Industrial PCs Worldwide Outlook

MARKET ANALYSIS AND FORECAST THROUGH 2014

Project Team: Florian Güldner David Humphrey Paul Miller

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Industrial PCs Worldwide Outlook • Table of Contents

Table of Contents
List of Figures ............................................................................................................................................. A ARC Services ................................................................................................................................................ a 1. Executive Overview .......................................................................................................................... 1-1 2. Scope .................................................................................................................................................... 2-1 Key Issues Researched .........................................................................................................2-2 Manufacturing and Non-Manufacturing Applications ..........................................................2-2 Study Structure ...................................................................................................................2-3

Market Size and Forecast Definitions ...................................................................................2-4 Hardware ............................................................................................................................2-4 Embedded vs. Standard .......................................................................................................2-4 Form Factor and Housing.....................................................................................................2-5 Software..............................................................................................................................2-5 Other Software ....................................................................................................................2-6 Operating System ................................................................................................................2-6 Application ..........................................................................................................................2-6 Industries ............................................................................................................................2-7 Sales Channel, Distribution, and Customer Segmentation ....................................................2-7 Key Regional Segments ........................................................................................................2-9 Key Currency Factors ...........................................................................................................2-9 Forecasts ...........................................................................................................................2-10
3. Market Shares .................................................................................................................................... 3-1 Market Overview.................................................................................................................3-1

Competitive Analysis ...........................................................................................................3-4 Segmentation of Industrial PC Vendors .........................................................................3-4 Taiwanese Suppliers ......................................................................................................3-6 The Case of Embedded ..................................................................................................3-7 Business Models and Sales Channels .............................................................................3-7 SWOT Analysis of Business Models ......................................................................................3-8 SWOT: Full-Line Automation Suppliers .........................................................................3-9 SWOT: Focused Automation Suppliers........................................................................3-10 SWOT: PC-Based Control Suppliers .............................................................................3-11 SWOT: Pure IPC Supplier ............................................................................................3-12 SWOT: Specialized in Silicon .......................................................................................3-13 Competitive Drivers ...........................................................................................................3-14 New Competitors ........................................................................................................3-14

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Industrial PCs Worldwide Outlook • Table of Contents

New Product Substitutes .............................................................................................3-15 Customer Bargaining Power ........................................................................................3-15 Supplier Bargaining Power ..........................................................................................3-15 Regional Markets ..............................................................................................................3-16 Europe, Middle East, and Africa .........................................................................................3-16 Asia ...................................................................................................................................3-17 The Americas.....................................................................................................................3-17 Leading Suppliers of Industrial PCs ....................................................................................3-19 Siemens ......................................................................................................................3-19 Advantech ...................................................................................................................3-20 B&R.............................................................................................................................3-20 Beckhoff......................................................................................................................3-21 EVOC Group ................................................................................................................3-22 NEC .............................................................................................................................3-23 Schneider Electric ........................................................................................................3-23
4. Market Analysis and Forecast ......................................................................................................... 4-1 The Global Economy and the Market for Industrial PCs........................................................4-1 Global Economic Development .....................................................................................4-1 The Economic Crisis – An Overview ...............................................................................4-2 Economic Stimulus Packages Around the World ............................................................4-3 Impact of Natural Resource Prices .................................................................................4-4 Capital Investment and its Dependency on the Business Cycle ......................................4-4

Industry Trends ...................................................................................................................4-5 Aerospace & Defense ....................................................................................................4-7 Automotive ...................................................................................................................4-7 Semiconductor ..............................................................................................................4-8 Machinery .....................................................................................................................4-8 Metal Working ............................................................................................................4-10 Food & Beverage and Consumer Packaged Goods (CPG) .............................................4-10 Pharmaceutical ...........................................................................................................4-11 Chemical .....................................................................................................................4-12 Electricity Production and Other Utilities .....................................................................4-12 Oil & Gas and Petrochemicals ......................................................................................4-12 Pulp & Paper ...............................................................................................................4-13 Building Automation ...................................................................................................4-13 Regional Economic and IPC Trends ....................................................................................4-14 North America – Limited Acceptance of IPCs, Limited Economic Growth .....................4-14 Asia: Diverse Economies, Same Outlook? ...................................................................4-15 China: Communists Saving Capitalism? .......................................................................4-16 Japan: Recession - Not Again! .....................................................................................4-17 India: Strong Like a Hungry Elephant ..........................................................................4-18 Asia’s Tiger States: Taiwan, Singapore, Hong Kong, South Korea ..................................4-19 Western Europe: Epicenter of Machine Builders & Automation Suppliers...................4-20

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Industrial PCs Worldwide Outlook • Table of Contents

Eastern Europe and Russia: The Wild East ..................................................................4-22 Middle East and Africa: Oil and the Forgotten Continent ............................................4-23 Latin America ..............................................................................................................4-24 Trends in the Automation Market......................................................................................4-25 Merge of Layers and Functions ....................................................................................4-25 Ever-Increasing Global Competition ............................................................................4-25 Customer Consolidation and Movements - Demand for Solutions ...............................4-26 IPCs and HMI Software – Soft Solutions .......................................................................4-27 Distributed Automation ..............................................................................................4-27 Networks in Manufacturing Automation .....................................................................4-27 Ongoing Demand for More Information – Handle, Store, and Use Data .......................4-28 Increased Operational Visualization – More Transparency ..........................................4-28 Serving the Installed Base............................................................................................4-29 Deciding Between IPCs and PLCs/PACs ........................................................................4-29 Trends in the Industrial PC Market.....................................................................................4-29 The Atom ....................................................................................................................4-30 Computing Power – Gets Larger and Size-Independent ...............................................4-30 High Level of Customization ........................................................................................4-30 Increased Openness and Functionality ........................................................................4-31 Success of Microsoft Windows ....................................................................................4-31 PC-Based Safety Functionality .....................................................................................4-31 More Real-time Applications .......................................................................................4-31 DIN Rail PCs.................................................................................................................4-31 Hardware/Software Bundles to Address Specific Industry Requirements .....................4-32 Summary ...........................................................................................................................4-32
5. Supplier Profiles ................................................................................................................................ 5-1 Company: Aaeon ........................................................................................................................ 5-1 Company: Adlink ....................................................................................................................... 5-3 Company: Advantech ................................................................................................................ 5-5 Company: ASEM S.p.A.............................................................................................................. 5-7 Company: Axiomtek .................................................................................................................. 5-9 Company: Company: Company: Company: Company: Company: Company: Company: Company: Company: Beckhoff Automation ............................................................................................ 5-10 BEG Bürkle ............................................................................................................. 5-12 Boser ........................................................................................................................ 5-13 B&R ......................................................................................................................... 5-14 Contec ..................................................................................................................... 5-16 Eurotech.................................................................................................................. 5-18 EVOC ...................................................................................................................... 5-20 Flytech..................................................................................................................... 5-22 Hitachi..................................................................................................................... 5-23 ICP Electronics ....................................................................................................... 5-25

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...................................................................................................................... 5-37 Rockwell Automation ... 5-31 Nematron .................................. 5-42 Siemens .............................................. 5-32 Pepperl + Fuchs ............................................................................ 5-39 Schneider Electric .................................................................................................................................................................................................................................................................................................................. 5-29 NEC ....................................................................................................................................................com • For Internal Use Only ...............................................Industrial PCs Worldwide Outlook • Table of Contents Company: Company: Company: Company: Company: Company: Company: Company: Company: Kontron Elektronik ............. 5-34 Lanner .................................................................................................... 5-45 Appendix A: Methodology Appendix B: Common Industry Terminology and Abbreviations iv • Copyright 2010 © ARC Advisory Group • ARCweb.................................................. 5-27 Micro Innovation AG..

..................................................................................................................................................................................................................................................................................4-40 Total Shipments of IPCs by World Region ..3-43 Leading Suppliers of IPCs for Vision .....................3-29 Leading Suppliers of IPCs for Food & Beverage ...3-34 Leading Suppliers of IPCs for Cement & Glass ...3-37 Leading Suppliers of IPCs for Semiconductors .....Industrial PCs Worldwide Outlook • List of Figures List of Figures 2-1 2-2 2-3 Standard Industry Code Classifications ...........................2-12 Standard Industry Code Classifications ...........................................................................................................................................................3-24 Leading Suppliers of IPCs for EMEA......................................................................................................................................................................................................................................................3-48 Leading Suppliers of IPCs for Data Acqisition ..................................3-44 Leading Suppliers of IPCs for Logic (Soft PLC) .................................3-28 Leading Suppliers of IPCs for Oil & Gas ..........................................................................................................................3-49 Leading Suppliers of IPCs for Communication Gateway ..........Process Industries .....................3-50 Total Shipments of IPCs ...............................................................................4-37 Total Shipments of IPCs for Asia ......................3-40 Leading Suppliers of IPCs for Electronics & Electrical .......................................................3-32 Leading Suppliers of IPCs for Electric Power ...................................................................................3-35 Leading Suppliers of IPCs for Automotive ...3-31 Leading Suppliers of IPCs for Pulp & Paper......3-46 Leading Suppliers of IPCs for Motion.................4-38 Total Shipments of IPCs for Latin America.........4-41 Copyright 2010 © ARC Advisory Group • ARCweb...........................................Service Industries............................................4-39 Total Shipments of IPCs by World Region ..................................................2-13 Standard Industry Code Classifications ..................................................................................2-14 3-1 3-2 3-3 3-4 3-5 3-6 3-7 3-8 3-9 3-10 3-11 3-12 3-13 3-14 3-15 3-16 3-17 3-18 3-19 3-20 3-21 3-22 3-23 3-24 3-25 3-26 3-27 4-1 4-2 4-3 4-4 4-5 4-6 4-7 Leading Suppliers of IPCs for North America .................................................................................................................................................3-38 Leading Suppliers of IPCs for Building Automation ..3-45 Leading Suppliers of IPCs for Distributed Control (Soft DCS) .............................................................................................................................Discrete Industries ........3-33 Leading Suppliers of IPCs for Water & Wastewater.............................................3-41 Leading Suppliers of IPCs for Robotics ..........................................................................................................................................................4-35 Total Shipments of IPCs for North America ...................................................................................................................3-30 Leading Suppliers of IPCs for Pharmaceutical & Biotech ........................4-36 Total Shipments of IPCs for EMEA ............................................................3-42 Leading Suppliers of IPCs for HMI ...............................................................com • For Internal Use Only • A ..................................3-47 Leading Suppliers of IPCs for CNC .....................3-36 Leading Suppliers of IPCs for Aerospace & Defense...............................................................................................................................................3-39 Leading Suppliers of IPCs for Machinery Manufacturing ....................................................................................3-27 Leading Suppliers of IPCs for Chemical .................3-26 Leading Suppliers of IPCs for Latin America .......................................................................................................................................3-25 Leading Suppliers of IPCs for Asia ......................

.........................................................................................................4-68 Total Shipments of IPCs for CNC ..................................................4-57 Total Shipments of IPCs for Electronics & Electrical .........................................................................................4-64 Total Shipments of IPCs for Vision.............................................................4-51 Total Shipments of IPCs for Cement & Glass ..........................................4-66 Total Shipments of IPCs for Distributed Control (Soft DCS) ...............4-63 Total Shipments of IPCs for HMI ...................................4-62 Total Shipments of IPCs for Robotics ..........................4-81 Shipments of Embedded Industrial Din Rail PCs ............4-69 Total Shipments of IPCs for Data Acqisition..........................................................................................................................................................................................................................................................................................................4-67 Total Shipments of IPCs for Motion ............................................................4-45 Total Shipments of IPCs for Oil & Gas........................................................................................................................................................4-53 Total Shipments of IPCs for Aerospace & Defense ....................................................4-59 Total Shipments of IPCs by Industry (2 year overview) ...4-65 Total Shipments of IPCs for Logic (Soft PLC) .......4-47 Total Shipments of IPCs for Pharmaceutical & Biotech...............................................................................................................................................................4-83 Shipments of Embedded Industrial Panel PCs ..........4-46 Total Shipments of IPCs for Food & Beverage........................................................................................................................................................................................................................4-76 Total Shipments of IPCs by Type (Units) ........................................................................4-80 Shipments of Standard Industrial PCs by Type.........................................................................................................................com • For Internal Use Only .................................................4-72 Total Shipments of IPCs for 19" Rack Mount (Units) .....................................................4-79 Shipments of Standard Panel Industrial PCs ...................................................................................................................................................................4-61 Total Shipments of IPCs by Customer Type .....................4-50 Total Shipments of IPCs for Water & Wastewater ...........................................................................................4-70 Total Shipments of IPCs for Communication Gateway.................................................................4-49 Total Shipments of IPCs for Electric Power .......................................................................................Industrial PCs Worldwide Outlook • List of Figures 4-8 4-9 4-10 4-11 4-12 4-13 4-14 4-15 4-16 4-17 4-18 4-19 4-20 4-21 4-22 4-23 4-24 4-25 4-26 4-27 4-28 4-29 4-30 4-31 4-32 4-33 4-34 4-35 4-36 4-37 4-38 4-39 4-40 4-41 4-42 4-43 4-44 4-45 4-46 4-47 4-48 4-49 4-50 Total Shipments of IPCs by Revenue Category ...................................................................................................4-54 Total Shipments of IPCs for Semiconductors.............................................4-75 Total Shipments of IPCs for Panel PC (Units) ...4-58 Total Shipments of IPCs by Industry (5 years) ....4-84 B • Copyright 2010 © ARC Advisory Group • ARCweb.................................................................4-73 Total Shipments of IPCs for Box PC (Units) ........................................................................................................................................................4-74 Total Shipments of IPCs for DIN Rail (Units) ..................................................................................................4-78 Shipments of Standard Box Industrial PCs ..................................4-71 Total Shipments of IPCs by Application.........4-48 Total Shipments of IPCs for Pulp & Paper ........................4-42 Total Shipments of IPCs for Hardware Revenue by Type .................................................................................4-77 Shipments of Standard 19” Rack Mount Industrial PCs ............................................4-60 Total Shipments of IPCs by Sales Channel .....................4-44 Total Shipments of IPCs for Chemical ..................................4-82 Shipments of Embedded Industrial Box PCs .................................................................................4-52 Total Shipments of IPCs for Automotive.................................4-43 Total Shipments of IPCs for Software Revenues By Type .........................................4-56 Total Shipments of IPCs for Machinery Manufacturing ......................4-55 Total Shipments of IPCs for Building Automation .............................

...............................4-85 Shipments of Embedded Industrial PCs by Type ................................................4-87 Copyright 2010 © ARC Advisory Group • ARCweb..................4-86 Shipments of Industrial PCs by Type.................com • For Internal Use Only • C ....................................................................Industrial PCs Worldwide Outlook • List of Figures 4-51 4-52 4-53 Shipments of Embedded Industrial 19” Rack Mount PCs ......................

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and the US economy. operational performance.com Research Areas of Expertise Florian’s focus areas include PLCs. He is also experienced in strategic marketing and mergers & acquisitions. yet critical goals: improving your return on assets.THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN ARC Consultant Biography Florian Güldner Analyst Automation ARC Advisory Group +49 211 3003 416 fgueldner@arcweb.On Energy. 3 ALLIED DRIVE DEDHAM MA 02026 USA T: 781-471-1000 F: 781-471-1100 arcweb. About ARC Advisory Group Founded in 1986. Florian has experience in the automation industry with Siemens and has a strong background in energy markets. Education Florian holds a Master Degree in Economics with Sociology and Psychology as minor subjects. ARC Research Reports and Publications Working with the Automation team on various studies and reports. motion control. he worked for AREVA in Germany and the US. Responsibilities and Experience Florian is part of the automation team covering manufacturing topics in Europe and is located in ARC’s offices in Germany. At ARC. ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. He studied at the Friedrich-Alexander-Universität in Erlangen (Germany) where he focused on statistics.com . time series and business cycle analysis. project time-to-benefit. and discrete sensors. We focus on simple. AC drives. and forecasting. In particular. Florian specializes in economic modeling. as well as for E. For even your most complex business issues. our analysts have the expert industry knowledge and firsthand experience to help you find the best answer. total cost of ownership. and shareholder value. international markets.

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and programming control systems in areas ranging from automobile to packaging. he has worked for Raytheon Company and Termiflex. In addition. particularly application areas such as packaging and safety. industrial networks. including specifying. packaging and industrial ne tworking teams. Humphrey Director of Research – Europe ARC Advisory Group +49 89 323 88900 DHumphrey@arcweb. motion control. and product areas such as PLCs. Education David Humphrey holds a BE in Electrical Engineering and Computer Science from Stevens Institute of Technology as well as MBA degrees from the Business and Economics University of Vienna (Wirtschaftsuniversität Wien) and the University of South Carolina with a concentration in International Business. implementing projects involving PLCs.THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN ARC Analyst Biography David W. ARC Research Reports and Publications Networking Alliances Bridge the Gap between Enterprise and Factory. he was Area Manager for automation solutions in Rockwell Automation's Munich. Germany office. In addition. in the United States. Responsibilities and Experience David Humphrey is part of the automation consulting team at ARC covering manufacturing topics in Europe and is located in ARC’s offices in Germany. HMI hardware and software. Prior to ARC. designing.com Research Areas of Expertise David Humphrey’s focus areas include manufacturing discrete and hybrid industries. David Humphrey has over 20 years of experience in industrial automation. he is a member of ARC’s hybrid manufacturing. Inc.com . AC drives. and industrial networks. but Who Reaps the Benefits? Challenges of Industrial Ethernet 3 ALLIED DRIVE DEDHAM MA 02026 USA T: 781-471-1000 F: 781-471-1100 arcweb. drives and motion control.

