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Position Sensor Market 'Positioned' For Recovery


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These slides are from a webcast presented on 03/28/10.

During this webcast Chris Rezendes, Executive Vice President at VDC Research, discusses the effects of the downturn and the current recovery trends seen in the position sensor market based on the data from our latest study. Specifically, we will cover: A general overview of the photo and proximity sensor and limit switch markets, the linear displacement sensor market and the rotary (non-modular) position sensor market – including market estimates & forecast, competitive landscape and channel estimates; The market perspective on the economic recovery; The potential impact new product introductions will have on the market; and Product/market challenges.

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Position Sensor Market 'Positioned' For Recovery

  1. 1. VDC Research Webcast: Position Sensor Market ‘Positioned’ for Recovery Market Demand Analysis, 9th Edition Global Automation & Control Practice Industrial Chris J. Rezendes – Executive Vice President David A. B. Laing – Senior Analyst
  2. 2. Recording Available These slides are from a webcast presented on 03/28/10 A f ll audio recording is available for download at: full di di i il bl f d l d t 1 –  2010 VDC Research Group, Inc.
  3. 3. VDC Research Group Complimentary marketing data on the Industrial Automation & Control Markets is available on our website at: 2 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice
  4. 4. Today’s Speaker • VDC Research Group  Founded in 1971, continuous, profitable operation for nearly 40 years  Focus on a number of embedded and niche network market segments  1,000 clients annually …90% technology suppliers, tech investors • Ch i Rezendes – E Chris R d Executive Vice President ti Vi P id t  19 years experience in embedded, industrial, defense and other mission critical and high available technology industries  14 years experience in senior management and leadership positions at a number of technology solutions and professional services organizations  2 years DARPA contracting  Chris has advised many of the largest and most respected technology companies in a number of technology segments worldwide  Chris is a graduate of Harvard University 3 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice
  5. 5. Agenda Introduction 2009 Position Sensor Report: Definition & Segmentation General Economic Profile and Forecast, for the Position Sensor Market Product & Technology and Market Trends Competitive Overview C titi O i Closing Remarks Q&A 4 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice
  6. 6. Position Sensor Market Remains a Collection of Segments Multiple technical, M lti l t h i l vertical, regional and application segments – and subsegments ti l i l d li ti t d b t Vertical & Application Markets Asia-Pacific Regional Markets EA A EME Americas Proximity Sensors Photo Sensors Product Limit Switches Type Linear Displacement Sensors Rotary (Non-Modular) Position Sensors 5 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice
  7. 7. Position Commercial Value Chain Changing With Market The i Th rise of the A i markets, and th ECM/ODM community, may b elevating A i ECM/ ODM f th Asia k t d the it be l ti Asian ODMs • There are many layers Materials & Components and possible paths between d ibl th b t position sensor suppliers and the users of their products Manufacturers of Position • The VDC report tracks suppliers Sensors & Limit Switches shipments to the FIRST customer or level of distribution • Hard line arrows represent the Vendor Sales Personnel Manufacturers’ channels making up the majority Representatives / (Field and Agents of shipments Inside) • Dotted lines indicate secondary product channels, but also important communication OEMs and feedback channels Systems Distributors ---------------------- Integrators -Contract Mfg. g • Within the OEM Segment, there g is a growing contract manufacturing element End Users/ Enterprise Deployers 6 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice
  8. 8. Position Market Growth Will Require Agility to Manage... P iti sensing products will experience a strong, b t uneven, th Position i d t ill i t but through 2013 h Overall Position Sensor Market 10,000 ($ M) 9,000  VDC model overall may show ‘smoother’ 8,000 growth generally, 7,000 but … 6,000  Position sensor market segment 5,000 performance will vary 4,000 widely along a number of 3,000 dimensions 2,000  Mil/Aero market is expected to continue 1,000 to be more stable than 0 most despite changes in DoD and international MoD priorities Total Mkt 7 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice
  9. 9. …and Exposure to a Number of Technologies Vi t ll every t h i l segment i growing … and APAC share of each also Virtually technical t is i d h f h l $1,600 $1,400 $1,200 $1,000 APAC $800 EMEA Americas $600 $400 $200 $0 Photo Proximity Limit Switch Linear Rotary Position Displacement 8 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice
  10. 10. Overall, Users Expect 2010 to be a Strong Buy Year However, we expect shipment l H t hi t levels t l b 1 3 quarters from this chart l to lag by 1-3 t f thi h t When will your company’s purchase levels of these products return to previous levels? My Company’s purchase level will not return to the previous level. 3.1% My Company’s purchase level of these items did not decrease. 31.9% My Company did not previously purchase these items. 6.0% In 2015 or Later 2.3% In 2014 0.0% In 2013 1.6% 2nd Half 2012 2.3% 1st Half 2012 3.1% Late 2011 5.2% Mid 2011 6.0% Early 2011 8.3% Late 2010 12.2% Mid 2010 13.5% Early 2010 4.4% 0% 5% 10% 15% 20% 25% 30% 35% 9 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice
