Market for photoelectric sensors to recover in 2011

Paul Boughton
According to new research from ARC Advisory Group, the market for photoelectric sensors will have negative growth rates in 2009 and 2010 and will afterwards return to its long-run growth path of around five per cent per year. The expected compounded annual growth rate (CAGR) of 1.7 per cent over the next five years represents the impact of the financial crisis. The market was $1099million in 2008 and is forecasted to be over $1198 million in 2013.

Florian Güldner, the principal author of ARC's 'Photoelectric Sensors Worldwide Outlook' report, says: "Those dynamics will lead to further consolidation but also opportunities for sensor companies that have sound financials and customers in industries that are not likely to cut back investments. Additionally, there are numerous technical advancements - including network technologies like IO-Link - that are current or future market drivers and will create sub-segments with high growth rates."

The overall market for photoelectric sensors is highly commoditised; nevertheless, it remains fragmented with a huge number of companies offering substitutes. Particularly, light barriers (excluding fork and angle sensors) are substitutable and the most important factor left to influence the buying decision is the price. In particular, the markets for simple light barriers and standard diffuse sensors lack a clear market leader.

Behind the scenes there are two strategies used by sensor suppliers: modular design and brand labelling. The latter leads to the situation that some automation suppliers only manufacture around 30 per cent of their photoelectric sensors and some companies that supply many others with high-value products are hardly visible in the market.

To be an important player in the sensor market that offers more than just a sensor, but a 'solution,' a company needs to address the question of connectivity. Currently sensors - even high-end sensors - are predominantly connected by a standard cable to the PLC. Recently two companies and organisations have been pushing a new standard; ODVA is pushing Componet and Profibus is pushing IO-Link. Both approach the problem of price pressure differently; while IO-Link adds intelligence and flexibility into a standard three-wire cable, Componet focuses on costs and speed. It is useful to connect the high-end sensors with network technology, and high-end sensors account for roughly 10 per cent of the total sensor market. To address this, IO-Link sends the communication signal across the same three-wire cable used to supply the 24V power to the sensor as the physical layer.

Asia is becoming increasingly important for sensor suppliers because the market is growing due to rising production and a rising percentage of production that is automated. In addition, the market for high-end sensors in Asia still offers a chance to avoid competition. North America will suffer the most from the current crisis due to the overall financial crisis and the dependency on industries that are likely to suffer the most in economic downturns. The regional development is also characterised by sensor suppliers following their customers to new production sites in other countries.

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