The wireless technologies for industrial applications market remains highly fragmented, displaying only a vague structure in terms of products, suppliers and applications.

Original proponents and early adopters may so far be the only active advocates for wireless products on the factory floor, but a study by Frost and Sullivan points to bright growth prospects in the European wireless technologies for industrial applications market.
Valued at about USA$117.0 million in 2002, revenues are set to quadruple between 2003 and 2006, defying the impact of a slowing economy. However, the market still has a number of hurdles to overcome before it can truly prosper. Frost and Sullivan cites user scepticism and concerns over security and reliability as the key forces behind the hesitancy in investments for wireless solutions. Acceptance has also been hampered by the lack of standards and limited awareness of the technology's capabilities among customers.
Gabriela Martinho, industry analyst at Frost and Sullivan, believes that players in the device-to-device communications sector can successfully clear the obstacle of apprehension over security by educating end users and providing evidence of continued security assurance. This restraint might still affect market growth over time, Martinho cautions, as wireless LANs become integrated in WANs, and the need for high security becomes imperative.
The study asserts that the interoperability of new products is likely to contribute to potential customers' increased confidence in the technology and consequently drive overall demand. The main impetus for future growth derives from the rising need for productivity and cost reduction. As prices of wireless products decline, the benefits associated with these solutions in terms of mobility and flexibility, along with easier installation and reduction in both materials and overall cost, will stimulate greater interest.
Martinho observes that numerous large automation suppliers have recently entered the market with a limited number of products, and most are still working on product development based on emerging technology standards. Automation manufacturers are readying themselves for market takeoff, anticipating a much more stable market in terms of standards and product development, she believes.
One of the main challenges facing companies is to fine-tune their offerings to particular vertical market markets. So far, only a small per centage of the potential market has been targeted and, instead of focusing on specific areas, suppliers are still looking to reach the highest possible range of customers.
The number of competitors in the market is low; in terms of technology specialists, there are only a few companies offering industrial products, providing full industrial temperature range compatibility, ruggedness, compact design and easy installation and compatibility with existing bus networks. The establishment of partnerships and associations between technology specialists, wireless product developers and industrial automation providers is anticipated to be a fast growing trend in this market. The synergy created through associations is beneficial both to automation manufacturers and technology specialist providers.
Although the fastest growth is set to be recorded in the automotive sector, the utilities industry held the largest share of revenues in 2002 with 26.9 per cent. The buoyancy of the utilities sector is due to the increasing customer base and improved water and wastewater requirements. Demand for wireless devices from this industry has been higher than in other sectors due to a greater confidence in the technology, as wireless has been used for some years to monitor remote water towers and pumping stations.
In overall terms, the European market for wireless technologies in industrial applications is at the development stage, but is expected to see a significant and sustained rise in demand and revenues in the next years. Growth should be driven by wider understanding and acceptance of the technology, more competitive price levels, greater market transparency as well as increased use of wireless solutions across a wider variety of industry sectors.

For more information, visit www.frost.com