Market Diversification Creates a Plethora of Opportunities for Vendors in Power Inverter Markets

PALO ALTO, Calif.--Sept. 15, 2004--One of the prominent characteristics of the global power inverter markets is the distinct segregation of vendors based on end-user segments. This increases their dependency on a particular segment and makes them susceptible to the peculiar market trends.

New analysis from Frost & Sullivan (www.powersupplies.frost.com), World Power Inverter Markets, reveals that the market earned revenue of $1.89 billion in 2003. It is estimated to reach $6.05 billion in 2010.

The ill effects of segregation have been demonstrated by the telecommunications inverters market, which faced the brunt of the slowdown in its end-user market.

By diversifying, vendors can take advantage of the opportunities in other segments, thereby buffering the negative effects of a slump in their primary market. This is likely to be a sound strategy considering that all end-user segments are expected to grow robustly.

"Moreover, focusing on a certain market and specializing on a specific product will make it difficult to develop novel products and penetrate new markets," says Frost & Sullivan Research Analyst G.V.Suryanarayana Raju. "If vendors make concerted efforts in research and development, they can prevent this factor from restraining revenues and make full use of various markets' potential."

The solar energy market is one such lucrative area. Government incentives and subsidies to the solar energy market are expected to create derived demand for the inverters used in these systems.

At the same time, over-dependence on the solar energy market can be detrimental in the eventuality of the governments withdrawing support to the renewable energy sector. Without external backing, the solar energy market is unlikely to be as economical as conventional power generation methods in power generation.

"Vendors must achieve self-sustenance through cheaper system development and economies of scale to avoid a market collapse," notes Raju. "Collaboration with solar system manufacturers and integrators to reduce costs will also make the systems more appealing, even without government subsidies."

Meanwhile, retail end-user markets for the automotive and general-purpose segment are covering a lot of ground in the North American market due to widespread customer awareness campaigns. Clever positioning of the inverters in retail and specialty stores has ensured visibility, and thereby, improved sales.

With inverters finding major applications in domestic setups, vendors are likely to have to establish strong distribution networks to enhance the availability of the product.

There has also been a surge in demand for inverters from developing areas such as the Asia Pacific region, where telecommunications networks have been expanding. This has created a corresponding need for continuous power provided by inverters to ensure smoother working of the telecommunication equipment.

The U.S. Federal Government has taken note of this requirement and has been indirectly aiding the inverter market by providing financial assistance to grid-tied systems. However, many countries do not share this enthusiasm and have many stringent 'anti-islanding' norms that prevent feeding power to the grid -- thereby reducing the demand for inverters.

"Vendors can stay ahead of this challenge by constantly interacting with utility authorities and policy makers so that they can be prepared for possible changes in the regional laws," observes Raju. "They should also maintain a proper product development resource to help them adjust to the power needs of the utility."

World Power Inverter Markets, part of the Power Quality Subscription, provides an overview of the global power inverter markets. The study is segmented into non-renewable energy-based inverters, non-renewable energy-based inverters/chargers, and renewable energy-based inverters and inverters/chargers markets. The research focuses on the unit shipment, revenue forecasts, distribution structure, and market share analyses for all these segments. Interviews and executive summaries are available to the press.

If you are interested in an analysis overview which provides manufacturers, end-users and other industry participants an overview, summary, challenges and latest coverage of the World Power Inverter Markets, send an email to Julia Paulson - North American Corporate Communications at jpaulson@frost.com with the following information: Full name, Company Name, Title, Contact Tel Number, Contact Fax Number, Email. Upon receipt of the above information, an overview will be emailed to you.

Frost & Sullivan, an international growth consultancy, has been supporting clients' expansion for more than four decades. Our market expertise covers a broad spectrum of industries, while our portfolio of advisory competencies includes custom strategic consulting, market intelligence, and management training. Our mission is to forge partnerships with our clients' management teams to deliver market insights and to create value and drive growth through innovative approaches. Frost & Sullivan's network of consultants, industry experts, corporate trainers, and support staff spans the globe with offices in every major country.

World Power Inverter Markets

A791

Keywords in this release: power inverter, world, non-renewable energy-based inverter, non-renewable energy based inverter/charger, renewable energy-based inverter, solar energy, anti-islanding, grid-tied systems