IO-Link and CompoNet Bring New Value to Machine Control Applications Capital Expenditure Survey (annual) Industrial Ethernet Networks the Digital Factory Acceptance of PC-Based Control Is Increasing. ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. operational performance.com . total cost of ownership. yet critical goals: improving your return on assets. We focus on simple. 3 ALLIED DRIVE DEDHAM MA 02026 USA T: 781-471-1000 F: 781-471-1100 arcweb. and shareholder value. But Varies around the World Industrial Ethernet and Safety Highlight SPS-IPC-Drives Show Are Safety Networks Ready for Ethernet? Safety Solutions and Safe Networks Highlight Hanover Fair German Carmakers Back PROFINET Capital Expenditure Survey Safetybus Systems PLC Supplier Preferences E-Business Strategies for OEMs Other Published Work Computer & Automation. our analysts have the expert industry knowledge and firsthand experience to help you find the best answer. Monthly ARC Essay About ARC Advisory Group Founded in 1986. project time-to-benefit. For even your most complex business issues.

Paul was a contributing editor for Putman Media’s CONTROL and INDUSTRIAL NETWORKING magazines for almost a year. Paul reviews and edits many ARC market forecast studies.THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN ARC Consultant Biography Paul Miller Senior Editor/Analyst ARC Advisory Group 781-471-1141 pmiller@arcweb. Prior to this.A.com . MA. safety systems. industrial networking. Paul has been with ARC since August 2008. In his role as an analyst. Paul closely followed the evolution of a number of different industrial automation technology areas. before that. produces reports. simulation and optimization software. Prior to joining ARC. In his senior editor role. cyber-security. and other Advisory Service deliverables. and consults with clients. Paul performs research. advanced process control. Paul served as global public relations manager for Invensys Process Systems and. In this capacity. degree from Emerson College in Boston. ARC Research Reports and Publications Water & Wastewater Industry Strategies Terminal Automation System Strategies (Parts I & II) Sustainability Takes on Additional Meaning at 2008 ARC Orlando Forum 3 ALLIED DRIVE DEDHAM MA 02026 USA T: 781-471-1000 F: 781-471-1100 arcweb. Paul also serves as ARC’s main contact point for editorial requests and general media relations. The Foxboro Company for a total of 23 years. insights. and plant-to-enterprise integration. plus most ARC reports. including process control systems. Responsibilities and Experience Paul serves several different roles at ARC. fieldbus instrumentation. asset management systems. Education Paul earned a B.com Research Areas of Expertise Paul’s focus areas at ARC include the water & wastewater and bulk terminal automation industries.

yet critical goals: improving your return on assets. 3 ALLIED DRIVE DEDHAM MA 02026 USA T: 781-471-1000 F: 781-471-1100 arcweb.Other Published Work It’s Back-to-School Time for Fieldbus Training – CONTROL magazine A Dynamic Duo: Digital Valve Controllers Linked to Asset Management Systems – CONTROL magazine The Many Faces of SCADA – CONTROL magazine Intrinsic Safety in the Digital Age – CONTROL magazine Object Architectures in an Increasingly Services Oriented World – CONTROL magazine Pressure-Based Level Measurements Keep Getting Better and Better – CONTROL magazine Fiber Optics: More Than Just a Backbone – INDUSTRIAL NETWORKING magazine Ins and Outs of Modular I/O: INDUSTRIAL NETWORKING magazine About ARC Advisory Group Founded in 1986. our analysts have the expert industry knowledge and firsthand experience to help you find the best answer. total cost of ownership. project time-to-benefit. We focus on simple. ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. operational performance. For even your most complex business issues.com . and shareholder value.

concise.com • For Internal Use Only • 1-1 . standards. enterprise applications. and services. ARC maintains one of the most in-depth databases in the world on technologies. A low client to analyst ratio ensures quick direct access to those who can provide the intelligence you need. Our list of available products and services continue to expand as ARC continues to invest in new technologies and resources to meet the demands of our customers. computers. integration strategies. ARC Advisory Group has provided products & services to hundreds of clients. including. This database is based on thousands of interviews. control systems. Our analysts follow technology and industry events on a daily basis.ARC Services ARC Services Thank you for purchasing ARC Advisory Group’s Global Outlook Study. and industrial automation. and company visits. drives. actuators. software. Our analysts sift through the clamor of the market hype delivering clear. ARC is the premier provider of worldwide market Copyright 2009 © ARC Advisory Group • ARCweb. IT. ARC is well known for providing the highest quality and most accurate market intelligence products and services. They have a broad range of expertise in such areas as e-business. sensors. supplier-neutral summaries of key events and technologies. Since 1986. Continuous Advisory Services ARC’s Advisory Services deliver a comprehensive portfolio of knowledgebased products and services that keep you ahead of the latest developments in enterprise applications. please contact one of our regional offices nearest you or visit our website: www. For more details about ARC Advisory Group and how we can further assist you.com. Market Intelligence Services The rapid pace of business today creates a constant demand for fresh market intelligence. and the products and capabilities of hundreds of automation and software companies. Our global network of industry contacts is an invaluable asset in discerning long-term trends from fads. user surveys. and plant systems. The material was planned and prepared to help save you time and money with your research. networks.arcweb. ranging from start-up firms to Fortune 100 companies.

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but also by a drop in intermediate panels. with the rise of Intel’s Atom processor. the level of the boom year 2008 will not be reached again until 2012. with no dominant player on a regional or global level. Many of these new IPC suppliers now target customers in mature economies. Even though the market for industrial PCs changes less rapidly than that for consumer electronics.8 % CAGR In 2009. While IPC technology itself has matured. the technological change continues. Indicator Market Maturity Revenue 2009 Potential to 2014 Prices Current State Growing. More computing power Trend Slowly aging 8.com • For Internal Use Only • 1-1 . goods like price erosion and increasing capabilities Constant These directions will continue to drive the market. many new players emerged – especially in China and Taiwan. A major factor dampening the recovery is the constant drop in prices. Now. the market participants had to deal with a 19 percent drop in 2009 that hit many companies hard and put a halt to the expansion plans of some Asian suppliers. opening up a new battleground in industrial applications that previously used non-PC based technology due to power consumption and size constraints. Competitors Technical Change Figure 1-1: Industrial PCs – a Brief Market Overview Copyright 2010 © ARC Advisory Group • ARCweb. new applications and requirements will enable differentiation through hardware and software. the market dropped by 19 percent. The industrial PC market structure is very fragmented. This is not only driven by user demand.749 500 to 10. The market had enjoyed high growth rates until the economic crisis negatively After a decade of strong growth in the industrial PC market. Smaller & dedicated 2. Even though the recovery will start quickly.804 USD 2.Industrial PCs Worldwide Outlook • Executive Overview Chapter 1 Executive Overview The economic crisis hit the market for industrial PCs (IPCs) hard.000 USD About 10 with global relevance Two directions: 1. In the past 15 years. the last few years have seen rapid technology changes. technology still improving USD 1. impacted the investment climate.

and infrastructure. and the plug & produce concept with pre-installed software allows the machine builder or end user to use this PC without modifying the OS. To provide a better understanding of future development and possibilities it also looks at various product segments as well as other segments of the market. 1-2 • Copyright 2010 © ARC Advisory Group • ARCweb. vibration. this means that they can be run around the clock and handle harsh industrial environments. pre-defined application. other suppliers consider their pre-configured IPCs as embedded products. and peripheral hardware. this study excludes board PCs and any revenue resulting from business with PCI cards sold separately. standard IPC. This study focuses on the manufacturing applications. Therefore. and a guaranteed long-term use in industrial environment. The concept could be described as “plug & produce. The study also looks only at complete IPCs sold as a product to machine builders and end users. While some only consider DIN rail-mountable PCs to be embedded. Embedded vs. Have pre-configured hardware and software designed to fit together to work on a specific. IPCs in Manufacturing IPCs are important in both manufacturing and many other industrial and commercial applications. Industrial PCs are ruggedized and built to meet specific industry standards.” Embedded PCs are sometimes headless.Industrial PCs Worldwide Outlook • Executive Overview Scope This study analyzes the industrial PC market. humidity. including extreme temperature. Standard The definition of “embedded” varies from supplier to supplier and user to user.com • For Internal Use Only . including marine. telecommunications. building automation. ARC Advisory Group defines embedded IPCs as those that:   Have no rotating parts. military. Study Structure This study splits IPC hardware into Figure 1-2: Industrial PC Study Structure three categories: embedded PC. Typically. We do not consider PCs with fans or conventional hard drives to be embedded.

Thin clients that includes devices that are bound to work with a PC.com • For Internal Use Only • 1-3 . mountings for panel PCs. ARC also considers IPCs that are connected to and productized with a screen to be panel PCs (essentially a box PC connected to a screen). HMI. these three categories add up to 100 percent of the hardware business. Rack Mount PC: Only IPCs designed to fit in industry-standard 19-inch racks are included in this sub-category. hard drive). Box PC: The typical box PC is compact and often headless. etc. screen/monitor. This study only includes hardware used with an IPC and sold together with the IPC. While bundled application software only represents a small percentage of the overall IPC market. IPCs with nonvolatile (NV) RAM have no rotating parts (fan. two factors characterized the market for industrial PCs: the economic crisis and the ongoing penetration of the market by Taiwanese suppliers. Universal design enables a box PC to be mounted either within or outside a machine. They are often very rugged and can be used in widely varied applications.Industrial PCs Worldwide Outlook • Executive Overview Together. Market Size and Forecast In the years 2008 and 2009.). Panel PC: A typical panel PC has a monitor directly mounted with the PC in a common housing. are included in this study. Some ruggedized PCs and IPCs are sold without any software. This study only covers software (operating system or application) sold in a bundle with an IPC. keyboard.). Form Factor and Housing Hardware is further segmented by its physical packaging: DIN Rail: A typical DIN rail-mounted IPC has modular design and modular I/O and can be used as a soft PLC. such as Siemens’ thin client. Copyright 2010 © ARC Advisory Group • ARCweb. The peripheral hardware category includes all PC-based hardware sold in a bundle with IPCs (mouse. we’ve attempted to further split the bundled application software segment into specific application types (control. etc.

New entrants include both PC or PC component suppliers from Taiwan. The IPC market is fragmented and unconsolidated. and PC-based automation suppliers like Beckhoff and B&R. and flexible product that they can use to enter new. In addition to IPC product specialists. full line automation suppliers like Siemens and Rockwell Automation. This fragmentation is due in part to the attractiveness of the industrial PC market for various companies. the market includes focused automation suppliers like Pepperl+Fuchs and Phoenix Contact. buy decision. The IPC market.com • For Internal Use Only . and automation suppliers seeking to enlarge their PC business. the companies in Figure 1-2 represent only 62 percent of the market. IPCs provide a logical stepping stone up the value chain. hundreds of Taiwanese companies supply IPC products either directly to the market or to other IPC suppliers. One of the most important topics discussed in the market is the build vs. which will continue to grow over the long run. but have them manufactured in Taiwan. Depth of production varies greatly between suppliers and touches all aspects of an IPC. open. such as Noax or Stahl HMI. the market for industrial PCs remains fragmented. Many companies use boards from Taiwan in their IPCs. Many companies also brand label IPCs from other suppliers. with only one-sixth of the suppliers analyzed having a market share above 2 percent. For companies that supply PC cards and boards. Some companies design their own Barriers to entry Factors that attract new competitors Scalable product with easy to implement “buy” decision for components Growth market Technological change offers the chance to “get the next train” For one stop automation shopping much non-PC technology is needed boards. Others do it all. For automation suppliFigure 1-3: Revenue of Top Suppliers ers. will continue to attract new competitors. non-manufacturing markets.Industrial PCs Worldwide Outlook • Executive Overview Competitive Landscape Although relatively mature. Furthermore. IPCs offer the opportunity to build a scalable. The unique prod- Difficulties to implement specific industry requirements Price competition with Asian suppliers Lack of customer base Longevity and support of product Figure 1-4: Factors Determining Competitive Environment 1-4 • Copyright 2010 © ARC Advisory Group • ARCweb. predominantly Taiwanese suppliers.

however. these companies are nearly exclusively based in North America. but their sheer size makes these companies less flexible. Notably. These help to stabilize growth and enables larger R&D expenditure. In the fragmented and highly competitive IPC market. the strength of focused automation Electric. Though many offer a sufficient level of customization (front plate adjustment. Full-line automation suppliers’ broad portfolios and regional and industrial spread is a double-edged sword. rooted in the PLC architecture Not complete. Figure 1-6: Focused Automation Suppliers Copyright 2010 © ARC Advisory Group • ARCweb. financial Business Model IPC Portfolio Regional Spread Industry Split Examples Market Share Figure 1-5: Full line Automation Suppliers position. IPCs typically represent only a small portion of their overall portfolio. from sensors to planning software. or focus too much on hardware. Their core strength results from their size (large R&D investments. but do not have a complete portfolio.com • For Internal Use Only • 1-5 . For example. and Japan. Even though these large companies have the possibility to leverage economies of scale. and many in-house products available). Focused automation suppliers: These companies are also rooted in the old automation hierarchy. only some IPCs in portfolio Global with strong regional focus Few focus industries Hitachi. Asian suppliers are driving down prices for these largely commodity products. Phoenix Contact 16 percent most diverse group in this analysis. Mitsubishi Omron. They typically provide products and solutions for certain layers in the automation hierarchy. worldwide network. from complete to basic functionality Global All industries Rockwell Automation. Siemens 19 percent This category refers to suppliers that offer the complete range of automation products. Full line automation suppliers: Full Line Automation Suppliers Offer complete set of automation products and solutions Varies heavily. Focused automation suppliers represent perhaps the Focused Automation Business Model IPC Portfolio Regional Spread Industry Split Examples Market Share Suppliers Offer selected set products and solutions. some opportunities remain largely unexploited. economies of scale. R&D expenditures are often relatively low. Europe. choice of standard modules) large suppliers are less open to new development requests from customers. operational excellence can suffer due to organizational overhead. However.Industrial PCs Worldwide Outlook • Executive Overview uct and long-term support requirements of some industries represent a barrier to market entry.

rooted in the PAC/ PC architecture. The companies in this segment experienced tremendous growth during the last years. For many. The Taiwanese companies often lack deep domain knowledge of the automation business in mature economies. brand labeling as sales channel Complete Global to regional Spezialists and generalists Aaeon. a specialized German IPC supplier. Advantech. While they Business Model IPC Portfolio Regional Spread Industry Split Examples Market Share Pure IPC Suppliers Focused on product business. Evoc. Pure IPC supplier: This category includes companies that specialize in industrial PCs and primarily (though not exclusively) offer IPCs. National Instruments 23 percent Figure 1-7: PC-based Control Suppliers European companies dominate this group.com • For Internal Use Only . selves as PC-based control suppliers. many have successfully established their brand in the market. investments have to be carefully planned. While most of the Taiwanese companies in this category leverage their low production costs.Industrial PCs Worldwide Outlook • Executive Overview suppliers in specific industries and/or regions makes it relatively easy for them to expand into new markets. a global. and BEGBürkle. including companies that are already well-established in the IPC market. Many of those focused companies gain experience from complete automation suppliers that enter these attractive niche markets as soon as they reach critical mass. Boser.Bürkle. IPCs are the sole or main source of revenue for pure IPC suppliers. This includes both Advantech. Benefiting from the ongoing success of PC-based control in general and individual achievements in operation excellence. there are also many European companies. BEG. Beckhoff. like Beckhoff or B&R. and thus predominantly focus on their home market. PC-based control suppliers: These companies focus on PC-based automation products. since financials are sometimes limited (many in this group are small-to-medium-size enterprises). large share of embedded PCs Global with regional focus Several focus industries B&R. Business Model IPC Portfolio Regional Spread Industry Split Examples Market Share PC-based control Supplier Offer variety of PC-based products. multi-million dollar Taiwanese company. TCI 25 percent Some Taiwanese and Chinese PC companies are also trying to establish them- are often based in Taiwan. small and specialized players Figure 1-8: Pure IPC Suppliers 1-6 • Copyright 2010 © ARC Advisory Group • ARCweb. PC-based control suppliers can efficiently leverage the modularity of their key product to offer front office flexibility. solution business less developed Mostly complete. Noax. with standardized modules for manufacturing lines.

Many therefore concentrate on brand labeling agreements. Each geographical region has slightly different ways of doing business and each region has different technological requirements and attitude towards IPCs.com • For Internal Use Only • 1-7 . specialized IPC suppliers. but also have some IPCs in their portfolios. The capital-intensive sales structure represents a hurdle to exploring new markets.” but also developed a wellreceived product and system business. regional in IPCs No industry focus Axiomtek. core business remains boards and cards Mostly Complete Global in components. ICP Electronics. that predominately produce chips and boards. but most have not had great success to date. While Europe hosts several of the largest players (Siemens. Specialized in Silicon Business Model IPC Portfolio Regional Spread Industry Split Examples Market Share Sell IPCs in order to participate more in the value chain. including IPCs. Many have a productfocused business and sales structures that directly connect them with OEMs and end users. Kontron). there are also many small. Many Asian silicon providers have lost market share to Kontron during the last years and Asian IPC specialists have had a hard time establishing business in Western Europe. Many nonEuropean companies have tried to get a foot in this market. Often. NEC 17 percent This group largely consists of hundreds of small to very small companies. mostly based in Taiwan. they are not focused on a specific industry. Two companies in this group are particularly noteworthy: NEC and Kontron. One of the greatest advantages these companies can and do offer is the ability Figure 1-9: Specialized in Silicon to customize boards for specific applications. Beckhoff. While their silicon business is global.Industrial PCs Worldwide Outlook • Executive Overview from mature economies focus on customer-centric innovations and developing a close relationship with their customers. Specialized in Silicon: These players offer nearly everything that has to do with silicon. and the small size and relatively high prices make these companies unattractive for brand labeling agreements or other partnerships. B&R. Competition in Regional Markets The regional markets differ significantly in their size and in their competitive landscape. Both still make a large share of their revenue with “silicon. their IPC business is still regionally focused. Kontron. Copyright 2010 © ARC Advisory Group • ARCweb. manufacturing IPCs for companies like Beckhoff.

many display manufacturers and machine builders are located here. pharmaceutical. simply could not be 1-8 • Copyright 2010 © ARC Advisory Group • ARCweb. Market Forecast and Development The current economic crisis hit the market for industrial PCs (IPCs) hard. In addition to many PC and IPC suppliers. The Chinese and Indian markets are perhaps the last markets that offer growth Asia (incl. which are becoming more sophisticated. other Asian markets (including Taiwan) Concentration % of Top Player 12% % of Top 4 Player 42% 71% 52% 39% 14% remain fragmented. The in- dustrial PC market in Taiwan is the one of the most dynamic worldwide. While this is well known in Japan. While the Japanese market displays moderate consolidation. North America has the smallest number of IPC manufacturers of any regional IPC market. and some parts of chemical.Industrial PCs Worldwide Outlook • Executive Overview Figure 1-10 shows both complete Asia and Japan. local companies mainly serve the local market. it is also true for the Chinese/Taiwanese market. especially the hybrid industries such as food & beverage. In both cases. the end of a string of boom years. since overall demand for automation equipment has declined drastically. The global economy began a steadily accelerating decline in about mid-2008. Rockwell Automation is in North America. What Siemens is in Europe. Even with several pure IPC suppliers. Additionally.com • For Internal Use Only . Boosting the market for IPCs is the need for improved monitoring and optimization of and increased visibility into a wide range of manufacturing production processes. The bubble economy. the traditional suppliers of industrial PCs face increasing competition from low-cost Asian providers as well as from operator panels. Japan) Fragmented Moderate Japan EMEA North America Latin America centration Fragmented Fragmented Fragmented Con- 27% 19% 18% 14% Figure 1-10: Regional Markets and Market Concentration potential without cutthroat competition. Figure 1-11: Overall Market Development for Industrial PCs with massive consumption in many developed and developing nations. Rockwell’s Allen-Bradley control equipment dominates the discrete industries here and Rockwell Automation is making inroads in the process industries.