  11. 11. The Tension Between Cost and Performance? Expected to go away over time as new products offer increased capability and l E t dt ti d t ff i d bilit d lower cost t New or “high end” Legacy Products Position Sensing Products Customer’s Future Cost Sensor Needs Capability / Reliability 10 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice
  12. 12. One Potential Example: Vision / 3D / Imaging Sensor users are open to new technologies, such as machine vision, with adoption 3X over rejection S t t h l i h hi i i ith d ti j ti Are you using or have you considered using • VDC estimates that the potential market for new different technologies (e.g., machine vision, 3D, and / or Confocal Chromatic) instead of the linear t h l i remains virtually untapped with 36% technologies i i t ll t d ith displacement sensing products specifically actively considering and 44% others that could mentioned in this section? be upside targets for expansion • VDC estimates that the one significant barrier to new technology entrance to the linear Yes we are using them. 15.0% displacement is either the cost of the actual product compared to the incumbent or the adoption / learning curve costs involved in implementation No, but we are considering their 36.4% use. • Response to this question which was posed only to users of linear displacement sensors was optional and the results reflect the 107 (57 End Users and 50 OEM, Int. and Others) that made a No, we are not using them and are 43.9% selection not yet considering their use. After evaluation, we chose not to 4.7% use them. 0% 10% 20% 30% 40% 50% 11 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice
  13. 13. The Persistence of Multiple Technologies? For F most every application there are several product t t li ti th l d t types/categories to consider / t i t id • Other Product Considerations Include: Operating Target • Very High Accuracy Environment Shape, Shape Surface • Long Range g g • High Resolution and • Small Size Color • Durability / Reliability • Low Power Requirements q Cost • High Speed / RPM Capability • Wireless Connectivity Target • QC Functions: Material • Surface, shape, color • Process correction data/feedback • Debug Functions 12 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice
  14. 14. Position Sensor Industry: Competitive Overview Top 3 Proximity Sensor Top 3 Linear Displacement Top 3 Rotary (Non-Modular) Manufacturers Sensor Manufacturers Position Sensor Manufacturers (W/W $M) (W/W $M) (W/W $M) Turck Inc Dr. Johannes Dr. Johannes Heidenhain Heidenhain GMBH GMBH iFM Efector Schneider Electric SA Schneider Electric SA KEYENCE OMRON Electronics, Inc SICK AG CORPORATION 0 500 0 500 0 500 13 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice
  15. 15. Position Sensor Industry: Competitive Overview Top 3 Photoelectric Sensor Manufacturers Top 3 Limit Switch Manufacturers (W/W $M) (W/W $M) ( ) KEYENCE OMRON Electronics, Inc OMRON Schneider Electric SA SICK AG Siemens Industrial Division 0 500 0 500 14 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice
  16. 16. Closing Remarks The l b l Th global position sensor market is still a multi-billion opportunity, and it will grow again iti k t i till lti billi t it d ill i • Virtually all of the vertical markets have declined significantly from the peaks seen in mid-2008 with the sole exception of the military / aerospace market, which is generally governed by long term contracts • China and Brazil are seen as having some of the best growing markets in the near term, but expansion generally requires placing manufacturing facilities inside them. There are multiple reasons for this including economic (labor costs), government-imposed trade restrictions, as well as concerns that today’s business partner could become a future competitor • The military / aero markets – the best performing markets in 2008 and 2009 – are likely to tighten as competing interests for tax revenue will likely be reflected in the kind of stimulus legislation that we are seeing in many regions of the world • In VDC’s estimate, the most realistic picture for economic recovery was seen when users were asked about % increase or decrease of future (next 3 years) sensor purchases  5% thought that purchases would be within +/- 1% of current levels and 25% predicted a modest 2 – 5% increase  Therefore it is best for suppliers to plan for and expect 4% year to year growth from 2011 onward after a modest recovery of 7 – 8% in 2010 15 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice
  17. 17. How will VDC coverage help clients stay on top of the market? Position Sensor Market, 2009 Global Market Demand Analysis , y • VOLUME 1: Proximity and Photoelectric Sensors and Limit Switches • VOLUME 2: Linear Displacement Sensors • VOLUME 3 R t (Non-Modular) P iti S 3: Rotary (N M d l ) Position Sensors ACTUAL MARKET SIZE/SUPPLIER STUDY PUBLICATION DATE FORECAST MARKET SIZE SHARE Service Year 2010 2008/2009 2010-2013 16 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice
  18. 18. Q&A Session Thank You for Attending this VDC Webcast g For more information about VDC Research coverage of the global markets for industrial networking solutions – including the 2009 Position Sensor Market, Global Market Demand Analysis, or the recently p y y published Touch Screen Sensors and Displays Global Market Demand and Customer Requirements Analysis study, please contact: Christopher Rezendes – Executive Vice President p | 508.653.9000 x120 David Laing – Senior Analyst/ Program Manager | 508.653.9000 x146 Tim Shea – Senior Account Executive | 508.653.9000 x132 17 –  2010 VDC Research Group, Inc. Industrial Automation & Control Practice