graphic monitors is following somewhat the desktop PC market in that people are becoming more accustomed to the graphical user interface (GUI) mode of operation. Furthermore, the emergence of Windows-based factory applications has led to a rapidly expanding market for industrial software applications that are visual, intuitive, easy to configure, and use.
Growth in the graphic monitor market is expected to be further driven by declining prices, the range of technologies available, choices between CRT and flat panel displays, the expanding range of display sizes available, improving resolutions, and the growing availability of monitors with touch screens. Growth in the alphanumeric monitor market is expected to be low as more users choose graphic monitors instead due to the increasing information content required in industrial automation applications.
Operator Interface Terminals
The North American market for alphanumeric operator interface terminals is expected to increase from about $52 million in 1998 to around $59 million in 2003, at a rather sluggish 2.7% CAGR. As with alphanumeric monitors, alphanumeric OI terminals are being displaced by more versatile PC-based terminal equipment. Nonetheless, VDC believes there will continue to be a market in applications requiring limited functionality and low prices.
Graphic operator interface terminal market was $206 million in 1998 and is expected to increase at a 10.2% CAGR, reaching $334 million in 2003. Reasons for high growth include the increasing demand for graphics, broader functionality, declining prices, the continued replacement of electromechanical control panels, and the growing trend towards more 'open' communication network capabilities being provided.
Demand for PC-based operator interface terminals is expected to be the most robust of all the product categories under study. The market for PC based operator interface terminals, estimated at $198 million for 1998, is forecast to increase at a 12.6% CAGR, to over $358 million in 2003. High growth will be driven by the continuing factory automation adoption of PC technologies, as firms prefer the familiarity and wide range of hardware and software options provided by PC-based open platforms. Increasing power and speed of microprocessors and sophisticated new operating systems and software will also contribute to this growth.
(Dollars in Millions)
Trends in Product Features
Shifts to flat panel displays are expected driven by improving brightness, color capability, viewing angles, narrow depth compared to CRT's, and falling prices for these technologies.
Demand for color graphics are expected to increase, particularly for flat panel displays, as cost of color technology falls.
The trend is towards larger displays, both for CRT and flat panel types.
The majority of alphanumeric monitors and O.I. terminals are sold with 1, 2, or 4 text lines. Some shift towards 2-line and 4-line monitors is expected due to message capability and declining prices.
Higher resolution displays, both CRT and flat panel, will become more popular.
LCD-TFT, the most used flat panel technology, is expected to continue to be so as the technology improves and prices continue to decline.
Demand for graphic monitors with touch screens is expected to be quite robust as users find these easier to use, take up less space, and provide 'intuitive' pictorial interface capability.
Resistive and capacitive touch screens are the most used types on graphic monitors, and are expected to remain so, as users like the reliability, and durability of these technologies.
Graphic and PC-based operator interface terminals with touch screens, already extensively used, are expected to capture additional market shares.
Resistive touch screens dominate use on operator interface terminals and are expected to remain so as users like the rugged, dust resistant features, and prices for this technology.
Products with panel mount enclosures dominate the markets for almost all the product categories studied.
A large majority of products are shipped in enclosed housings and are expected to remain so.
Except for graphic monitors, the largest portion of product shipments to North American markets have NEMA ratings. Most popular are NEMA 4, 4X, and 12 ratings. Some increases in NEMA rating market shares are expected.
Data Communication Networks
Ethernet is expected to become the most used communication network with alphanumeric and graphic interface terminals. It already is for PC-based types.
Exhibit 2 shows 1998 and forecast 2003 shares of the North American PC-based operator interface terminal market for discrete and process control applications by the operating systems utilized. Windows NT, Windows CE, and a Next Generation Microsoft O/S [Windows 2000] are expected to be the operating systems principally used with the units purchased in 2003. Reasons for the anticipated Microsoft O/S domination are easy-to-use icon-based menus, large number of software developers, large amount of software already available (and expected to be available), and the strong marketing and business networking conducted by Microsoft and its distributors.
Other reasons for the expected growth of Windows NT are Microsoft's efforts to make Windows NT more plug-and-play, and development of WDM (Win 32 Driver Model) which will provide a common set of I/O services and binary-compatible device drivers for both Windows NT and Next Generation Windows O/Ss.
Reasons for the expected growth in use with Windows CE based operating systems include the following:
WinCE provides a diskless system that tightly integrates with the installed base of Windows platforms in the IT department of corporations;
WinCE is expected to enable operator interface vendors to complement the versatility of their Windows 95, 98, and NT solutions with cheaper, faster, and more robust technology at the lower-end;
WinCE allows the opportunity to integrate individual machine monitoring and control devices with operator interface terminals acting in a supervisory role. By deploying inter-operable technologies at the machine-level, managers can have the same access to information operators have on the factory floor, and can control individual machines remotely;
WinCE has low memory requirements, built-in PCMCIA support, and standardized hardware driver support; and,
WinCE leverages Microsoft Windows' common look and feel, development tools, and cross-platform applications.