3 % 7. the global economy boomed.9 % 2.9 % 6. At first. Industry Aerospace & Defense Automotive Electronics & Semiconductors Machinery Chemical and Petrochemical Food & Beverage Pharmaceutical & Cosmetics Pulp & Paper % of IPC Market 1.7 % 7.6 % Figure 1-12: Industry Growth and Market Shares The automotive industry is volatile and depends heavily on the business cycle.6 % Market Growth 5.7 % 7.0 % 5.9 % 4. change in structure Strong dependency on automotive.5 % 3. The current crisis overshadows many recent developments in the Copyright 2010 © ARC Advisory Group • ARCweb.1 % 9. In other industries and applications. For four years through the summer of 2007. Currently many companies complain about complications when applying for bank credit and.9 % Water & Wastewater 5. the markets are relatively mature and future growth is increasingly dependent on the overall industry performance. Here. The first phase of the economic crisis was the financial crisis.9 % 12. Panel PCs in ex-areas IPCs do fit the needs and demand is strong IPCs ideal for many applications Market shifting towards Latin America and Asia Ongoing demand to include light SCADA functionality I panels 10.8 % 12. which started in early 2007 with the first collapses on the subprime market in the US. often use IPCs in manufacturing Consolidation. there are signs of a severe credit crunch.com • For Internal Use Only • 1-9 .0 % 6. Industry Trends Industrial PCs are already well-accepted and widely used in many industries and applications.8 % 10. concentration on Asia.7 % Key Trends Consolidation of manufacturers – rising demand of solutions Visualizations needs remain strong Falling prices.Industrial PCs Worldwide Outlook • Executive Overview sustained. IPCs are just beginning to gain traction as their hardware and software capabilities have expanded to be able to solve new problems and fit into new market niches. even though China already represents around 11 percent of the world market. in mature economies. this was not seen as an economy-wide crisis.2 % 7.

food & beverage producers in- 1-10 • Copyright 2010 © ARC Advisory Group • ARCweb. The food & beverage and CPG industries are at the apex of adoption of highperformance solutions.com • For Internal Use Only .Industrial PCs Worldwide Outlook • Executive Overview automotive industry. the most important thing for IPC suppliers is the concept of embedded functionality. and rapid technology development characterize the highly cyclical semiconductor industry. Short product lifecycles. fast changing demand and price fluctuations. Kuka has leveraged true PC-based control for over a decade. The market for industrial machinery suffered greatly from the current economic crisis. CNC controls virtually all use some sort of PC platform. Ongoing competition and cost pressures have caused the tier 1 supplier market to consolidate considerably. and the need to handle large amounts of data for traceability and automation are all requirements. often with a proprietary. especially in the machine tool markets in North America and Europe. Another area where PC technology is well accepted is in the machine tool market. In the machinery sector. where flexibility. The OEM machine tool market in these regions faces increasing pressure to reduce overall development costs for machinery. represent a more classical area for IPCs. forcing industrial PC suppliers to deal with a shrinking number of customers. motion control. Since IPC suppliers consume relatively few chips compared to consumer electronics IPC suppliers should watch the consumer electronics market carefully. In recent years. In the robotics market. The semiconductor industry has strongly adopted PC technology. SoftServo made strong inroads in the Japanese and Asian market in machine tool and metal forming applications. The hybrid manufacturing industries (food & beverage and pharmaceuticals). This strong downturn has led to consolidation. while Japanese and Korean automakers continue to outperform the Big Three in their domestic markets. UNIX-based operating system to include and integrate safety and other control functionality and lower the operating system footprint. US automotive manufacturers have struggled since 2006. This forced some machine builders to move production and development resources to Eastern Europe or Asia. Demographic changes in emerging economies lead to a steady growth in emerging economies. using the PC as a platform to integrate third-party I/O. openness. to be early adopters of technological trends from consumer electronics and to avoid shortages. The demand for automation products in the hybrid industries grows at a stable rate. and networking. Recent rumors point to a chip shortage in 2010.

8 percent in September 2009. Korea. Singapore. Taiwanese IPC suppliers doFigure 1-13: Growth in Geographic Regions minate this price-driven market. and just under 5 percent in 2009. Average annual GDP growth in Asia is projected to slow from 7. These investments support the automated information flow necessary to meet the increasing regulatory requirements as well as the sophisticated product information tracking necessary to remain competitive. The US entered the recession first: will the US be the first country to exit? So far. The downturn impacted nearly every sector in the US. Nevertheless. capacity utilization has dipped below 70 percent. and many now have reliable systems in place.Industrial PCs Worldwide Outlook • Executive Overview vested heavily in their IT infrastructures. In Asia many (non-Japanese) Asian companies still rely on automation equipment from Western supplier. durability. tighter external financing.com • For Internal Use Only • 1-11 . The busing habits in emerging Asia differ from those in Western economies and is more price driven and less focused on long term partnerships. Regional Economic Development Every world region has its own peculiar business cycle and dynamics. in emerging Asia. Forecasts from the third quarter of 2009 suggest growth in Asia slowing sharply along with the global economy. Japan. The key financial risks for Asia stem from volatile capital flows. and disruptive spillovers to Copyright 2010 © ARC Advisory Group • ARCweb. and unemployment rose to 9. industrial PCs have had limited acceptance due to perceived complexity and hesitation based on questions relative to ruggedness. Hong Kong. and Taiwan are likely to record negative economic growth in 2009. the movement of OEMs towards emerging consumer markets represents a threat and a chance to lose or enlarge business in these regions. The following section looks at the overall investment climate within each region and discusses the impact on the demand for industrial PCs. In North America.6 percent in 2007 to about 6 percent in 2008. For Western suppliers. and reliability versus PLCs. capital investment in manufacturing remains low.

Industrial PCs Worldwide Outlook • Executive Overview domestic markets that could lead to a sharp credit squeeze and slower growth. not only because they offer growth possibilities. specialized PC players that offer solutions. these emerging markets are increasingly interesting. For IPC suppliers. They account for 16 percent of the worldwide market and host a number of different companies. Even Europe hosts many small. (Intel makes roughly one-fourth of its revenue in Taiwan. ARC believes that China and India will not only demand more automation equipment as wages rise. The Taiwanese market is the most vibrant PC market worldwide. the Taiwanese market is the fastest growing.) The table below analyzes the Taiwanese companies in the study sample. to established automation suppliers like Advantech. These range from component-driven companies that are moving up the supply chain.com • For Internal Use Only . but also because they themselves host a number of small specialized suppliers for industrial PCs. but will also shift towards more sophisticated systems with greater capabilities for achieving international quality standards. Chapter 3 includes a more detailed competitive analysis. Number of Companies 14 Number of Companies 7 6 1 0 0 14 Number of Companies 5 9 0 0 14 % 23% % 50% 43% 7% 0% 0% 100% Revenue in USD $ 293 % of World Market 19% Taiwan Speciallized in IPCs Specialized in Silicon Products PC based automation Supplier Focused Automation Company Full line Automation Supplier Revenue in % of Taiwanese USD Companies $ 233 80% $ 49 $ 10 $ 293 17% 3% 0% 0% 100% % 36% 64% 0% 0% 100% Component Supplier Product supplier System provider Solution Provider Revenue in % of Taiwanese USD Companies $ 32 11% $ 261 $ 293 89% 0% 0% 100% Figure 1-14: Taiwanese IPC Companies 1-12 • Copyright 2010 © ARC Advisory Group • ARCweb.

but rather a free fall. Austria. Western Europe hosts not only many automation suppliers but also a large amount of machine builders and system integrators. Downside risks to growth have also increased. One difference is that while PACs often only deliver their complete capabilities when part of a single-vendor automation solution. in some respects. PACs also have similarities with industrial PCs. Due to an open architecture and high computing power. The deepening global financial turmoil increasingly clouds the regional outlook for Latin America. Industrial automation demand is primarily driven by business issues and so is the market for IPCs. Copyright 2010 © ARC Advisory Group • ARCweb. In emerging Europe. Estonia. While programmable automation controllers (PACs) originally developed from PLCs. where one device incorporates functionality like logic and motion control as well as visualization.Industrial PCs Worldwide Outlook • Executive Overview For automation suppliers. France. However. Automation and Industrial PC Trends Some of the challenges industries face today include the need to act quickly and with agility to emerging market opportunities.com • For Internal Use Only • 1-13 . industrial PCs offer the openness that enables users to avoid this single sourcing problem. Switzerland. Czech Republic. That means that every IPC solution has to prove its advantages compared to embedded control or PLC solutions. IPCs represent the “perfect” PAC. given the uncertain outlook for world commodity prices and the possibility of further spillovers from the strains to global financial stability. The continued merging of automation layers will boost sales of IPCs and PACs. and Poland have all performed comparably well in the crisis). domestic demand and exports to Western Europe have started to moderate during the crisis but some countries even appreciated a slowdown to ease overheating pressures (Slovakia. Growth is expected to slow markedly as the global slowdown and tightening financial conditions take hold. cutting into PLC sales to a certain extent. All Eastern European countries will have a large demand for IPCs in utility and infrastructure in the coming years. and Hungary) are not experiencing a slowdown. Germany. The classical automation topology has merged into flatter. many countries (Latvia. and increasing pressures to improve financial performance. the most important sub-regions in EMEA are Eastern and Western Europe. Slovenia. Belarus. a more integrated architecture. Lithuania. and Italy are the centers of automation and machine building.

facilitate a common environment. Ethernet’s increasingly compelling value proposition in the areas of technological commonality.com • For Internal Use Only . manufacturers prefer to have broader solutions packages from suppliers or third-party system integrators. Customer consolidation has various implications for suppliers. as well providing other significant cost savings. the relative benefits of small PLCs with attached I/O decreases in favor of PLCs or IPCs with remote modular I/O. Increasingly. fieldbus diversity. real-time Ethernet communication Having a broad range of scalability within a single product family Desire for optimal application form factor/customized solutions Figure 1-14: Industry Trends Impacting Automation Equipment Demand al and maintenance training for the entire system. provide consistency and simplicity. Also. and global ubiquity is one of the most significant changes in automation. However. as more products are manufactured in more locations. Distributed control needs intensive cross-communication and interaction between systems and their dynamically changing environment. as the trend towards distributed architecture continues. and drive down costs Employing standard technologies and bridging the gap between operations and IT Demand for products that are easier to install and use Greater productivity though higher line speeds. one stop shopping that aim to reduce Total Cost of Ownership (TCO) Support during all lifecycle phases Use of standards to promote choices. Distributed automation is most powerful when combined with a powerful network like industrial Ethernet. distributed automation often triggers the large number of different connected systems and is often more easily managed by a PLC/PAC than an IPC. IPCs will benefit from the increasing success of industrial Ethernet and real-time industrial Ethernet. better performance Compliance to worldwide electrical and safety regulations Local service and support all over the world Reducing maintenance and spare parts costs Networking technologies. This trend eliminates the need for specialists in manufacturers’ organizations. There is a clear trend towards distributed architecture in future automation topologies. As the customer base gets smaller. Ethernet 1-14 • Copyright 2010 © ARC Advisory Group • ARCweb.Industrial PCs Worldwide Outlook • Executive Overview The current economic situation resulted in consolidation among the companies that buy IPCs. the market power of the surviving customers increases. This minimizes risks as interoperability and applicability responsibility lies with the systems supplier. These machines builders and end users also have increasingly complex manufacturing processes. In practice. vertical integration. which minimizes operationSustainable manufacturing Demand for large data transfers Measuring real time performance of manufacturing operations Increasing capital investments in automation equipment as a result of globalization Broad solutions.

Industrial PCs Worldwide Outlook • Executive Overview

can greatly enhance data-gathering from the plant floor. This becomes especially useful if the data is effectively evaluated using applications such as plant asset management (PAM). Increased used of Ethernet on the plant floor is driven largely by manufacturers, who need to collect, manage, and store increasingly larger amounts of data, rather than by suppliers. Sustainable manufacturing will only increase these requirements. Industrial PCs will benefit from this development, since they enable easy connectivity between the production floor and office environments. Panel PCs will benefit from the manufacturers ’ requirements to increase agility through better visualization of their production processes. Various trends within the industrial PC market will affect future growth. These include technology development such as Intel’s Atom processor, price developments, and also less-plastic aspects like the increasing acceptance of IPCs in manufacturing. The Atom processor provides 800 MHz to 2 GHz with a maximum thermal design power (TDP) of 0.65W to 8W (the Z series also offer s 2GHz model with 2.4W TDP). This offers various possibilities to end users and machine builders. First, the low-cost, low-power Atom enables low-CPU power IPCs at a low price and with low energy consumption and low heat. Sizeindependent computing power, also offers makes new form factors possible. One development is flatter panel PCs that are more easily integrated into machines. Wide screen panel PCs are also very popular and, in some cases, upright wide screen panel PCs can replace a design with separate screen and keyboard. Many companies provide a high level of customization. This ranges from hardware customs, to specific bundles of hardware and software. While the percentage of custom products is very large in some companies (up to 40 percent) this depends on the batch size demanded from a customer. While smaller players often tend to have a larger overall share of customization, extreme small batch sizes and even custom board development are mostly found with suppliers that also sell chips (see Kontron, Advantech, etc.).

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Industrial PCs Worldwide Outlook • Executive Overview

Strategies for Success
Industrial PC suppliers have to react to increasing competition and technological developments and apply different strategies to cope with competition, plus price and margin erosion. Industrial PC Market Strategies There are two ways that we can systematically look at the strategies. Chapter 3 and looks at the product portfolios and the offerings of the different suppliers. The other is to look at the supplier’s two main strategic issues: strategy towards customers and strategy towards competitors. Figure 1-16 explains the methodology and the way the suppliers were clustered.

Figure 1-15: Segmentation by Strategic Position

The analysis shows that aggressive visionaries are by far the largest supplier group in terms of IPC revenue per company. Cash miners follow. Safe players are the smallest group, but those companies usually have only a low percentage of their total revenue in IPCs. This group is relatively small because it includes a lot of smaller Taiwan-based companies that compete on price with their IPCs, but nevertheless address a clearly defined market that grows so fast that further expansion is not necessary.

1-16 • Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only

Industrial PCs Worldwide Outlook • Executive Overview

Revenue Analysis Revenue in USD Aggressive Visionaries Safe Players Cash Miner Product Suppliers $ $ $ $ 618 206 473 283 % of total market 39% 13% 30% 18%

# Analysis # of companies 11 23 11 15 % of sample 18% 38% 18% 25%

Average IPC revenue

56 9 43 19

Figure 4–16: Analysis of Strategy Groups

Recommended Strategies for Success During interviews with experts and leading industrial PC suppliers, ARC obtained insight into their strategies and worked out some common denominators and best practices for the industrial PC market. Positioning within the Portfolio and Solution Business The supplier strategies figures indicate that a solution-driven business approach helps suppliers perform better in the market for industrial PCs. This includes customization, industry domain expertise, and demands a well-developed product portfolio of the supplier. While some suppliers leverage their own size to enable economies of scale with industry- and application-specific solutions, other supplier concentrate on their ability to leverage a modular hardware platform in combination with specific software. Both strategies enable a supplier to stay cost effective. While, solutions-based offerings are widely applied in developed economies, this is much less the case in emerging markets. ARC expects that the success of a solution-based business approach in emerging markets will rise as the economic growth continues to slow down and end users have to focus more on KPIs (such as overall equipment effectiveness) and will therefore start to use more and more intelligent automation equipment. Use a Flexible Approach to your Value Chain While several (predominately German) suppliers emphasize that they not only design their own boards and other hardware products, but also build them. Other suppliers have a more flexible approach to the build vs. buy decision.

