More Moderate Growth and Trend Expectations for Industrial Distributed/Remote I/O Market

Natick, Massachusetts - A new study from Venture Development Corporation (VDC) titled "Global Market Demand and User Requirements for Industrial Distributed/Remote I/O, Third Edition" finds the combined worldwide market for these products totaled about $2.5 billion in 2002. A little over 50% on the total was in products for use with Programmable Logic Controller (PLC) systems, with 36.5% for use with Distributed Control Systems (DCSs), and 13.4% for use with personal computer (PC)-based control systems (see below).

Worldwide Shipments of Distributed/Remote I/O in 2002 for Use With DCSs, PC-Based Control Systems and PLC Systems ($ in Millions)

For PLC Systems: 1257

For DCSs: 913

For PC-Based Control Systems: 335

Distributed/remote I/O for PC-based control systems is the smallest segment, but is forecast to have the highest growth rate. Products for DCS applications are forecast to have the lowest growth rate as these are being displaced by both PC-based control systems and PLC systems. Some market displacement for PLC systems by those for PC-based control systems also is expected during the forecast period.

Additional factors influencing the forecasts in this report include:

- The 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

- The growing implementation of factory automation, including controls with distributed/remote I/O, particularly in China and other under developed countries

- Expected trends in specific industries and applications where distributed/remote I/O is used, as well as economic trends in global markets

Declines in the average selling prices for all 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 TRENDS

The overall growth forecast for the market, and some of the more significant trends, are more moderate in the current study than in VDC?s last study conducted in 2001:

- The previous study forecast a compound annual growth rate (CAGR) in total worldwide shipments through 2005 of 6.6%. The newer study forecasts a 4.5% CAGR through 2005.

- Although the market segment for PC-base control systems continues to be the fastest growing segment, the forecast in this study is lower than that in the previous study. The previous study found these products accounted for 13.2% of the market in 2000 with a forecast increase to 19.4% of the market in 2005. The share only increased to 13.4% in 2002, and is now forecast to account for about 14% of the total in 2005.

- Regarding shipments shares with interfacing for the various buses/networks connecting the products to controllers, the current study found less expected displacement of products with interface bus/networks having proprietary protocols by those with open protocols than in the previous study.

Both suppliers and users have reeled in their previous over optimistic projections about growth rates and these usage trends. Contributing to this is the overall economic climate that is limiting adoption of new or different technologies. It is unclear at this time to what extent these forecasts represent long term slowing in the market growth rate and these trends, versus more short term impact of unfavorable economic conditions.

Venture Development Corporation is a technology research and management consulting firm serving the worldwide industrial automation, instrumentation, electronic components, computers and peripherals, communications, and consumer electronics industries.

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