Frost: Price, Differentiation, Production Cost Key in DC Power Systems Market
November 25, 2008 // Published as a news service by IHS
| |
| Electronics & Telecom Docs |
IHS sells a full selection of standards documents & collections from the industry's top organizations.
To learn more, and for a free quote, please complete the form below. |
|
| |
Demand for direct current (DC) systems is rapidly growing across Southeast Asia, especially in the low and medium power-level segments.
According to Frost & Sullivan, the booming telecommunications sector is one of the primary contributors to this momentum.
Widespread deployment of high-speed Internet transmission in wireline applications and the huge rollout of wireless applications in Indonesia, Thailand, the Philippines and Vietnam will keep growth levels on an upward trajectory in the region, analysts said.
However, the market is extremely price-sensitive and manufacturers with the capability to provide efficient lead time, along with competitive pricing, will find favor among end-users.
Recent analysis from Frost & Sullivan of the Southeast Asian DC power systems market found earned revenues exceeding $404.2 million in 2007, with estimates to reach $1.12 billion in 2014.
"Global system for mobile communication (GSM) has the highest contribution for DC power systems in the telecom industry," said Frost & Sullivan research analyst Teoh Chew Yew.
"Vietnam and Indonesia have emerged at the forefront of market development, largely due to their low mobile penetration rates of below 44.0% and 7.0% respectively."
Other end-user sectors that have contributed to market progression are the oil and gas, marine, manufacturing and military segments. In Indonesia, Malaysia and Vietnam, the oil and gas sector has helped sustain the tempo of development with huge demand arising from the supply of power to the additional communications systems and power distribution to new platforms and vessels, analysts said.
While DC power systems with integrated solar power were introduced into the market to provide systems more in tune with environmental regulations, cost-efficiency remains the primary concern for end-users. Analysts said along with government initiatives and schemes to promote the green approach, market participants are placing a great deal of emphasis on cost-effectiveness.
One reason for this is the volatility of prices for raw materials like copper and lead. Analysts said this erodes profit margins for manufacturers, even as they focus on competitive pricing to sustain market share. The average price per watt, per unit has shown a marked decrease over the past five years, declining from $5.00 to below $0.20 per watt, per unit, depending on system specification.
To overcome pricing pressure, manufacturers - especially in the telecom sector - are exploring other options such as design outsourcing or establishing manufacturing bases in China. Analysts said establishing and nurturing partnerships with local manufacturers, value-added resellers and distributors will also help participants in business promotion and divergence.
"Manufacturers are striving hard to widen their portfolio of products and develop DC power systems that offer higher power density, lower power dissipation and smaller footprint," said Chew Yew. "Ultimately, the combination of efficient lead time and competitive pricing will provide a potent mix for successful business outcomes."
Source: Frost & Sullivan.