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Industrial PCs Worldwide Outlook • Executive Overview

Automation suppliers often use Taiwanese companies as a source for intermediate goods such as chips, RAM, and motherboards. Electronics took another path and bought Taiwan-based Hitec. While it could make sense for some suppliers to use the “ not made in Taiwan” strategy for sales and quality management, ARC is convinced that a well-monitored supply chain could bring together the benefits of both worlds to ensure sustainable business success. This is especially true since displays and other parts in panel computers usually already purchased from a third-party supplier. Exploit Increasing High End Automation Requirements in Emerging Markets Emerging markets are moving ahead technically, as well as economically. Production technology has moved forward and is starting to catch up to Western standards. Even though many suppliers have developed specially designed operator panels to fit the demand in emerging markets, this is not the case for industrial PCs. One of the main differences between production approaches in established vs. emerging economies is that machines in emerging economies are typically less connected. As the success of Advantech and other Taiwan- and China-based companies demonstrates, demand for industrial PCs in emerging markets is high and still rising. Search Out New Markets The flexible nature of IPCs enables use within a wide array of applications other than manufacturing. ARC estimates that the market for IPCs for other than manufacturing use is roughly USD 2.3 billion. This includes mobile PCs (such as Panasonic’s Toughbook) and also box PCs used in trains or infrastructure. The market size studied only includes those companies that are also active in the area of automation and thus represent only a small
Figure 1-17: Current Markets for IPCs besides Manufacturing

Several

European and US-based companies also brand lable Taiwanese PCs. Beijer

fraction of the overall market for industrialized PCs and embedded systems.

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Industrial PCs Worldwide Outlook • Executive Overview

While some markets, such as military or marine, demand specific certifications and technical features, other markets are easier to enter. The market for infrastructure systems in particular is booming in merging markets and also represents a relatively stable stream of revenue. Standardize Hardware and Differentiate through Software Hardware is becoming commoditized. Suppliers should increasingly emphasize the value of software that differentiates them from their competitors. Not only does hardware design offering limited possibilities for differentiation, it also consumes considerable R&D expenditures. On the other hand, economies of scale could be realized by using one hardware platform for many products that are largely differentiated only though software. Monitor Consumer Electronic Markets Consumer electronics markets are important to IPC suppliers for many reasons. First, many technological advances, like multi-touch for panel PCs, originate in consumer electronics markets. Consumer electronics markets also provide an indication of which products will be built en masse in the future. The latter is a double edged sword, since it could mean cheaper intermediate goods due to increased production capacities, but it could also create chip shortages in 2010, when and if the economy recovers. In addition to the markets for netbook and notebook computers, which have many similar requirements with industrial PCs, other interesting consumer electronics markets to monitor include digital picture frames, which can alter the demand and supply situation for panels.

Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only • 1-19

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including On-Demand License. The web-enabled application ensures that you have instant access to the most up-to-date information from ARC. This means the data is available when and where you need it. ARC now off ers two new products that provide the market intelligence suppliers need to gain a deeper understanding for allocating resources across countries and industries. PDF Report.Industrial PCs Worldwide Outlook • Scope Chapter 2 Scope This study can serve as an effective planning guide for both current suppliers and new entrants to the market. ARC now also offers Regional Studies with Country & Industry Forecasts for all key automation and software solutions. In addition to our traditional “hard copy” outlook reports. By providing strategic market information for internal use by our clients. MIS puts ARC data into a powerful relational database supporting more than 50 product categories in over 20 vertical markets in all regions of the world. The On-Demand License offers unique features not available in other formats. You can export statistics to PDF format or directly into an Excel spreadsheet to combine with your own facts and figures and analyze and perform “what-if” scenarios for the specific markets in which you’re inte rested. The information contained in the study is “client confidential” and should not be used externally or republished without express written consent from ARC. Regional studies include country and industry forecasts. or Hard Copy. Excel Report. Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only • 2-1 . Building on ARC’s traditional market studies. The Market Intelligence Service provides you with instant access to market intelligence right at your own computer. ARC’s Market Intelligence Service is a business knowledge base containing market data on manufacturing automation and software solutions. These studies provide both regional market shares of the leading suppliers and market forecasts by country and industry. as well as for technology users seeking to gain a better understanding of the marketplace. You can purchase these market studies in several different formats. These are Market Intelligence Service (MIS) and Regional Studies with Country & Industry Forecasts. ARC studies aim to help suppliers develop business plans for marketing and product development and help technology users make better-informed decisions.

arcweb. Key Issues Researched This study looks at industrial PCs (IPCs). telecommunications.Industrial PCs Worldwide Outlook • Scope Please visit our website at www. building automation. While this study focuses on the manufacturing applications. including marine. and infrastructure. the study also covers them to a certain extent. The study answers a number of relevant questions for automation suppliers. since these nonmanufacturing applications provide excellent potential for automation suppliers to expand beyond their traditional markets.com for more information on these products. military. This study excludes board PCs and any revenue resulting from business with PCI cards that are sold Manufactucturing and NonManufacturing separately. 2-2 • Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only . including both hardware and bundled software. in particular:  How large is the market for IPCs and its sub-segments? Who are the main suppliers and what are their respective strategies and product portfolios?   How large is the market for embedded IPCs? What is the growth potential for the next five years and how will the market react to the economic downturn?  What portions of the overall market for IPCs have the greatest growth potential?  How does the growing popularity of programmable automation controllers (PACs) impact the IPC market? Are IPC’s compatible with PACs? Manufacturing and Non-Manufacturing Applications IPCs are important in both manufacturing and many other industrial and commercial applications.

Some ruggedized PCs and IPCs are sold without any software. etc. The peripheral hardware category includes all PC-based hardware sold in a bun- dle with IPCs (mouse.g.com • For Internal Use Only • 2-3 . standard IPC. they appear in both categories. Since box. screen/monitor. keyboard. IPCs without software could be part of embedded or standard IPCs. etc. This study only covers software (operating system or application) sold in a bundle with an IPC. and rack mount IPCs could be used as either an embedded system or a standard IPC. Copyright 2010 © ARC Advisory Group • ARCweb. Embedded rack-mounted IPCs are primarily used in electric power plants. we’ve attempted to fu rther split the bundled application software segment into specific application types (control. IPCs with nonvolatile (NV) RAM have Structure of IPCs for Manucfacturing no rotating parts (fan. Other software. including software provided by suppliers that exclusively sell software. is covered in other ARC market outlook studies. panel. e. hard drive). This study only includes hardware used with an IPC and sold together with the IPC. Thin clients that includes devices that are bound to work with a PC. Together. Embedded and standard IPCs are further split into hardware categories (see graphic).). mountings for panel PCs. are included in this study. and peripheral hardware. While bundled application software only represents a small percentage of the Split of Embedded and Standard IPCs overall IPC market. HMI.Industrial PCs Worldwide Outlook • Scope Study Structure This study splits IPC hardware into three categories: embedded PC. Siemens’ thin client. these three categories add up to 100 percent of the hardware business. Special ruggedized PCs are typically embedded.). The market researched in this study only includes software provided by automation suppliers that also offer IPCs and which is sold in a bundle with an IPC.

The outlook for any business. Five-year forecasts in this study show long-term trends.2g and shocks at minimum 1g Guaranteed long term load: ≥ 2 years Embedded vs.Industrial PCs Worldwide Outlook • Scope Market Size and Forecast Definitions ARC derives market size figures from its extensive in-house databases and in-depth interviews with leading suppliers. pre-defined application.com • For Internal Use Only . While some only consider DIN rail-mountable PCs to be embedded. ARC defines the base year market size in terms of shipments by industry participants. however. Have pre-configured hardware and software designed to fit together to work on a specific. Margins earned by distributors and other sales channels are excluded. We do not consider PCs with fans or a conventional hard drive to be embedded. not by bookings or orders. embedded systems are sometimes built to handle up to 95 percent humidity without condensation Vibration: minimum 0. can dramatically change due to the rapidly changing technology and global economic environment. The concept could be described as “plug & produce. Average selling price (ASP) reflects factory-level pricing.” 2-4 • Copyright 2010 © ARC Advisory Group • ARCweb. including user projections of future demand and ARC’s assessment of the growth potential for each segment form the basis of ARC market size and forecasts estimates. Standard The definition of “embedded” varies from supplier to supplier and user to user. including the following operating conditions:     Temperature: Minimum range of between 5 to 50 degree Celsius during operation Humidity: depends on application. this means that they can be run around the clock and handle harsh industrial environments. Typically. ARC recommends clients obtain the latest updates from ARC before making any important decisions. other suppliers consider their pre-configured IPCs as embedded products. ARC Advisory Group defines embedded IPCs as those that:   Have no rotating parts. A combination of factors. Hardware Industrial PCs are ruggedized and built to meet specific industry standards.

However. Examples include Siemens’ BOX PCs and BEG Bürkle’s Box Line. In these cases. Universal design enables a box PC to be mounted either within or outside a machine. custom-programmed by suppliers as part of service/solution business. Form Factor and Housing Hardware is further segmented by its physical packaging: DIN Rail: A typical DIN rail-mounted IPC has modular design and modular I/O and can be used as a soft PLC. and the plug & produce concept with pre-installed software allows the machine builder or end user to use this PC without modifying the OS. Panel PC: A typical panel PC has a monitor directly mounted with the PC in a common housing. as long as it is able to handle industrial environment. Rack Mount PC: Only IPCs designed to fit in industry-standard 19-inch racks are included in this sub-category. software. Software This sub-category only includes software sold by industrial PC providers. the screen is listed under peripheral hardware. is not counted here. ARC also considers IPCs that are connected to and productized with a screen to be panel PCs (essentially a box PC connected to a screen). Other Software This segment includes application software that is specifically programmed to fit a certain automation requirement. Please note that a “pre-defined” application is not the same as a “pre-configured” application. box PCs sold with a screen as a bundle are not considered panel PCs. Examples include the Think IO (Kontron) and Beckhoff’s embedded PCs. They are often very rugged and can be used in widely varied applications.com • For Internal Use Only • 2-5 . Box PC: The typical box PC is compact and often headless. as many PCs are often delivered without software. Non-productized.Industrial PCs Worldwide Outlook • Scope Embedded PCs are sometimes headless. Copyright 2010 © ARC Advisory Group • ARCweb. Embedded PCs require more customization since they typically have a modular design to build the PC for a dedicated application.

Linux) software necessary to run an industrial PC. Sales Channel. like PACs (but unlike PLCs). and hybrid manufacturing industries. 2000. this request specifically pertained to data on IPCs. ARC has further segmented application software provided by the IPC supplier into the following applications:          HMI Vision Logic control Distributed control Motion control CNC Robotics Data acquisition Communication gateway It is important to mention that. While ARC also asked suppliers to provide revenue data from naval and military applications (which represent potential new markets for many of our clients). we’ve only included data for IPCs used to manufacture these products.. rather than general-purpose PCs.g. and Vista. and Customer Segmentation ARC analyzes market share by entities involved in the sale and purchase of an automation product. many IPCs run more than one application. as well as for building automation. Industries This study includes market data for IPCs sold into the discrete. process. rather than in the products themselves. XP. Proprietary OS are part of the other category. In the aerospace and defense industry. NT.Industrial PCs Worldwide Outlook • Scope Operating System Operating systems include any proprietary or open source (e. Real-time operating systems (RTOS) represent only a small part of the market since ARC does not include third-party software suppliers. ARC groups these entities into two sets: those that 2-6 • Copyright 2010 © ARC Advisory Group • ARCweb. Windows software includes all versions: 95.com • For Internal Use Only . ME. Application While embedded application software only represents a small percentage of the overall industrial PC market. This provides benefits relative to traditional PLCs. 98. Distribution.

“distributors” that stock. Distribution channels do not use. and support products. Distributors that stock IPCs can reduce delivery times for customers.com • For Internal Use Only • 2-7 . All customer types purchase IPCs through one or more of these channels. software. and system integrators have different criteria for selecting suppliers. while system integrators add value by integrating the product with other components. end users. Beside well-known partnerships.Industrial PCs Worldwide Outlook • Scope sell or resell the product (”distribution channels”). The customer types (or purchasers) that make up a market are the consumers or “end users” of the product. ch ange. OEMs incorporate the product as a part of the equipment they produce and sell. These factors ensure that SIs have a role to play. ARC includes shipments to OEMs within a region but does not track imports and exports of IPCs contained within machinery. referred to as the “direct sales” channel. Distributors are well aware of the market demands in their regions as well as of the market structure and competitive environment. or by configuring it into a system along with other products. Distribution channels (or sales channels) primarily include the suppliers’ sales staff. original equipment manufacturers (OEMs). and the value they provide to end users by taking single point responsibility for overall system performance. System integrators leverage their application expertise. and “independent representatives” that do not stock products. or modify it and add value. Brand labeling is an important issue in the IPC market. Customer types either use the product as is. though they may package it with other products or brand label it. and domain knowledge to create systems for their clients. wiring application engineering. This definition ensures total unit shipments are the same for both sets and eliminates the possibility of “double counting” units shipped. knowledge about integrating disparate technologies. many suppliers buy a part of their IPC assortment to com- Copyright 2010 © ARC Advisory Group • ARCweb. but sell on commission. and those that purchase the product (“customer types”). and system integrators (SIs). while helping reduce inventory and storage costs for the IPC manufacturers. OEMs. Suppliers also depend on SIs to smooth out fluctuations in demand for project services. sell. either by using it as a component in another product. and more so when applications are complex or when products need programming or configuring to suit an application. or modify the product.

Eastern Europe. Latin America. and Asia. When comparing ARC reports from different years. North America Europe Asia Latin America Geographic Segmentations Key Currency Factors To eliminate changes in market size due to ongoing currency variations. and the Middle East. Korea. North America consists of the United States and Canada. EMEA consists of Western Europe. Taiwan. China. and South America. we do not include revenues earned through reselling in this study. Key Regional Segments Geographically. Africa. CIS. Each year. customers must take into account the ongoing changes in exchange rates that occur from year to year and use the exchange rates given in each study to convert back to local currencies. South East Asia. ARC updates the exchange rates used in our market analysis and forecasts to portray the most realistic picture of the market possible.Industrial PCs Worldwide Outlook • Scope plete the offered product line. While this makes perfect sense in terms of sales strategy. Mexico. India.com • For Internal Use Only . EMEA. ARC has divided the marketplace into four major segmentations: North America. and Australia. ARC uses average exchange rates over a 12-month period running from October 1 to September 30 for the leading currencies. All ARC forecasts are prepared in current US dollars and are based on the as- 2-8 • Copyright 2010 © ARC Advisory Group • ARCweb. Asia consists of Japan. Latin America is comprised of Central America.

52 Country European Union Japan Swiss Franc New Taiwan Dollar National Currency (Abbreviation) Euro (€) Yen (¥) CHF TWD Average Currency Exchange Rates Used In ARC Market Studies Forecasts The forecast includes a combination of various factors addressed to forecast the future market for IPCs. The outlook for any business.Industrial PCs Worldwide Outlook • Scope sumption that the current inflation rate of approximately 3 percent will continue throughout the period covered by this report..68 103. IMF. ARC recommends clients obtain the latest updates from ARC before making any important decisions. can dramatically change due to the rapidly changing technology and global economic environment. Five-year forecasts in this study show long-term trends as well as major business cycle influence. This allows the methodological combination of advanced time series analysis and standard scenario techniques. ARC’s in-house database and expertise were used to forecast the relevant automation markets and to assess of the growth potential for each segment. ARC analyzed the identified factors in terms of the dynamics of their impact and their interrelatedness. From a statistical point of view.39 0. The trend is considered to be of a function that characterizes a random walk with drift (constant and different from zero in the first difference).68 31.g. WTO. 1) the economy and the business cycle. Exchange Rate National Currency units per US Dollar ($) 0. Copyright 2010 © ARC Advisory Group • ARCweb. however. The threefold data basis represents the structure of the factors. derive from. Forecasts of the market the business cycle were based on careful observation and analysis of major national and international organizations (e. 2) the development of other automation markets. OECD. as presented in Chapter 4. The factors. showing the typical Granger shape. and 3) trends in the IPC market itself. this represents a previously filtered time series to extract trends and cycles.com • For Internal Use Only • 2-9 . World Bank). ARC determined trends in the IPC market and the impact of other trends on the IPC market by a combination of interviews with IPC suppliers and primary market research.

1.5.0 27.1-27.7 40.2 17. 3256 322 313.Industrial PCs Worldwide Outlook • Scope Figure 2-1 Standard Industry Code Classifications .1-10. Production) Oil & Gas (Pipelines) Oil & Gas (Refining) Pharmaceutical & Biotech Pulp & Paper Textiles Water & Wastewater SIC Code 32 28 (except 283 & 284) 491. 24.com • For Internal Use Only .1-15. T&D) Food & Beverage Metals (Primary Production) Mining Oil & Gas (Exploration. 314 2213 NACE Code 26.5.6.5 21.2 11.2. 37.1 10. 24. 12. 24. 14 NAICS Code 327 325 (except 3254 and 3256) 2211 311.3. 2212 324 3254.2. 21 33 10.4.1-17. 24. 24.9.2 40. 60.2 24. 492 29 283. 213111.8 24. 12.1-26. 13.1 15.1-13. 4931 20. 312 331 212 211. 284 26 22 494.1. 495 2-10 • Copyright 2010 © ARC Advisory Group • ARCweb.3 23. 16. 21. 90 13 46. 24.7 41.3.1. 23.1. 213112 486.Process Industries Process Industries Cement & Glass Chemical & Petrochemicals Electric Power (Generation . 11.

379 15.0. 382.1-20. controllers purchased as OEM components for food processing or food packaging machinery is included in the figure for the food & beverage industry and is not included in Machinery. 316 336 3339.61 28.1-29. 3372 333 3391 326 511. 3534. 25.1 29.7 33.4-35.1-31.5.1-18. 3341.com • For Internal Use Only • 2-11 . which is excluded from the Machinery Industry.3 34. 3564 36 (except 3674) 3674 34 24. 323 3345.3. 31 371. 19.2-33. 385 30 27 381. 3334 335. 39 NAICS Code 3364 315.1-28. there is also a large quantity of OEM equipment that ARC accounts for within the respective end user industries.1-32.1-22. 3399 NACE Code 35. 32. 3342. For example.3 18.5 45. 31. 35.Discrete Industries Discrete Industries Aerospace & Defense Apparel. 36. 375.2 22.2-19.1 25.1-34. Footwear & leather products Automotive Building Automation Electronics & Electrical Semiconductors Fabricated Metal Products Furniture & Wood Products *Machinery Medical Products Plastic & Rubber Products Printing & Publishing Other Discrete SIC Code 372 & 376 23." Copyright 2010 © ARC Advisory Group • ARCweb.6 *"While most machinery manufacturers fall under this segment. 36.7 20. 25 35 (except 357) 384. 387. 3346 3344 332 3219.3.2-36.5.Industrial PCs Worldwide Outlook • Scope Figure 2-2 Standard Industry Code Classifications .3 33.3.6 24.3 30. 3343. 386.1. 3371.

