Telecoms fuel demand for dc power systems
Although many factors can be attributed to the growing demand for dc power systems in Europe, the adoption of new technologies by the telecom sector - particularly wireless and wireline applications which require dc systems to power their needs, mostly in the small and medium power levels - will be a key market driver.
The European dc power systems market is estimated to grow at a cumulative growth rate of over 7 per cent during 2006 to 2013, with telecom end-users showing the highest growth rate.
Frost & Sullivan finds that the European DC Power Systems Market earned revenues of 545.9 million Euros in 2006 and estimates this to reach 886.9 million Euros in 2013.
“The accelerated deployment of high-speed Internet access networks, triple play, roll-out of fixed lines, high broadband penetration, IP networking and adoption of new technologies will boost demand for backup power DC systems,” says Frost & Sullivan Research Analyst Mahesh Venkateswaran. “Demand in equipment size will vary according to the application, with a large part of the demand deriving from small and medium systems below 15 kW.”
The biggest challenge for dc power system manufacturers will be to stay competitive amid the changing pricing pressure. This pricing pressure will come in two ways – firstly, from the varying cost of components that make up the complete system (rectifier and copper among others) and secondly, from low cost competitors in the market.
“While the price of rectifiers has fallen by approximately 20 to 30 per cent in the last year, the price of copper, used for wiring in the system, has risen nearly two-fold in the market,” explains Mr. Venkateshwaran. “Considering batteries are sometimes supplied by the major manufacturers, their cost will also affect the overall pricing.”
Strategies to counter this challenge include manufacturing in low-cost countries, design optimisation to reduce usage of copper and sheet metal, incorporation of more features, improvement of post-sales services and the provison of comprehensive solutions.
Besides, while raw material prices might affect all competitors in the same way, the impact of low-cost manufacturers entering the market will impact Europe-based participants. Currently, low-cost manufacturers are not the preferred choice due to their low product quality and weak service networks. Over time, however, they threaten to capture a sizeable share of the market.
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