Slower growth projected for distributed, remote I/O device market
Natick, MA—An expected increase in worldwide shipments of distributed and remote I/O devices is expected to slow to a 4.5% compound annual growth rate (CAGR) through 2005, rather than a 6.6% CAGR projected two year ago, according to a new study, 'Global Market Demand and User Requirements for Industrial Distributed/Remote I/O, Third Edition,' by Venture Development Corp. (VDC).
Natick, MA— The combined worldwide market for distributed and remote I/O products totaled about $2.5 billion in 2002, which consists of a little over 50% or $1.26 billion for products used with programmable logic controller (PLC) systems; 36.5% or $913 million for distributed control systems (DCSs); and 13.4% or $335 million for use with personal computer (PC)-based control systems, according to a new study, 'Global Market Demand and User Requirements for Industrial Distributed/Remote I/O, Third Edition,' by Venture Development Corp. (VDC).
Although distributed or remote I/O devices for PC-based controls is the market’s smallest segment, it’s projected to have the greatest growth. Products for DCS applications are expected to have the least growth because they’re being displaced by both PC-based control systems and PLC systems. Some market displacement of PLC systems by PC-based systems also is expected during the study’s forecast period. Other factors influencing the forecasts in VDC’s study include:
Growing acceptance of distributed/remote I/O as a means of reducing the costs associated with hard wiring of devices to local I/O at controllers;
Growing implementation of factory automation, including controls with distributed/remote I/O, particularly in China and other under developed countries; and
Expected trends in specific industries and applications where distributed/remote I/O is used, as well as economic trends in global markets.
The study also found that declines in the average selling prices for the three product classes are expected. Factors contributing to these trends include increasing standardization of products, declining prices of electronic components, stronger price competition, and increasing pressure from larger OEM customers seeking lower-priced products.
Market growth moderating
The overall growth forecast for the distributed and remote I/O markets, including some of the more significant trends, were found to be more moderate in the present study than in VDC's last examination and analysis conducted in 2001. For example, the previous study projected that total worldwide shipments of distributed and remote I/O devices would increase at a compound annual growth rate (CAGR) of 6.6% through 2005. However, VDC’s more recent study forecasts a 4.5% CAGR through 2005.
Although the market segment for PC-based control systems continues to be the fastest growing remote and distributed I/O segment, the rate forecast in this latest study is lower than it was in the 2001 study. The previous study found that PC-based products accounted for 13.2% of the market in 2000 and an expected increase to 19.4% of the market in 2005. However, the PC-based share of the market only increased to 13.4% in 2002, and is now expected to account for about 14% of the total in 2005.
In addition, the 2003 study found less expected displacement than the previous study of products with interface bus/networks having proprietary protocols by those with open protocols. Finally, both suppliers and users have reeled in their former overly optimistic projections about growth rates and these usage trends. Contributing to this is an overall economic climate limiting adoption of new or different technologies. It is presently unclear whether these forecasts represent long term slowing in market’s growth or more short-term impact of unfavorable economic conditions.
For more inforamtion about VDC's report, visit www.vdc-corp.com/industrial/reports/03/br03-07.html .
Control Engineering Daily News Desk
Jim Montague, news editor