45 4224. 53. 58. 55.Service Industries Service Industries Retail .2 52 (except 52. 47 2-12 • Copyright 2010 © ARC Advisory Group • ARCweb.2. 59 514 50.161. 63.Industrial PCs Worldwide Outlook • Scope Figure 2-3 Standard Industry Code Classifications . 64.Other SIC Code 54 52. 483. 488. 51 (except 514) NAICS Code 445 44 (except 445). 482. 62.2. 44. 492. 61.2) 51.com • For Internal Use Only .163. 45.162. 56.1 Transportation & logistics 42. 57. 4228) 481. 4228 42 (except 4224.3) 60.Food & Beverage Wholesale/Distributor . 484.3 51 (except 51. 493 NACE Code 52.2.Food & Beverage Retail – Other Wholesale/Distributor .4.

open.com • For Internal Use Only • 3-1 . The fragmented. The main differentiator between players is whether they also supply “classical” automation equipment. the market includes focused automation suppliers like Pepperl+Fuchs and Phoenix Contact. Market Overview A large number of different players characterize the market for industrial PCs. This includes well-known companies like Stahl HMI. other important characteristics also determine the strategy and the success of a particular supplier. However. made it impossible for ARC to segment different players into any particular market size group. such as PLCs or proximity sensors. and PC-based automation suppliers like Beckhoff and B&R. For automation suppliers. This fragmentation is due in part to the attractiveness of the industrial PC market for various companies. IPCs provide a logical stepping stone up the value chain. hundreds of Taiwanese companies supply IPC products either directly to the market or to other IPC suppliers.Industrial PC Worldwide Outlook • Market Shares Chapter 3 Market Shares Although relatively mature. and flexible product that they can use to enter new. IPCs offer the opportunity to build a scalable. or focus exclusively on PC-based products. with many companies still able to position themselves as niche players and as generalists. with only one-sixth of the suppliers analyzed having a market share above 2 percent. full line automation suppliers like Siemens and Rockwell Automation. the market for industrial PCs (IPCs) remains fragmented. Copyright 2010 © ARC Advisory Group • ARCweb. unconsolidated nature of the IPC market. Furthermore. but also lesser-known companies like Noax. non-manufacturing markets. The latter category includes many Asian companies. Figure 3-1: Market of IPCs by Competitor For companies that supply PC cards and boards. In addition to IPC product specialists such as these.

since IPC technology is relatively mature and numerous manufacturers offer “plain vanilla” products suitable for brand labeling.Industrial PCs Worldwide Outlook • Market Shares One of the most important topics discussed in the market is the build vs. while others use Microsoft Windows. software. The last topic even extends to the operating system. suppliers also drive some trends to position themselves in the market. Others do it all. This strict definition of solution providers e xcludes most of the providers in the industrial PC market. and services tailored to those needs. Solutions providers typically have in-depth knowledge of their customer’s (machine builders or end users) requirements and provide a package of hardware. predominantly Taiwanese suppliers. Some companies design their own boards. The current trend is towards the “buy” (brand label) rather than the “make” strategy.com • For Internal Use Only . Many solution providers have modular. but these 13 percent generate about 29 percent of worldwide revenue. While customer needs trigger most of the trends. Many companies also brand label IPCs from other suppliers. The largest market share is made up by product suppliers that often tailor their products to dedicated applications. since these are either product or system providers. standardized products ready to customize to a customer’s specific needs. Component suppliers still primarily doing component business as compo- 3-2 • Copyright 2010 © ARC Advisory Group • ARCweb. The number of solutions providers is only 13 percent of all companies. buy decision. but have them manufactured in Taiwan. Depth of production varies greatly between suppliers and touches all aspects of an IPC. Number of Companies in % 10% 48% 28% 13% Revenue USD $ $ $ $ 47 711 367 455 in Market Share in % 3% 45% 23% 29% Companies Component Supplier 6 Product Supplier System Provider Solution Provider 29 17 8 Figure 3-2: Segmentation by Strategic Position We’ve described the main technology and application trends in Chapter 4. Many companies use boards from Taiwan in their IPCs. where some companies use proprietary software (primarily Unix-based).

Beckhoff. Copyright 2010 © ARC Advisory Group • ARCweb. technology still improving USD 1. Eaton. Competitors About 10 with global relevance Technology is developing in two ways: 1.804 USD 2. New entrants include both PC or PC component suppliers from Taiwan. B&R. Baumüller. and automation seeking their to PC suppliers enlarge business.749 500 to 10000 USD Slow price erosion and increasing capabilities Constant Trend Slowly aging 8.Industrial PC Worldwide Outlook • Market Shares nents (such as boards) only make up 3 percent of the market.com • For Internal Use Only • 3-3 . will continue to attract new competitors. for example. which will continue to grow over the long run. Smaller more dedicated to have PAC functionality 2. Indicator Market Maturity Revenue 2009 Potential to 2014 & CAGR Prices Current State Growing. More computing power The unique product and long-term support requirements of some industries represent a barrier to market entry. The pressure to be able to provide one-stop shopping increases the attractiveness of brand labeling. Kontron. Kontron. Schneider Electric. and Siemens all use brand labeling or sales/technical partnerships to expand their product portfolios in one way or the other. companies that also offer automation equipment have captured roughly 50 percent of the market. The market dominance by system or solution providers that can offer single-source supply represents another barrier to entry. is segmented as a product supplier. Technical Change These two direction will continue to drive the market. Mitsubishi. In the fragmented and highly IPC competitive Asian market. Figure 3-3: Operator Panels – a Brief Market Overview suppliers are driving down prices for these largely commodity products.8 % CAGR The IPC market.

This is largely due to the demand for products. and are merging automation layers. price plays a larger role than in Europe. rooted in PC-based automation. Segmentation of Industrial PC Vendors The old automation hierarchy. instead of systems or solutions. new suppliers. This table shows that solution providers have secured the second largest market shares and is the only group that revenues ex- Figure 3-4: Factors determining the competitive environment ceeded the market average I revenue by company. Both solutions. are complementary in some areas. Typical new entrants to Asian market are display or panel PC providers. On the other hand.or IPC-based. It is important to stress that these companies have the highest percentage of brand labeling revenue from all sales strategy groups and their actual market share is therefore larger than 3 percent. such as PACs. suppliers that are rooted in this old hierarchy are moving towards common architectures. 3-4 • Copyright 2010 © ARC Advisory Group • ARCweb. with strictly segregated layers for controllers and operator panels.Industrial PCs Worldwide Outlook • Market Shares In Asia. is slowly fading away. they are only responsible for 3 percent of the revenue made. whether PAC. On the one hand. and thus do not yet face product cannibalization on a large scale. Table 3-2 already clustered the players by sales strategy. barriers to entry are lower in emerging economies than in Europe or North AmeriBarriers to entry Factors that attract new competitors Scalable product with easy to implement “buy” decision for components Growth market Technological change offers the chance to “get the next train” For one stop automation shopping much non-PC technology is needed ca. Difficulties to implement specific industry requirements Price competition with Asian suppliers Lack of customer base Longivity and support of product Competitive Analysis The next section clusters and analyzes players that are active in the market for industrial PCs.com • For Internal Use Only . are also penetrating the market for operator panels using open architectures. As a result. Component suppliers are less competitive and even though they are 10 percent of the analyzed market.

Electronics. TCI 25 percent Axiomtek. Focused automation suppliers: These companies are also rooted in the old automation hierarchy. like Omron or Mitsubishi. such as Stahl HMI. and Schneider. torn. Evoc. Copyright 2010 © ARC Advisory Group • ARCweb. Phoenix Contact 16 percent Several focus industries B&R. Although each player has a certain focus in this hierarchy. but do not have a complete portfolio. Mitsubishi Electric. PC-based control suppliers: These companies focus on PC-based automation products. brand labeling as sales channel Sell IPCs in order to participate more in the value chain. like Beckhoff or B&R. Boser.Industrial PC Worldwide Outlook • Market Shares Full Line Automation Suppliers Business Model Offer complete set of automation products and solutions Focused Automation Suppliers Offer selected set products and solutions. from complete to basic functionality Global Not complete. Rockwell. as well companies that have a wide portfolio. BEG. This category includes companies that are specialized. and companies that have a strong focus. regional in IPCs No industry focus Industry Split Examples All industries Few focus industries Hitachi. like Kuhnke. rooted in the PAC/ PC architecture. large share of embedded PCs Global with gional focus re- Pure IPC Supplier Specialized in Silicon Focused on product business. Siemens. including companies that are already well-established in the IPC market. core business remains boards and cards Mostly Complete IPC Portfolio Varies heavily. solution business less developed Mostly complete. Siemens Aaeon. Examples are GE Fanuc. they share similar business models. only some IPCs in portfolio Global with strong regional focus Complete Regional Spread Global to regional Global in components.com • For Internal Use Only • 3-5 . Beckhoff. from sensors to planning software. Advantech. Omron. National Instruments 23 percent Spezialists Generalists and Rockwell Automation. rooted in the PLC architecture PC-based control Supplier Offer variety of PC-based products. Noax.Bürkle. NEC ICP Kon- Market Share 19 percent 17percent Figure 3-5: Supplier Segmentation by Business Model Full line automation suppliers: This category refers to suppliers that offer the complete range of automation products.

there are also many European companies (Noax. including IPCs. Taiwanese Suppliers Intel makes nearly one fourth of its revenue in Taiwan.). which helps explain the importance of Taiwanese IPC suppliers and the need for further competitive analysis. their IPC business is still regionally focused (see NEC).com • For Internal Use Only . Many more companies are not visible. While they are often based in Taiwan (Aaoen. USD $ 335 Revenue in Mio. While their silicon business is global. USD $ 265 $ 58 $ 12 / / $ 335 Revenue in Mio. etc. BEG-Bürkle. Our analysis does not reflect the total revenue generated by these Taiwanese firms.Industrial PCs Worldwide Outlook • Market Shares Pure IPC supplier: This category includes companies that specialize in industrial PCs and are primarily (though not exclusively) offer IPCs. Boser.). Specialized in Silicon: These players offer nearly everything that has to do with silicon. they are not focused on a specific industry. or in brand-labeled 3-6 • Copyright 2010 © ARC Advisory Group • ARCweb. Number of Companies 14 Number of Companies 7 6 1 % of WW market 23% % of Tw market 50% 43% 7% Revenue in Mio. since many specialize in board-level or other intermediate products. etc. Often. USD $ 37 $ 298 / / $ 335 % of WW market 17% % of Tw market 79% 17% 4% Taiwan Speciallized in IPCs Specialized in Silicon Products PC based automation Supplier Focused Automation Company Full line Automation Supplier 14 Number of Companies 5 9 100% % of Tw market 36% 64% 100% % of Tw market 11% 89% Component Supplier Product supplier System provider Solution Provider 14 100% 100% Figure 3-6: The Case of Taiwan We’ve analyzed 13 Taiwanese companies that supply IPCs to the global market.

Figure 3-7 shows that $148 $48 56% 18% 22% 21% 13% 13% there is a structure to the number of embedded PCs by strategic positioning. This strict definition excludes many products that the suppliers identify as embedded PCs. System providers have the lowest level of embedded PCs. Looking at PC-rooted suppliers (not highlighted) the opposite seems to be true. the larger the share of direct sales.com • For Internal Use Only • 3-7 . There are no system or solution providers in Taiwan. Figure 3-7 shows the different sales channels for different business models. this is often an uphill battle. Component and product suppliers offer a large range of embedded PCs. USD Embedded PC Component Supplier Product supplier System provider $9 % of total in IPCs 3% % of revenue in Group 19% since these often have rotating parts or are not designed to fit a predefined application. both from a portfolio perspective and because Taiwanese companies as a whole do not have a great image in Europe.Industrial PC Worldwide Outlook • Market Shares IPCs (see chart). since a pre-defined hardware is a sales argument. The two companies rooted in the PLC world (focused automation suppliers and full line automation suppliers) show a general trend: the larger the portfolio (and the company). This is because the more component-oriented businesses of both silicon specialists and pure IPC suppliers require a high degree of customization. The Case of Embedded ARC defines “embedded” PCs as those with no moving parts and that are designed and built for a specific. and all companies have a focused portfolio. pre-defined application. Copyright 2010 © ARC Advisory Group • ARCweb. Business Models and Sales Channels Sales channels can differentiate an IPC supplier and help avoid harmful price competition to provide a strategic advantage. Solution providers offer embedded PCs in their portfolios to be able to complete their solu- Solution Provider $59 Figure 3-7: Embedded PCs in the IPC Market tions. Though many Taiwanese companies are now trying to establish themselves as solution and system providers to the European market.

Industrial PCs Worldwide Outlook • Market Shares Figure 3-8: Sales Channel by Supplier Type The difference in sales channels also emphasizes the problem many Taiwanese supplier encounter: successfully selling solutions or products in Europe require both a large sales/service force and a different business model. B&R could also be segmented as a focused automation company.  Innovation is evaluated in terms of speed. SWOT Analysis of Business Models Each business model in the segmentation above has its own strengths. and threats (SWOT).com • For Internal Use Only . ARC looks at the business models with certain indicators. These include:  Expansion refers to how aggressively companies are searching for new markets and whether they are doing so with aggressive price competition or innovation. have similar difficulties in Asia. Please note that the business models described are an ideal representation. Even though we list company names as examples. 3-8 • Copyright 2010 © ARC Advisory Group • ARCweb. and gained value-to-price propositions. For example. European suppliers. however. speed to market. customer focus. weaknesses. the segmentation is only a best fit. opportunities.

customer knowledge and cooperation.Industrial PC Worldwide Outlook • Market Shares  Technology and assets create barriers to entry in the form of knowhow (technological. etc. and many in-house Copyright 2010 © ARC Advisory Group • ARCweb. and tailored solutions.  Operational excellence reflects a company’s ability to operate with low costs. These help to stabilize growth and enables larger R&D expenditure.) Opportunities  Two-way strategy (product and solution) Regional price discrimination with solution business  Acquisitions  Fast supply of solutions in identified growth markets  Large R&D expenditures  Trend towards complete solutions for OEMs (including mechatronics)  Support OEM services with leverage of installed base Threats  Asian suppliers for product business  Established markets maturing Figure 3-9: SWOT for Full-Line Automation Suppliers Their core strength results from their size (large R&D investments. maintain price leadership. and price positions. economies of scale. customer needs). financial position. Strength  No need push either PLC or PC technology  Large R&D investments are possible  Solution business on the basis of standard in-house products  Strong financial position  Economies of scale in production  Market Power through installed base  One worldwide service network Weakness  Organization overhead  Lack of customization that exceeds standard products  Industrial PCs are often not the core business  Late market entrance in growing niches  Legacy costs (technological. and offer global services. worldwide network. SWOT: Full-Line Automation Suppliers Full-line automation suppliers’ broad portfolios and regional and industrial spread is a double-edged sword.  Customer intimacy considers brand loyalty. but their sheer size makes these companies less flexible.com • For Internal Use Only • 3-9 .

the strength of focused automation suppliers in specific industries and/or regions makes it relatively easy for them to expand into new markets. Though many offer a sufficient level of customization (adjustment of front plate. Products typically represent a large percentage of the full-line automation suppliers’ overall business. investments have to be carefully planned. Obviously. Europe. SWOT: Focused Automation Suppliers Focused automation suppliers represent perhaps the most diverse group in this analysis. The rise and the growing importance of Asian suppliers represent the most important threat. Many of those focused companies gain experience from complete automation suppliers that enter these attractive niche markets as soon as they reach critical mass. chose among the various standard modules) large suppliers are less open to new development from customers. these companies are nearly exclusively based in North America. However.Industrial PCs Worldwide Outlook • Market Shares products available). who up to now. They typically provide products and solutions for certain layers in the automation hierarchy. Their IPC-specific focus is relatively small and even though those companies make up 30 percent of the study sample. For many. and Japan.com • For Internal Use Only . some opportunities remain largely unexploited. Notably. This often places them in direct competition with Asian IPC product suppliers. R&D expenditures are often relatively low. Even though these large companies have the possibility to leverage economies of scale. IPCs typically represent only a small portion of their overall portfolio. Siemens’ sheer bulk bias’ the results here to a certain extent. could only compete on price. operational excellence can suffer due to organizational overhead. since financials are sometimes limited (many in this group are small-to-medium-size enterprises). making up 9 percent of our sample in the market research and accounting for nearly 20 percent of all revenue. For example. this group is successful in the market. 3-10 • Copyright 2010 © ARC Advisory Group • ARCweb. however. Certainly. or focus too much on hardware. they account for only 16 percent of the revenue.

