I have always prided myself for not being one of "those" analysts that would publish "hype" forecasts of a product or technology market - think Internet boom in late 1990s/early 2000s. I vowed to myself that I would "always tell it like it is" no matter what the cost be it may.
But as the topic of a new Wireless Sensor Network related study began to percolate within our business development planning I felt compelled to dig into the study archives and see if I did in fact "walk the talk" when it comes to objective forecasting.
In 2001-2002 I was the lead Analyst working on VDC's first North American Market for Wireless Monitoring and Control in Discrete and Process Manufacturing Applications report (circa 3/2002). Based on strong user feedback we forecast an eye popping growth rate of 47% CAGR through 2006, albeit from a base of just under $109 million in 2001, across the seven product categories under study.
Our 2005 Report Edition indicated that I apparently succumbed to some of the hype in developing our forecast back in 2002 (or we overstated base year 2001 shipments) as our base year data in 2004 was just over $154 million, representing a CAGR of only 12% from 2001. Despite the user respondents optimistic outlook back in 2002 it is clear that wireless connectivity was not ready for prime time. Concerns such as reliability, security and a less than expected rapid price decline due to lower volumes were real world issues that impeded more widespread adoption.
It seems that the Analyst team working on our 2005 Edition was helped by the maturation of the market and user base which was becoming more comfortable with wireless technology; or perhaps those Analysts simply had a better crystal ball. Their forecast in 2005 of a 40% CAGR through 2007 to $419 million proved closer to reality as our 2008 Wireless Monitoring & Control Products report indicated wireless shipments to North America reached $348 million in 2007, representing a much close 31.1% CAGR.
You are probably asking about what has any of this diatribe on wireless monitoring and control research have to do with our recently published 2010 Industrial Networking Infrastructure Products research covering user requirements and channel analysis. My forecasts for the soon to be published Track 2: Competitive Analysis, Volume 1: Global Wireless Industrial Networking Product report will be even more robust than those published in 2008.
But my forecast will once again be based on extensive end user and channel feedback that is provided for in the recently published Track 1: User Requirements and Channel Analysis, Volume 1: Wireless Industrial Networking Products report. Feedback which expressed the positive impact of "pent up" demand as the economy comes out of the 2nd worse recession in American history coupled with overall greater adoption and confidence in wireless networks to handle a growing number of industrial automation applications.
Technology and standards development are playing a major role in improving that confidence level and certainly in driving greater adoption in all applications, real control notwithstanding. I think my crystal ball now will not be impacted by "hype" as it was years ago; I think the market is ripe for real wireless infrastructure network adoption.
The following exhibit is a small sample of some of the reasons users indicated were driving greater demand for and adoption of wireless infrastructure products for use in industrial applications. It should be noted that the share of respondents citing reasons for greater wireless adoption increased across the board from our 2008 data and, in most cases, the share of respondents citing reasons for wireline adoption remained flat or declined.
For example the percentage share of respondents citing wireless provides solutions where wireline impossible or impractical was 44% in 2008, an increase of 18%. The percentage share of respondents indicating wireless is easier/quicker to install was only 30% in 2008, an increase of 33%. In 2008 52% of respondents felt wireline was more reliable and 43% cited the greater familiarity as being a factor in decision-making.
Of course I am shamelessly thinking about how we can tap into the current buzz on "smart grid" and work that anlge into the research scope for this latest wireless sensor network update, thereby perhaps violating my own personal principle of not falling prey to the hype. But when push comes to shove I am more of a pragmatist than an idealist.
I welcome the opportunity to discuss your thoughts, perspectives, opinions or specific need as it may relate to comprehensive and actionable market intelligence on wireless infrastructure products, wireless monitoring and control products (especially those involving smart grid applications) or anything else related to wireless sensing, networking, data acquisition or simply industrial automation.
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