Replacement Market Should Bolster Automatic Vehicle Location Industry

    SAN JOSE, Calif.--Feb. 12, 2001--The projected growth of the automatic vehicle location (AVL) systems market is a boon to both present and future market growth.
    Even as the markets reach a saturation point, replacement parts will represent a golden opportunity far into the future.
    New strategic insight from Frost & Sullivan (www.frost.com), "North American Automatic Vehicle Location Hardware and Service Markets," reveals this industry generated revenues of nearly $500 million in 1999. Frost & Sullivan projects revenues to grow aggressively, surpassing $3 billion by 2007.
    Strong economic growth and customers' growing reliance on just-in-time delivery are largely responsible for the growing number of delivery vehicles in use, which in turn expands the potential market for AVL systems.
    A growing market results in high demand for products, but as demand is met, the need for new products becomes less important; enter manufacturers and suppliers of replacement parts. Towards the end of the forecast period, as demand for new products slows, the replacement segment should experience a significant upturn in demand and sales.
    "To date, virtually all units sold have been for first-time use," says Frost & Sullivan industry expert Joerg Dittmer. "As these units age and become technologically outdated, a replacement cycle can be expected to kick in. This should sustain demand even when the major market segments are satiated."
    Market participants that target one niche market and develop and design unique systems should also dedicate a product line to innovative replacement parts for those systems.
    "An attempt to develop a generic product for multiple applications would likely fail," says Dittmer. "A product that is everyone's second choice will see few sales."
    While the AVL market in the long-haul trucking industry is already well established there are several other segments where these solutions are just beginning to penetrate. Manufacturers and providers that target these emerging segments can position themselves to take advantage of the replacement market in the future.
    "The local-use fleet and trailer divisions are ready for tremendous growth due to the success of AVL systems in long-haul use," says Dittmer. "There are also many sub-divisions in the local-use area, including prime sectors like government and mass transit vehicles."
    Frost & Sullivan presents the 2000 Marketing Engineering Awards to companies that have worked hard to make a positive contribution to the North American AVL hardware and service industry. The Market Leadership Award is presented to Qualcomm Inc. . The Product Line Strategy Award is given to @Track Communications. @Road is the recipient of the Growth Strategy Award. McCarney Technologies Inc. has earned the Strategic Alliance Innovation Award. The Market Penetration Award goes to Terion Inc.
    Companies that participated within this industry include: @Road Incorporated; @Track Ccommunications Incorporated; air-trak.com; AirIQ Incorporated; ARINC Incorporated; AVeL-TECH Incorporated; AVL Information Systems Incorporated (AVLIS); AVL Systems Limited; Cadec Corporation; Cimarron Technologies Corporation; Comtech Mobile Datacom Corporation; Digital Dispatch Systems Incorporated (DDS); Eaton Corporation; FleetBoss; FleeTrak; Hyperdyne Incorporated; IDA Corporation; Integrated Systems Research Corporation (ISR); McCarney Technologies Incorporated; Mentor Engineering; Motient Corporation; Nexterna; Nexu; Telocation Limited; Orbcomm Global LP; PeopleNet Communications Corporation; Qualcomm Incorporated; Radio Satellite Integrators Incorporated; Teletrac Incorporated; Terion Incorporated; Trimble navigation Limited; Vantage Tracking Solutions; Veridian Engineering; Vistar Datacom; WhereNet Corporation, and Wireless Data Solutions Incorporated.
    Related companies include: Aether Systems Incorporated; ATX Technologies Incorporated; Diagnostic Hotline; Eaton Corporation; Globalstar; Inmarsat; Intelsat; LoJack Corporation; Microgistics Incorporated; OnStar; Teledesic LLC; TMI Communications; and WitsEnd Software.