com • For Internal Use Only • 3-11 . European companies dominate this group. and Taiwan are also represented. Some Taiwanese and Chinese PC companies are also trying to establish themselves as PC-based control suppliers. and thus predominantly focus on their home market.Industrial PC Worldwide Outlook • Market Shares Strength  Either solution or operational excellence driven  Clear position of company  Very strong in core markets (price / technology)  Strong participation in core market growth Weakness  Often not complete IPC portfolio  Rooted in the old automation world – strong position is a double edged sword  Lack of network (sales/services) in not-core markets  Investments in R&D and Infrastructure is often not possible – decision needed  Sometimes not enough in-house products to be solution provider or onestop shopping provider Opportunities  Markets with similar needs of the core market offer growth possibilities  Growth through regional spread or technological enlargement is possible  Acquisitions create less redundancies  Customer centric innovation in saturated markets  Specialists move into new regional markets with existing solutions Threats  Total dependency on one or a small number of core markets (industries and regions)  heritage costs of old products could be large  Broad automation suppliers that penetrate niche market  Product business in mature markets will decline  Price competition Figure 4-10: SWOT for Focused Automation suppliers SWOT: PC-Based Control Suppliers The companies in this segment experienced tremendous growth during the last years. the United States. but some companies from Asia. with standardized modules for manufacturing lines. Benefiting from the ongoing success of PC-based control in general and individual achievements in operation excellence. Copyright 2010 © ARC Advisory Group • ARCweb. PC-based control suppliers can efficiently leverage the modularity of their key product to offer front office flexibility. many have successfully established their brand in the market. The Taiwanese companies often lack deep domain knowledge of the automation business in mature economies. This group represents 12 percent of the study sample and makes up 22 percent of the revenue.

a global. a specialized German IPC supplier with roughly 14 million USD revenue. small and specialized players from mature economies focus on customer-centric innovations and developing a close relationship with their customers. and BEG-Bürkle.Industrial PCs Worldwide Outlook • Market Shares Strength  Leverage of modular.costly  Lack of network (sales/services) in not-core markets  Investments in R&D and Infrastructure is often not possible – decision needed  Solutions need non PC-based technology Opportunities  Growth through regional spread or technological enlargement is possible  Open and scalable technology is easy to adjust to new requirements  Customer centric innovation in saturated markets  Pressure towards operational excellence in Asian markets  As Taiwanese suppliers of boards and mezzanines move to industrial make/buy decisions could be reconsidered and leveraged Threats  Larger suppliers increasingly enter the market for IPCs  Asian suppliers move up the value chain  Differentiation in product business is hardly possible  Broad automation suppliers that penetrate niche market  Price competition Figure 3-11: SWOT for PC-based Control Suppliers SWOT: Pure IPC Supplier IPCs are the sole or main source of revenue for pure IPC suppliers. multi-million dollar Taiwanese company. Many have a productfocused business and sales structures that directly connect them with OEMs and end users (a strength that quickly becomes a liability when core markets suffer). The capital-intensive sales structure represents a hurdle to exploring new markets. 3-12 • Copyright 2010 © ARC Advisory Group • ARCweb. This includes both Advantech. For this type of business Taiwanese IPC suppliers are much better-positioned for this type of business than are those from mature economies. and the small size and relatively high prices make these companies unattractive for brand labeling agreements or other partnerships.com • For Internal Use Only . scalable and adjustable core product  PC technology in automation is a boom market  industrial PC is the core of business  high speed of innovation  Often technology and/or price leaders  Focused on industries gives clear market position Weakness  Some companies (especially from Taiwan) lack automation knowledge  PC focus sometimes needs missionaries . While most of the Taiwanese companies in this category leverage their low production costs.

Industrial PC Worldwide Outlook • Market Shares

Strength

 Leverage of modular, scalable and adjustable core product  PC technology in automation is a boom market  Technological leader for IPC hardware (European/US based suppliers)  Price leaders for IPCs (Asian suppliers)  customer centric innovations  Brand labeling business (Taiwanese suppliers)

Weakness

 Lack of network (sales/services) in not-core markets  Less visible for end users  Small niche players offer not enough benefits for a collaboration with large suppliers  Investments in R&D and Infrastructure is not possible for small companies  Solution business (need of non PC-based technology)  Lack of operational excellence (IPC suppliers based in US/Europe)  Some companies (especially from Taiwan) lack automation knowledge

Opportunities

 Growth through regional spread or technological enlargement is possible  Open and scalable technology is easy to adjust to new requirements  Customer centric innovation in saturated markets  Benefit from brand labeling pressure of larger suppliers (especially Taiwanese)  High quality product business fin emerging markets

Threats

 Larger suppliers increasingly enter the market for IPCs  Asian suppliers move up the value chain and increase competition  Differentiation in product business will disappear  Price competition Figure 3-12: SWOT for Pure IPC Suppliers

SWOT: Specialized in Silicon

This group of companies is perhaps the most diverse and heterogeneous. It largely consists of hundreds of small to very small companies, mostly based in Taiwan, that predominately produce chips and boards, but also have some IPCs in their portfolios. Two companies in this group are particularly noteworthy: NEC and Kontron. Both are still making large share of their revenue with “silicon” but they developed a product and system business that is well received in the market. One of the greatest advantages these companies can and do offer is the ability to customize boards for specific applications. One of their best opportunities is to collaborate with automation suppliers to bundle the different product in order to create systems/Solutions, or new automation focused products. The strategic partnerships between Wago and Kontron is one example.

Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only • 3-13

Industrial PCs Worldwide Outlook • Market Shares

Strength

 Modularity/scalability on a very deep technological level – ease of developing new products  customization of boards  PC technology in automation rising  Scale effects in board manufacturing  Cross over with consumer electronics  Buying power  Partnerships with Intel/Microsoft  Operational Excellence

Weakness

 Lack of automation knowledge in many cases  Automation specific trends are recognized late  IPCs in manufacturing are not core business  Solutions for OEMs and End Users  Service network is often present but not automation focused

Opportunities

 Brand labeling with other suppliers  Partnerships with automation suppliers  New markets could be entered easily

Threats

 Own products are offered by competitors in an automation bundle  Competition is large  Price pressure is ever increasing  Small value add with final assembly of PCs since the boards etc. are already made Figure 3-13: SWOT for Silicon Specialists

Competitive Drivers
Competitive drivers for IPC suppliers can be organized into four areas: bargaining power of suppliers, bargaining power of customers, new competitors, and new substitute products. This is illustrated in Figure 3-13. New Competitors The threat of new competitors entering the market for industrial PCs is present and significant. There are several reasons for this. The first group of candidates likely to enFigure 3-14: Competitive Drivers (Source: Michael Porter)

ter the market consists of suppliers from the automation market. While nearly all PLC suppliers already offer IPCs, most do

not view them as strategic products. In addition, mid-sized automation

3-14 • Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only

Industrial PC Worldwide Outlook • Market Shares

suppliers such as Turck, ifm, and Sick, are less likely to enter the market since they already have well–defined, well-positioned product portfolios. However, some suppliers still may enlarge their product portfolio when they see strategic opportunities, either through acquisitions (Phoenix Contact acquired Sütron, Pepperl+Fuch acquired Extec), strategic cooperation (Wago and Kontron for industrial PCs), or through internal development. New Product Substitutes This is a major driver for competition in the IPC market. High-end operator panels directly compete with embedded industrial panel PCs since they offer similar functionality and competitive pricing. While embedded panel PCs offer the dedicated operating and monitoring tasks favored by many machine builders, automation panels still offer some distinct advantages, including fewer security issues and shorter implementation times. Currently, the “worlds” of operator panels and industrial PCs are separate but complementary. However, the rapidly growing automation panel subset of the operator panel market will increasingly compete with IPCs. Customer Bargaining Power Typically, the larger a customer, the greater the bargaining power it has to negotiate lower prices. After the 2009 recession, this bargaining power of IPC customers will get only increase as the OEM machinery market further consolidates, especially in Europe. The remaining machine builders will not only have more bargaining power, but will also insist on more solutions, rather than just products. Supplier Bargaining Power The most expensive single intermediate component for an IPC is the display. The display market is highly fragmented and will remain so as consumer and industrial markets fan the flames of growth, creating opportunities for new entrants, especially in Asia. In terms of processor units, the number of ARM chips (used in many automation devices, including IPCs), is large, but Intel is making advances into this market with the ATOM processor. So far, automation suppliers have been optimistic but not enthusiastic about the ATOM and many are still waiting until volume prices reach the level of about EUR 25 (USD 35) per chip.

Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only • 3-15

Industrial PCs Worldwide Outlook • Market Shares

Regional Markets
The regional markets differ significantly in their size and in their competitive landscape. Each geographical region has slightly different ways of doing business and each region has different technological requirements and attitude towards IPCs. Many factors determine buying behavior. These include cultural differences, differences in production processes, legacy issues, and various other business issues. Company Origin Asia (Including Japan) $ 633 $ 592 Unconcentrated 12% Moderate Concentration 27% Unconcentrated 19% Unconcentrated 18% Unconcentrated 14% 24% 42% Origin Sales Concentration % of Top Player % of Top 2 % of Top 4 Player Player

Japan EMEA North America Latin America

$ $ $ $

254 824 123 -

$ $ $ $

208 769 229 14

44% 34% 26% 26%

71% 52% 39% 14%

Figure 3-15: Regional Markets and Market Concentration

Europe, Middle East, and Africa While Europe hosts several of the largest players (Siemens, B&R, Beckhoff, Kontron), there are also many small, specialized IPC suppliers. Many nonEuropean companies have tried to get a foot in this market, but most have not had great success to date. Many Asian silicon providers have lost market share to Kontron during the last years and Asian IPC specialists have had a hard time establishing business in Western Europe. Many therefore concentrate on brand labeling agreements, manufacturing IPCs for companies like Beckhoff. For Western solution providers, the latest downturn forced some manufacturers to rethink their business models and to drive their production facilities towards greater productivity and efficiency. Companies from EMEA earn more than USD 824 in revenue. Most operate globally, with subsidiaries across the world.

3-16 • Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only

Industrial PC Worldwide Outlook • Market Shares

Asia Figure 3-15 shows both complete Asia and Japan. The company origin and origin sales numbers show how focused are the Asian and the Japanese companies. In both cases, local companies mainly serve the local market. While this is well-known in Japan, it is also true for the Chinese/Taiwanese market. While the Japanese market displays moderate consolidation, other Asian markets (including Taiwan) remain fragmented. The buying habits of Asian machines builders and end users differ from those of their European counterparts. In general, customers are less loyal, which poses new challenges to automation suppliers. For this reason, Asian markets could be better served by a product business approach that stresses basic functionality and price. This also affects the sales channel, and most Japanese and Asian suppliers depend heavily on independent distributors, while many German IPC suppliers build up their own sales channels, even for product business. The industrial PC market in Taiwan is the one of the most dynamic worldwide. In addition to many PC and IPC suppliers, many display manufacturers and machine builders are located here. The Chinese and Indian markets are perhaps the last markets that offer growth potential without cutthroat competition. The main barrier to entry in these markets is not only the strong price competition, but also the Asian way of doing business. The Americas What Siemens is in Europe, Rockwell Automation is in North America. Rockwell’s Allen-Bradley control equipment dominates the discrete industries here and Rockwell Automation is making inroads in the process industries, especially the hybrid industries such as food & beverage, pharmaceutical, and some parts of chemical. Even with several pure IPC suppliers, North America has with the smallest number of IPC manufacturers of any IPC market. Also, IPCs have not yet caught on in North America to the extend they have in other regions.

Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only • 3-17

Panel PC VISUEX PPC Line. IPC120 APROL Computers C51xx PB500. Microbox PC 427B 6180P Integrated Keypad. MEC-8641. milsystem. MEC5003. MEC-3002. and the ARK-4000 66T. IPC220. ePC-Plus Series VisuNet GMP. the Pegasus ICE. PR40xx IPC121. ICO-200 and Client Panel ICO-100 Computer Powerpanel 100 and 300 Bios. and Rack PC 847 B Box PC 627B. PB1200. FT600. IPC-BX 950 Series. IPC-PT 700 Series Eurotech VIPER ICE. RV500 WS500. 3002.com • For Internal Use Only . 6181 P/F — Performance Rockwell Automation 6177R (1450R) IPC547C. IPC221. Rack Mount Standard IPCs by Type 19" Rack Mount Box PC Panel PC APC series Advantech UNO-1000 and UNO-1100. UNO 4000 ARK 5280 series. MEC8823(C). MEC-4001. TPC series. WS600-TE. TPC 662G. 4002. ARK-3400 660G. AWS and IPPL Aplex eDOMO and DOMO1000 (both designed for Building Automation) HMI600. OT1000.Industrial PCs Worldwide Outlook • Market Shares Embedded PCs by Type DIN Rail Aaeon Adlink Technology Box PC AEC series DPAC. FT500. MEC-91021U. MECMEC-91011U. APOLLO ICE 1U. IPC-PT LS10 Series. MEC3003. MEC7001. C33 Xx seres with 19". VULCAN ICE. PB1000. Box PC 827B Siemens IPC 477 C Panel PC 577 AND 677 series Figure 3-16: Product Segmentation for Selected Suppliers 3-18 • Copyright 2010 © ARC Advisory Group • ARCweb. MEC-3003. WPC-1201 Provided Kontron Nematron Corporation Pepperl+Fu chs Phoenix Contact CB 751. PB1300. Jrex Micro and Nano Clients 1U. MEC-8822. TEP-DCU2001. MECMEC-94024U 9003 IPC-PT 020 Series. KIM series and the V Box Express nPC200 Series.vAdRC-EXP1. V Box Express II. MEC0031. and the UNO-3000 series TPC 870 H. MEC-8821. VisuNet. WS500. SMARTBOX. V Box.Panel PC 700 IPC C61xx to IPC CP series. C36xx C66xx series FemtoBox PicoBox NanoBox* CompactBox BBS 4xxx series BPC series Contec IPC-PT 030 Series IPC-BX 700 Series. MEC-4001. IPC-BX 800 Series. Rack PC 647B. MEC3001. the and APCBX-400F. IPC-BX 720 Series. FT500-TE . OT1200. MEC4002. IPC-BX 701 Series. Valueline. MEC-9001. TPC 1270 H. and the Bx-400FN270 ICE-VIEW VX series EVOC Group ICP Electronics ThinkIO (ThinkIO Duo and ThinkIO P) MEC-4004. and the TPC Series PC 30 series. readysystem series Panel PC AOP series. PB800 OT1300 VTA Series. IPC-PT MV10 Series. PB600. PC 620 Panel PC 300 PR90xx. MEC-5004 Provided PPC series and EWS series. MEC-94014U. PANEL2000 Slim eBOX series. ruffsystem. PB70xx Vertical Purpose Embedded System PC 820 PC 620 PANEL1000 Series BEG Bürkle Boser ECOline and PROline series BBS 2xxx and BBS 3xxx series BX-100n Series. WS600. IPC-PT SV10 Series. TPC 660E. 3U CompactPCI Systems Concept Box. 2U and 4U. IPC423. TPC series. SB600/800 Series V Panel and V Panel Express RM1400 ePC-Series. TPC 1770H . 6181H Hazardous Location IPC427C. MEC-9002. WS500-TE. MEC-5002. OT800. IPC-BX 10 Series BPF series BBS 1xxx series Panel PC 400. VMT series IPC series (blind nodes) 6155R/F (200R). MEC-1001. IPC-BX 840 Series. IPC421. ARK-1300 & ARK-3300 TPC 120H. IPC-BX 360 Series. 6177R (650 and 750R). expansible compact TPC 66SN. MECMEC-92012U. TPC 1261H. IPC-Ex. and the INDUSTRIAL PC BX-400P MEC-9403. FT600-TE ASEM AXIOMTEK B&R Beckhoff CX series FemtoBox PicoBox NanoBox* CompactBox OT600.UNO-2000 series. PC-BX 900 Series GEMINI ICE 1U. and TPC 1750 H.

gaming. and open communication between devices. Siemens Industry’s revenue through the first three quarters of Copyright 2010 © ARC Advisory Group • ARCweb. This strategy requires an industrial PC portfolio that covers each segment and complements each product line.Industrial PC Worldwide Outlook • Market Shares Leading Suppliers of Industrial PCs All leading suppliers of industrial PCs have their unique strategies. Siemens strictly focus on manufacturing. while factory automation incoming orders dropped by 42 percent on a year-to year-basis. With extensive IPC and PLC lines. Siemens Siemens remains the top player in this market with its comprehensive range of products and services. While Siemens is also the market leader in industrial PCs. Taiwanese suppliers dominate the Chinese IPC market. offering integrated products means that customers are likely to purchase more components (one-stop shopping) rather than having to integrate best-of-breed products from multiple suppliers. Siemens positions itself as a system and solution provider. Siemens’ companywide revenue was down 4 percent. Siemens does not need to push one technology over the other and distributes both through the company’s worldwide sales network. Kiosk. an integrated product line means easier and shorter startup times. For Siemens. In addition Siemens is the only company that offers failsafe soft PLCs. which creates unique selling proposition. In Q3 2009. Siemens emphasizes the integration of its products with its key concepts of Totally Integrated Automation (TIA) and Totally Integrated Power (TIP). since companies like Advantech or Kontron also focus heavily on POS/POD. For the customer. Siemens is the largest automation provider in Europe. Siemens is the only suppliers that offer a TÜV certified industrial Wireless LAN for its Wireless products. the distance to competitors is much smaller in this market. common configuration tools. There are some other companies are bigger industrial PC suppliers than Siemens.com • For Internal Use Only • 3-19 . While Siemens is traditionally strong in China. making it worth taking a closer look. This forces other suppliers to offer compatibility with the Simatic S7-series PLC. As a complete automation supplier. or military.

a business model that focuses on providing project-oriented. connectivity. One of Advantech’s first products were IO modules. primarily in growth regions such as China. with between 20 to 40 percent of its revenue gained from brand labeling. The company’s strategy is to gain market share by convincing its customer base of the high value 3-20 • Copyright 2010 © ARC Advisory Group • ARCweb. which differentiates it from other Taiwanese suppliers. B&R leverages it modular product design to keep development keep costs low. B&R B&R stands out as a fast-growing company with a strategy of engaging high-level technical personnel and developing leading-edge. With IPCs as its core product. which cushioned the drop in revenue from Siemens Industry. Advantech focused on automation from the start. and customizable products. Advantech also benefits from the strong demand from infrastructure projects in emerging economies. The company continues to acquire new customers. etc.Industrial PCs Worldwide Outlook • Market Shares 2009 dropped by 13 percent to EUR 8. Advantech Advantech is the only Taiwanese company accepted as a global IPC supplier. Advantech benefits from its regional strength in China and emerging Asia and from the large number of greenfield projects in this region. Even though 2009 was also a tough year for B&R in terms of revenue. However. IO modules. Advantech also focuses on growth markets like energy production and building automation. and Eastern Europe.com • For Internal Use Only . B&R is growing fast by capturing OEM customers with proven solutions -. broad-level solutions for machine builders. Advantech is also strong in brand labeling.1 billion. scalable. and on key applications. India. the company mainly brand labels products for non-manufacturing applications. B&R continues to expand globally and has opened many new offices worldwide. Advantech offers a degree of customization that very few other suppliers can match. Siemens benefits from its energy and healthcare sectors. Advantech also builds boards and other intermediate products for specialized applications that require specific form factors. like energy monitoring. while reinvesting approximately 18 percent of sales in R&D. industrial Ethernet. China is Advantech’s biggest market.