However, there are concerns about the real-time performance capabilities of WinCE in monitoring and controlling machinery. This is expected to slow its adoption from even greater penetration than that forecast.
The sharpest declines are expected to be for PC-based OI terminals sold for use with Windows 98, Windows 95, DOS with Windows, and DOS, as users seek out the more inter-operable and more powerful solutions of Windows NT, WinCE, and a Next Generation Microsoft O/S.
For both the industrial electronic monitor and operator interface terminal markets, the shares for OEM/systems integrator applications are expected to increase as end users increasingly out-source factory automation projects to OEMs and systems integrator organizations.
In 1998, the OEM/systems integrator share of consumption was much larger than for end user applications. Consumption of monitors in these OEM/systems integrator applications was relatively evenly split between applications for equipment/machine control and for process controls.
The highest growth rate expectations among OEM/systems integrator applications are in process controls for the oil & gas industry, and for plastics manufacturing, textile manufacturing, metalworking, robotics, and materials handling equipment.
The highest growth rate expectations among end user industries are in telecommunications equipment production, electric power, pharmaceuticals, and military/aerospace equipment production.
Operator Interface Terminals
OEM/systems integrator applications accounted for about 55% of the North American O.I. terminal market in 1998, with about 44% for end user applications. In the OEM/systems integrator segment, equipment/machine controls accounted for almost two thirds. Strong growth is forecast in OEM/systems integrator applications for both process control and equipment machine control applications.
The highest growth rate expectations among the major OEM/systems integrator applications are in process controls for the oil & gas and chemical/petrochemical industries, and for assembly, and material handling equipment.
The highest growth rate expectations in the end user segment are for the pharmaceutical, telecommunications equipment production, electrical/electronics, food & beverage, and medical equipment production industries.
As part of the study, VDC conducted extensive interviews with users (OEMs, system integrators, and end users), and a mail survey (with Control Engineering subscribers) to determine purchasing criteria for industrial electronic monitors and operator interface terminals, and likely purchasing trends. The following summarizes some of these findings:
Product Selection Criteria
For Hardware (see Exhibit 3)-The three most identified product selection criteria for industrial electronic monitors by users were quality/reliability, ruggedness, and ease of use. For the OI terminals it was quality/reliability, ease of interface with system(s), and ruggedness.
For the industrial monitors, quality/reliability, and having a touch screen capability were indicated as increasing in importance.
For alphanumeric and graphic operator interface terminals, ease of interfacing with system(s), and speed were found to be increasing in importance.
For PC based operator interface terminals, ruggedness, and ease of use were found to be increasing in importance.
* Increasing in importance
For Software (see Exhibit 4)-The three most identified product selection criteria for industrial operator interface software by users were compatibility with existing systems, being user friendly, and possessing Windows compatibility.
Ease of programming and versatility/flexibility were seen as increasing in importance among software packages being purchased for use with operator interface products.
In 1998, proprietary programming languages were extensively used with the electronic operator interface terminals purchased. However, less usage of these is expected in the future, with greater usage of Visual Basic, and C++, as well as application software packages such as from Wonderware and Intellution.
* Increasing in importance
For Hardware & Software -A high majority of users want industrial electronic operator interface terminals with self diagnostic capabilities. This also is becoming increasingly important as a selection criteria, as it aids troubleshooting problems, and improves productivity and quality control.
Usage With Controllers
Although there is a growing trend towards industrial electronic monitors and operator interface terminals being purchased for use with PC based controllers, it is expected that the majority of products purchased in 2003 will still be for use with PLCs. The majority of the industrial electronic monitors and operator interface terminals purchased in 1998 in North America for use with PLCs were for the Rockwell Automation Allen-Bradley brand.
'Non-Product' Vendor Selection Criteria
The 'non-product', or commercial, vendor selection criteria most identified for electronic monitors and operator interface terminals by users were price, maintenance support, applications assistance, availability/delivery, and installation support (see Exhibit 5).
The 'non-product' vendor selection criteria for software used with industrial electronic operator interface terminals most identified by users were applications assistance, programming support, price, documentation, and maintenance support (see Exhibit 6).
Most identified by the users as factors driving demand for industrial electronic monitors and operator interface terminals for use in discrete and process manufacturing operations were:
the trend towards greater factory automation as a means of improving productivity and profitability;
the continuing shift away from electromechanical hard wired panels as firms upgrade existing facilities and bring these up to 'modern' standards;
increasing integration between the factory floor and the executive level office as companies try and gain greater competitive edges; and,
a growing need for more thorough information/record keeping from production processes to satisfy government regulations (particularly in some industries), and for use in quality control.
The Venture Development Report 'North American Markets And User Needs for Operator Interfaces & Monitors In Discrete & Process Manufacturing Applications, 3rd Edition', is available for purchase at $4,950.
J. Timothy Shea is a project manager/industry analyst for Venture Development Corporation, a marketing research firm specializing in electronic technology.