Beckhoff leverages the modularity of the product. Modular design is a key strength that gives the customer a great variety of choices. Conceived as a pure software PLC. The standard IPC line also focus’ on these areas (Box: PC 820 and PC 620. and Panel: Panel PC 400. or integrated into a control system. Beckhoff experienced double-digit growth rates prior to the crisis.com • For Internal Use Only • 3-21 . IO modules. Beckoff designs its products to able to be used as separate components. For example. The Beckhoff “New Automation Technology” philosophy stands for universal and open control and automation solutions for a wide variety of applications. the C51xx. nearly every product that Beckhoff offers is based on PC technology. but touch/function key monitors for industrial PCs. and automation software. Panel PC 300). Beckhoff is well-known for its DIN rail PCs. Many offer modular design to include an individual number of PCI cards. TwinCAT PLC allows up to four virtual “PLC CPUs”.Industrial PC Worldwide Outlook • Market Shares proposition of its solutions. In the industrial PC market. each running up to four user tasks on one PC. B&R also leverages PC technology in other products.Panel PC 700). B&R’s embedded IPC product line focuses on panel (PC620) and box IPCs (Powerpanel 100 and 300 Bios. a segment in which it is a clear market leader. Copyright 2010 © ARC Advisory Group • ARCweb. The IPC lines C61xx to IPC C66xx include box PCs that are primarily designed to be mounted in a control cabinet. Beckhoff supplies industrial PCs for control requirements and has a strong focus on building automation. Beckhoff While most companies emphasize their PC technology. Beckhoff’s control panels are not operator panels in the classical sense. The embedded PC line only includes the CX models. Like all industrial PC suppliers. such as PACs. accompanied by project services with attention to detail. but the company still has some holes to fill in its portfolio (such as embedded panel PCs). One B&R strength is modular design. B&R is one of the top players in terms of revenue and technology. panel PCs could be purchased with the PC 620 series core. The product range covers industrial PCs. The core of Beckhoff’s strategy is an open automation system based on PCbased control technology. drive technology. and fieldbus components. a key feature in any product line. Nineteen-inch rack mount industrial PCs consist of one series.a product for which Beckhoff is well known. which are DIN rail embedded PCs .

telecom. 3-22 • Copyright 2010 © ARC Advisory Group • ARCweb. This includes custom board design in small lots.com • For Internal Use Only . EVOC experienced 15 years of strong growth. As a global supplier of boards and cards. automation-based IPC suppliers cannot. The Think IO is collaboration with Wago. electric power. Certainly. banking. Kontron backs its products with a standard three-year warranty and guarantees that its products will be available for seven years. energy. While Kontron has managed to stay ahead of many of its competitors based largely on the strict quality standards applied and the “made in Germany” logo. EVOC Group China-based IPC supplier. system houses. Kontron Elektronik sells its industrial computers directly.Industrial PCs Worldwide Outlook • Market Shares To enable an aggressive growth strategy. manufacturing. Kontron German-based Kontron has succeeded in doing what many Taiwanese companies are still trying to achieve: to develop a complete IPC portfolio for nearly all industries as well as a well-established and well-known business in parts and intermediate products. such as traffic systems. For Kontron. Kontron offers many features that other. Beckhoff also brand labels part of its portfolio. enabling the company to do well through 2009. and networking. gaming. sports. industrial automation is a relatively small part of its overall business. largely due to its business in telecommunications and infrastructure. benefitting from the general growth in the Chinese home market. which contributed IO modules and other hardware. provides embedded products and system-integrated solutions for various applications. Now. and the company's own sales forces. Kontron will surely have to re-think its business model over the long term. as well as through leading partners. The solutions business remains focused on the embedded side – including custom board development for OEMs or end users. medical care. EVOC is penetrating emerging economies and trying to break into the industrial automation market. EVOC. Kontron competes with many rising companies in Germany and is also a recognized player in China and other emerging markets.

Industrial PC Worldwide Outlook • Market Shares EVOC has had only limited success establishing itself as an important player outside of China and emerging Asia. partly to a lack of knowledge about the European machine manufacturing market. is also available in a heavy-duty model.to-year basis. especially panel PCs. the owner of Pro-face. Even though NEC is a globally oriented company. building. Display Driver.com • For Internal Use Only • 3-23 . The poor overall economic performance of its home market in 2008 and 2009 heavily affected NEC. data center and networks. Memory. NEC Japan-based NEC Corporation was founded in 1899. it’s IPC business focuses primarily on the Japanese manufacturing industry. Schneider launched its “ONE company” program. Schneider Electric Schneider Electric. which can accommodate PCI cards. The Magelis IPC series from Schneider has been reduced to some core products. ASIC. Schneider Electric also offers a box PC (Control box 102 and 402) that could be used as a standalone PC. focuses primarily on power and control. including the acquisition of Digital Electronics. The Smart Box is an embedded box PC. NEC is a siliconfocused manufacturer with all the associated challenges. or combined with a screen to create a modular panel PC. Microcontrollers. and so on. Outside of Japan. The Flex PC BOX. namely the price drop and competition with Taiwanese suppliers. a global automation supplier with headquarters in France. This is partly due to its late market entrance. Digital AV. NEC is well-known in the automation community as a supplier of silicon products for IO link. Recently. Rather than focusing purely on price competition. an initiative to integrate the many brands it has acquired over the years. and energy and infrastructure markets. with revenue and orders falling by 29 percent and 30 percent respectively in Q3 on a year. Schneider Electric continues to invest actively to grow its automation business. industry. and partly due to its less developed product portfolio. In this regard. Schneider Electric’s IPC offering is Copyright 2010 © ARC Advisory Group • ARCweb. Schneider Electric has been hit hard by the economic crisis. EVOC also invests heavily in R&D to enlarge its revenue share from higher margin segments of the industrial PC market. However. the company also serves the residential.

3-24 • Copyright 2010 © ARC Advisory Group • ARCweb. as well as than many competitor’s IPC product lines.Industrial PCs Worldwide Outlook • Market Shares less developed than many of its other product lines.com • For Internal Use Only .

Market Shares Group Figure 3-1 Leading Suppliers of Industrial Personal Computers 2009 = 1.For Internal Use Only .www.com .ARCweb.803.8 Million US Dollars Other = 37.5 % Copyright 2010 © ARC Advisory Group .

www.Market Shares Group Figure 3-2 Leading Suppliers of Industrial Personal Computers for North America 2009 = 265.3 % Copyright 2010 © ARC Advisory Group .com .0 Million US Dollars Other = 30.For Internal Use Only .ARCweb.

Market Shares Group Figure 3-3 Leading Suppliers of Industrial Personal Computers for EMEA 2009 = 850.com .2 Million US Dollars Other = 32.5 % Copyright 2010 © ARC Advisory Group .ARCweb.For Internal Use Only .www.

www.3 % Copyright 2010 © ARC Advisory Group .ARCweb.For Internal Use Only .Market Shares Group Figure 3-4 Leading Suppliers of Industrial Personal Computers for Asia 2009 = 672.4 Million US Dollars Other = 32.com .

1 Million US Dollars Other = 20.com .9 % Copyright 2010 © ARC Advisory Group .For Internal Use Only .Market Shares Group Figure 3-5 Leading Suppliers of Industrial Personal Computers for Latin America 2009 = 16.ARCweb.www.

2 % Copyright 2010 © ARC Advisory Group .ARCweb.Market Shares Group Figure 3-6 Leading Suppliers of Industrial Personal Computers for Chemical 2009 = 76.2 Million US Dollars Other = 30.com .www.For Internal Use Only .

7 Million US Dollars Other = 26.com .ARCweb.www.Market Shares Group Figure 3-7 Leading Suppliers of Industrial Personal Computers for Oil & Gas 2009 = 61.For Internal Use Only .8 % Copyright 2010 © ARC Advisory Group .

ARCweb.2 Million US Dollars Other = 35.Market Shares Group Figure 3-8 Leading Suppliers of Industrial Personal Computers for Food & Beverage 2009 = 196.6 % Copyright 2010 © ARC Advisory Group .com .For Internal Use Only .www.

7 Million US Dollars Other = 22.2 % Copyright 2010 © ARC Advisory Group .ARCweb.For Internal Use Only .com .Market Shares Group Figure 3-9 Leading Suppliers of Industrial Personal Computers for Pharmaceutical & Biotech 2009 = 81.www.

com .1 % Copyright 2010 © ARC Advisory Group .www.5 Million US Dollars Other = 32.For Internal Use Only .Market Shares Group Figure 3-10 Leading Suppliers of Industrial Personal Computers for Pulp & Paper 2009 = 69.ARCweb.

7 Million US Dollars Other = 26.com .ARCweb.Market Shares Group Figure 3-11 Leading Suppliers of Industrial Personal Computers for Electric Power 2009 = 168.www.For Internal Use Only .5 % Copyright 2010 © ARC Advisory Group .

3 % Copyright 2010 © ARC Advisory Group .Market Shares Group Figure 3-12 Leading Suppliers of Industrial Personal Computers for Water & Wastewater 2009 = 102.www.5 Million US Dollars Other = 34.ARCweb.For Internal Use Only .com .

0 % Copyright 2010 © ARC Advisory Group .9 Million US Dollars Other = 17.www.Market Shares Group Figure 3-13 Leading Suppliers of Industrial Personal Computers for Cement & Glass 2009 = 8.com .For Internal Use Only .ARCweb.

For Internal Use Only .ARCweb.Market Shares Group Figure 3-14 Leading Suppliers of Industrial Personal Computers for Automotive 2009 = 136.com .5 % Copyright 2010 © ARC Advisory Group .www.7 Million US Dollars Other = 35.

Market Shares Group Figure 3-15

Leading Suppliers of Industrial Personal Computers for Aerospace & Defense
2009 = 23.9 Million US Dollars

Other = 14.6 %

Copyright 2010 © ARC Advisory Group - For Internal Use Only - www.ARCweb.com

Market Shares Group Figure 3-16

Leading Suppliers of Industrial Personal Computers for Semiconductors
2009 = 177.5 Million US Dollars

Other = 32.3 %

Copyright 2010 © ARC Advisory Group - For Internal Use Only - www.ARCweb.com

Market Shares Group Figure 3-17

Leading Suppliers of Industrial Personal Computers for Building Automation
2009 = 138.6 Million US Dollars

Other = 31.7 %

Copyright 2010 © ARC Advisory Group - For Internal Use Only - www.ARCweb.com

Market Shares Group Figure 3-18

Leading Suppliers of Industrial Personal Computers for Machinery Manufacturing
2009 = 255.2 Million US Dollars

Other = 31.1 %

Copyright 2010 © ARC Advisory Group - For Internal Use Only - www.ARCweb.com

Market Shares Group Figure 3-19

Leading Suppliers of Industrial Personal Computers for Electronics & Electrical
2009 = 117.0 Million US Dollars

Other = 23.4 %

Copyright 2010 © ARC Advisory Group - For Internal Use Only - www.ARCweb.com

ARCweb.5 % Copyright 2010 © ARC Advisory Group .com .7 Million US Dollars Other = 21.For Internal Use Only .Market Shares Group Figure 3-20 Leading Suppliers of Industrial Personal Computers for Robotics 2009 = 64.www.

0 Million US Dollars Other = 40.com .6 % Copyright 2010 © ARC Advisory Group .For Internal Use Only .ARCweb.www.Market Shares Group Figure 3-21 Leading Suppliers of Industrial Personal Computers for HMI 2009 = 598.

Market Shares Group Figure 3-22 Leading Suppliers of Industrial Personal Computers for Vision 2009 = 64.www.For Internal Use Only .ARCweb.com .1 % Copyright 2010 © ARC Advisory Group .4 Million US Dollars Other = 7.

For Internal Use Only .4 Million US Dollars Other = 22.www.ARCweb.Market Shares Group Figure 3-23 Leading Suppliers of Industrial Personal Computers for Logic (Soft PLC) 2009 = 193.1 % Copyright 2010 © ARC Advisory Group .com .

9 Million US Dollars Other = 14.8 % Copyright 2010 © ARC Advisory Group .Market Shares Group Figure 3-24 Leading Suppliers of Industrial Personal Computers for Distributed Control (Soft DCS) 2009 = 92.www.For Internal Use Only .ARCweb.com .

For Internal Use Only .5 Million US Dollars Other = 16.ARCweb.com .2 % Copyright 2010 © ARC Advisory Group .Market Shares Group Figure 3-25 Leading Suppliers of Industrial Personal Computers for Motion 2009 = 62.www.

www.9 Million US Dollars Other = 16.9 % Copyright 2010 © ARC Advisory Group .For Internal Use Only .com .Market Shares Group Figure 3-26 Leading Suppliers of Industrial Personal Computers for CNC 2009 = 72.ARCweb.

1 Million US Dollars Other = 33.www.com .3 % Copyright 2010 © ARC Advisory Group .ARCweb.For Internal Use Only .Market Shares Group Figure 3-27 Leading Suppliers of Industrial Personal Computers for Data Acqisition 2009 = 330.

com .Market Shares Group Figure 3-28 Leading Suppliers of Industrial Personal Computers for Communication Gateway 2009 = 166.4 % Copyright 2010 © ARC Advisory Group .ARCweb.www.For Internal Use Only .9 Million US Dollars Other = 39.

The second describes different industries and the affects of the economic crisis. a company’s capital investments tend to be much more volatile than its actual production output.‖ For four years through the summer of 2007. Emerging markets had been growing steadily at 7 to 10 percent for years and property and stock market booms translated into remarkable growth in North America and Europe. with massive consumption in many developed and developing nations. the fifth section describes developments within the market for industrial PCs.Industrial PCs Worldwide Outlook • Market Analysis & Forecast Chapter 4 Market Analysis and Forecast The current economic crisis hit the market for industrial PCs (IPCs) hard. the need for improved monitoring of and increased visibility into a wide range of manufacturing production processes work to boost the market for IPCs. The fourth section looks at PLCs and other automation markets. In the current economic crisis. since overall demand for automation equipment has declined drastically. The first section summarizes recent global economic trends affecting the industrial automation market. Then things began to change. Japan was recovering from its deflationary ―Lost Decade. Huge investment fueled economic development further in Eastern Europe and the Middle East. Copyright 2010 © ARC Advisory Group • ARCweb. which are becoming more sophisticated. a drop in capital expenditures negatively affected the market for industrial PCs after years of good growth above average. The bubble economy. The third discusses the major geographical regions.its highest sustained rate since the early 1970s. The traditional suppliers of industrial PCs suppliers face increasing competition from lowcost Asian IPC providers as well as from operator panels that are becoming more sophisticated. We’ve divided this chapter into five main sections that identify important trends for future market development.com • For Internal Use Only • 4-1 . the end of a string of boom years. the traditional suppliers of industrial PCs face increasing competition from low-cost Asian IPC providers as well as from operator panels. the global economy boomed. The Global Economy and the Market for Industrial PCs In adverse economic climates. Global Economic Development The global economy began a steadily accelerating decline in about mid2008. Finally. On the other hand. Additionally. Global GDP rose at an average of about 5 percent per year . simply could not be sustained.

‖ The situation then changed abruptly. At first. with automotive and machinery market caving in during the latter part of 2008 and first half of 2009. the discrete industries took the brunt of the economic downturn.com • For Internal Use Only . Until the end of 2008. there were no signs of an industry-wide ―credit crunch. But spill-over effects have also affected process industries such as bulk and specialty chemicals and reduced capacity utilization significantly. the global economy began to contract because of uncertainties in financial markets. this was not seen as an economy-wide crisis. which started in early 2007 with the first collapses on the subprime market in the US.Industrial PCs Worldwide Outlook • Market Analysis & Forecast As early as 2007. The Economic Crisis – An Overview The first phase of the economic crisis was the financial crisis. Figure 4-1 Timeline of the Economic Crisis 4-2 • Copyright 2010 © ARC Advisory Group • ARCweb. particularly industries that serve markets with high income elasticity like the automotive industry. Certainly. This severely impacted the global automation market.

a rise in the costs of input goods did not heavily Copyright 2010 © ARC Advisory Group • ARCweb. investors. ethylene. spending in Most of the programs simply enlarge the budget of existing programs and also try to push a structural change towards innovation and R&D-intensive investments. China. In Germany. Future spending in automation equipment depends not only on the ability of companies to get loans to invest in new capital equipment. skyrocketing prices of natural resources concerned economists. while others are in the planning stage. A challenge will be that many industrial PC suppliers have only minimally developed sales and service channels for these markets. Other countries have their own stimulus packages. While the prices of natural resources rose sharply (see Figure 4-3). two stimulus packages aim to boost private consumption and raise government infrastructure. infrastructure sectors such as power and water should benefit greatly. this alone does not necessarily trigger expenditures in automation equipment. Half are already under construction. for example.Industrial PCs Worldwide Outlook • Market Analysis & Forecast While bank loans for capital investments have to be available at reasonable interest rates. but also on their willingness to borrow money. will speed the development of 40 petrochemical projects in that country from 2009 to 2011. In the US. other chemicals. the petrochemical sector should see industrial added value growth of 15 percent from 2009 to 2011. As such. Economic Stimulus Packages Around the World Economic stimulus packages will have a clear impact on automation markets. According to the plan. Figure 4-2 German Stimulus Packages Impact of Natural Resource Prices From 2006 until the start of the financial crisis. in addition to markets for advanced building automation solutions and alternate energy sources. and automation suppliers alike. Industries include oil refining. the prices for industrial PCs and other automation equipment have remained relatively stable and even declined due to ongoing commoditization. and fertilizer. some that more directly aim at industrial markets.com • For Internal Use Only • 4-3 .

the European Central Bank. The central banks (such as the US Federal Reserve. In the long run. and pharmaceutical industries.Industrial PCs Worldwide Outlook • Market Analysis & Forecast influence selling prices. Individual commercial banks then incorporate economic risks when analyzing the rates they charge to manufacturers. petrochemical. the less cash flow is needed to service the loan. this trend will further erode margins if companies resort to securing market share through dumping strategies. The price development will have a sustainable effect since. prices will rise again (see Figure 4-3). and the Bank of England) establish the target interest rates. Commodity prices are crucial for food & beverage. unlike during the oil crises of 1973 and 1980. This resource-effective production aligns well with the current emphasis on sustainable manufacturing . Regarding production costs. 4-4 • Copyright 2010 © ARC Advisory Group • ARCweb. As such. However. Rising steel prices diFigure 4-3 Commodity Prices (Copper and Crude Oil) Source: Fed and HWWA rectly impact production costs. One element of sustainability is conservation of energy consumption and raw materials throughout the production process and the supply chain in order to gain a persistent competitive advantage. real long-term interest rates directly influence the total cost of ownership for automation equipment.a topic of concern among executives at an increasing number of companies around the world. The lower interest rates. chemical. Capital Investment and its Dependency on the Business Cycle Manufacturers typically borrow money from banks to invest in automation capital equipment. but rather by rising demand. thus these interest rates are above the central banks’ target rates. the commodity price shock was not induced by a supply shortage. To get a better grip on the production process and to better control the materials consumed – plant operators increasingly visualize and further connect their production process. since these sectors often require stainless steel housings.com • For Internal Use Only . the industrial PC market also benefits from decreasing prices for semiconductor intermediate products.

Even though high-end automation equipment that allows flexible production partly decouples investment and production. These represent growth markets for IPC suppliers.Industrial PCs Worldwide Outlook • Market Analysis & Forecast Figure 4-4 Development of Interest Rates Industry Trends Every industry has its own changing visualization requirements and investment dynamics. Here. In other industries and applications. Unlike more traditional industrial automation technology. which often involves a steep learning curve for users. Industrial PCs are already well-accepted and widely used in many industries and applications. the markets are relatively mature. consumer demand fundamentally drives both investment and production and thus the two are still connected.com • For Internal Use Only • 4-5 . Figure 4-3 Volatility of Investments and Production Copyright 2010 © ARC Advisory Group • ARCweb. IPCs are just beginning to gain traction as their hardware and software capabilities have expanded to be able to solve new problems and fit into new market niches. IPCs tend to be more familiar and easy to learn.

customer failure to exercise options on orders. 4-6 • Copyright 2010 © ARC Advisory Group • ARCweb. additional global factors play a role:   Equipment and plant lifecycles: The longer the lifecycle of a machine. since service and maintenance depend on installed base. the smoother the annual investment over time Product lifecycles: Shortening of product lifecycles began in the 1980s in automotive and pharmaceutical industries.Industrial PCs Worldwide Outlook • Market Analysis & Forecast In addition to consumer demand. Intensity of service maintenance: The greater the investment in service and maintenance. a possible carbon tax and higher flight prices could diminish the demand for both airplanes and. Germany: 9 percent) highlight China’s potential to stabilize the market. Shorter lifecycles lead to a higher volatility in investments. Regulatory framework: Regulatory changes increase investment volatility and tend to decrease overall investment. capital spending in aerospace is stable since military and commercial contracts are planned years in advance.   Length of contracts and planning: The longer the contracts and the planning. Aerospace & Defense The aerospace industry has grown at about twice the rate of world GDP for the last 30 years. Many airlines are still in bankruptcy and simply cannot get loans for large orders. This increases demand for visualization in both the factory and the office. Aerospace manufacturers employ advanced automation software and hardware to maximize planning accuracy and minimize waste. China: 11 percent. the more stable the associated automation equipment spending. Kanban. flexible production de-couples production from investments. but also drive more flexible production   Production flexibility: A trend since the 1980s (just-in-time.). Here. and fewer new orders in 2009. Automotive The regional revenue percentages of automotive manufacturers worldwide (Japan: 17 percent. but the industry faces order cancellations. In the long run. but the market nevertheless is volatile and depends heavily on the business cycle. Currently.com • For Internal Use Only . demand for IPCs in this industry. ultimately. the smoother the production and capacity utilization. etc. US: 17 percent. visualization and open communication are key success factors for industrial PCs and PC technology in general.

since it provides the chip sets and displays used in IPCs.com • For Internal Use Only • 4-7 . which offer consumer markets and low wages. telecommunications. The remaining customers search for solutions from system integrators and machine builders. The semiconductor industry follows three markets: consumer electronics. In North America. all this capacity buildup intended to win market share brings the risk of creating over-capacity (as recently experienced in the Chinese electronics industry). motion control. However. profits for Detroit’s Big Three automakers were almost entirely attributable to the companies’ auto financing departments. Examples include single-source supply for automation products or existing combinations of mechatronics and automation equipment. The automotive industry is moving towards emerging economies. and Hungary. IPCs were never successful in penetrating US car manufacturing and are predominantly used by automakers in Europe and Asia. resulting in difficult wage agreement renegotiations with labor unions. and personal computers. which in turn.Industrial PCs Worldwide Outlook • Market Analysis & Forecast The current crisis overshadows many recent developments in the automotive industry. In the past. Recent- Copyright 2010 © ARC Advisory Group • ARCweb. Toyota. Semiconductor The semiconductor industry has strongly adopted PC technology. the North American car industry still has a long way to go if it is to survive in the long term. General Motors. demand solutions from automation suppliers. while Japanese and Korean automakers continue to outperform the Big Three in their domestic markets. and rapid technology development characterize the highly cyclical semiconductor industry. Ongoing competition and cost pressures caused the tier 1 supplier market to consolidate considerably. and networking. and Ford have increased output in China. This industry is of interest to industrial PC producers as both a customer and a supplier. two of Detroit’s Big Three automakers filed for ban kruptcy in 2009. Short product lifecycles. Slovakia. fast changing demand and price fluctuations. forcing industrial PC suppliers to deal with a shrinking number of customers. While both emerged from Chapter 11 by midyear. BMW. using the PC as a platform to integrate third-party I/O. The European automobile industry continues to suffer from over-capacity and high costs. European carmakers continue to invest in Central and Eastern Europe by developing ―clusters‖ of suppliers in the Czech Republic. US automotive manufacturers have struggled since 2006.

Industrial PCs Worldwide Outlook • Market Analysis & Forecast

ly, tremendous growth in flat panel display production reduced component prices for IPC producers. However, IPC suppliers consume relatively few chips compared to consumer electronics and large movements in the consumer electronic market could ultimately lead to chip shortages. IPC suppliers should watch the consumer electronics market carefully, both to be early adopters of technological trends from consumer electronics and to avoid shortages.
Machinery

The market for industrial machinery suffered greatly from the current economic crisis. In Germany, 30 percent of machine tools are sold to carmakers and their suppliers. For the machinery sector, the situation since October 2008 has steadily worsened. VDMA, an association of German machine builders, reported a steady and rapid decline in new orders compared to the month of the previous year. From December 2008 to August 2009, the VDMA reported a decline of roughly 40 percent each month, but the end of the downward trend appears to have been reached in the third quarter of 2009. The German Machine Tool Association, VDW, reported an even larger, 67 percent decline in orders for the first half of 2009, with capacity utilization sinking to 66 percent in the same period of time. Italy recently reported a 49 percent drop in new machinery orders in Q4 2008 compared to the previous year and the downward trend continued after this collapse. Switzerland experienced a drop of 41.8 percent in incoming orders in the machinery sector in the first quarter of 2009, while revenues declined only 15.1 percent, due to a lack of time. Industry associations in the UK estimated negative growth for 2008 (down 5 percent) and continue to forecast negative growth (down 15 and 10 percent respectively for 2009 and 2010). Compared to those European numbers, the Indian machinery market for NC controlled machines is a bright spot; in the middle of 2009, the market contracted by ―only‖ 25 percent. In Japan, machine tool orders in April 2009 dropped by 80.4 percent from a year ago, but Japanese machine builders hope to benefit from Chinese demand. This strong downturn led to consolidation, especially in the machine tool markets in North America and Europe. The OEM machine tool market in these regions continues to be under increasing pressure to reduce the overall development costs for machinery. This forced some machine builders to move production and development resources to Eastern Europe or Asia. Beside reducing their own costs, machine builders in North America and

4-8 • Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only

Industrial PCs Worldwide Outlook • Market Analysis & Forecast

Europe can improve their competitive positions through continuing innovation. On the other side of the world, the Asian market continues to flourish as local machine builders gain sophistication and demand from China and India continues to increase. The operator skill level in Asia, however, poses a challenge, requiring ongoing training and localized human-machine interfaces. In the machinery sector, the most important thing for IPC suppliers is the concept of embedded functionality. Companies like B&R and Beckhoff have had large success in this area. Rather than promoting PC technology per se, the two companies leverage low-cost COTS technology, configure it, and bury it into applications. PC technology is also well accepted is in the machine tool market. CNC controls virtually all use some sort of PC platform, often with a proprietary, UNIX-based operating system to lower the OS footprint. In discrete manufacturing, rubber and plastic products manufacturers often use IPCs, especially in injection molding systems. As PLCs evolve into multifunction PACs, they adopt IPC-like capabilities. However, currently, IPCs and PACs remain largely complementary technologies. SoftServo has made strong inroads in the Japanese and Asian market in machine tool and metal forming applications. In the robotics market, Kuka has leveraged true PC-based control for over a decade. Schneider Automation Packaging Systems (Elau) has always used a PCbased system (using the VRTX real-time OS) in its Packaging Automation Controller, although this is not necessarily a point of differentiation.
Metal Working

Metal working and forming uses primarily low-cost automation solutions with relatively low performance requirements. The market for metal cutting machine tools is mature with a large concentration of the machine builders located in Japan, Germany, Switzerland, and Italy. Asian markets in China, Korea, and Taiwan create opportunities for new entrants in machine controls. The markets are primarily price-driven, particularly in Korea, where the catalog machine market pushes down the overall market price point. IPCs are less popular here than in other markets, since their key characteristics are not required. This could change in the future if and when energy consumption must be measured, tracked, and stored.

Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only • 4-9

Industrial PCs Worldwide Outlook • Market Analysis & Forecast

Food & Beverage and Consumer Packaged Goods (CPG)

In the hybrid industries, flexibility, openness, and the need to handle large amounts of data for traceability and automation are all requirements. This represents a more classical area for IPCs. This is particularly true in smaller companies that might not have full-scale automation systems in place but have to handle large amount of data to meet the traceability demands. The demand for automation products in the food & beverage industry is growing at a stable rate. The economic concept of ―income elasticity‖ explains this. Consumers typically have low income elasticity for food, which means that demand for processed food products hardly changes – regardless whether incomes rise or decline. As a result, in difficult economic times when real incomes fall, demand for basic necessities remains constant. This behavior is also typical for the consumption of pharmaceuticals. Demographic changes in emerging economies help explain the steady growth. In Europe, packaged food is often cheaper than fresh ―market‖ food — a counter-cyclical effect. The food & beverage and CPG industries are leaders in adopting highperformance solutions. While the major industrial automation suppliers dominate the market, the large players are now losing some opportunities to specialized suppliers as performance demands increase. In recent years, food & beverage producers invested heavily in their IT infrastructures, and many now have reliable systems in place. These investments support the automated information flow necessary to meet the increasing regulatory requirements as well as the sophisticated product information tracking necessary to remain competitive. Concerns over food safety have increased dramatically in recent years, driving ―power‖ retailers to invest in supply chain visibility to increase safety and efficiency. This further drives the market for IPCs. Environmental consciousness in the food & beverage industry increased rapidly in recent years. One result is that producers now invest in energy management, emissions monitoring, and carbon footprint-reducing initiatives to influence consumer buying behavior. This has a direct effect on investments in packaging equipment, energy management solutions, and variable speed drives.
Pharmaceutical

Changing consumption habits in packaged goods and food and beverages trigger business opportunities in another field: pharmaceuticals. In China,

4-10 • Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only

Industrial PCs Worldwide Outlook • Market Analysis & Forecast

consumption of consumer packaged goods and food increased by approximately 50 percent from 1998 to 2005. Chinese consumers now turn to packaged goods that offer convenience and suggest a Western lifestyle. This change does not portend well for the health of the nation, but offers a huge market for pharmaceuticals: more than 20 million Chinese have diabetes, more than 160 million have high cholesterol levels, and as many have high blood pressure. In Chinese cities, around 30 percent of the population is overweight. Automation suppliers should recognize that India and China are not only growing markets for end products, but also for their important role on the supply side. The requirements in this market are similar to those in the food & beverage industry. In contrast, however, the pharmaceutical industry has higher fixed costs for R&D and, unlike food & beverage, is dominated by large players.
Chemical

During the current economic crisis, the full extent of the chemical industry’s dependence on the automobile industry became apparent. In October 2008, demand for chemical- and petrochemical-based goods plummeted as a direct result of the crisis in the automobile industry. Basic chemical production (inorganic basic chemicals, petrochemicals, and polymers) were hit hardest, while fine and specialty chemicals faired only slightly better. In the chemical industry, industrial PCs often have to withstand harsh corrosive environments, and not all suppliers offer products that meet these rigorous requirements. In hazardous (explosive) plant areas, IPCs from a small number of specialists, including Stahl HMI and Pepperl+Fuchs are widely used. ARC also sees opportunities for IPC suppliers in mobile IPCs, whether in the form of laptops (like the Pansonic Roughbook) or mobile panel PCs, both which could be used in asset management and similar applications.
Electricity Production and Other Utilities

The electric power industry continues to experience growth due to longterm project commitments based on increased demand for more power in all parts of the world. Power generation & transmission, water & wastewater, and other infrastructure industries will benefit from stimulus packages enacted in the US, China, and other countries around the world.

Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only • 4-11

Industrial PCs Worldwide Outlook • Market Analysis & Forecast

In the electric power sector, industrial PCs play an important role, especially high-performance rack-mount PCs that control applications like the grid. Regional or nationwide grids use IPCs to help stabilize the system.
Oil & Gas and Petrochemicals

The oil & gas industry did not slow down much in 2008, with oil-related companies taking in a tremendous amount of cash, especially during the high oil price period in mid-2008. Here, the backlogs of EPCs and automation suppliers (which can be up to 18 months) helps stabilize demand. Upstream oil & gas will provide opportunities for automation suppliers in the near future. Capital spending plans for oil & gas companies remain strong since service activities drive the overall market. In these industries, IPCs are used as panel PCs and as a DCS. However, in many critical applications end users prefer not to use PC technology to avoid potential security problems. Since PC capabilities are needed in the process industries, a failsafe IPC would have high potential in this industry. As in the chemical industry, wireless applications and the ability to work in harsh environments are crucial requirements.
Pulp & Paper

Pulp & paper is a low-margin industry with relatively little innovation and a low rate of capital spending. In recent years, the traditionally strong Nordic countries and Canada saw job cuts and mill closures, while new production centers emerged in China and Brazil. Since pulp and paper products are an essential part of everyday life, in general, the paper and paperboard industry is largely linked to an economy’s GDP. In the energy- and water-intensive pulp & paper manufacturing industry, it is crucial to control and monitor each part of the process to optimize energy and water consumption. While the control of emissions and water usage increased during the last 20 years, visualization requirements have also increased, providing some additional opportunities for IPC suppliers.
Building Automation

The building automation market is becoming more and more attractive to automation suppliers as automation components move into the territory of classical building controls. Products include industrial PCs, drives, sensors, intelligent pumps, and operator panels.

4-12 • Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only

1% 4. concentration on Asia.8% Electronics & Semiconductors Machinery Chemical and Petrochemical Food & Beverage Pharmaceutical & Cosmetics Pulp & Paper Mining & Metals 4. vibration-free environment lowers the technological requirements – and thereby the price of the needed IPCs. often use IPCs in manufacturing Consolidation.1% 3.3% Key Trends Automotive Consolidation of manufacturers – rising demand of solutions Visualizations needs remain strong Falling prices. change in structure Strong dependency on automotive. Panel PCs in ex-areas IPCs do fit the needs and demand is strong IPCs ideal for many applications Market shifting towards Latin America and Asia Hardly IPCs in this industry Ongoing demand to include light SCADA functionality I panels Demand for PACs and IPC rise as tracing requirements increase Aerospace & Defense 3.5% Water & Wastewater 1.2% 8. Average Growth in Volume (1970 to 2007) Copyright 2010 © ARC Advisory Group • ARCweb. Furthermore.4% 0. industrial PCs and operator panels compete directly. especially since the less demanding.5% 4. Industry % of Panel Market CapEx Growth 2.6% Consumer Packaged Goods Other 5.Industrial PCs Worldwide Outlook • Market Analysis & Forecast In this market.0% 1. customers are familiar and comfortable with the PC architecture.com • For Internal Use Only • 4-13 .2% 8.2% Figure 4-3 Industry Growth and Market Shares Source for CapEx: OECD.

2 percent in 2009. Average growth was estimated at 0. vulnerabilities remain given Canada’s financial and economic ties with the US. In addition. as the drag from net exports wears off. Domestic demand growth—initially boosted by commodity-price gains—continued but softened to more modest levels. futures remain uncertain. However. and to a lesser degree. The collapse of the domestic automobile industry caused profound uncertainty in American industries even though the chapter 11 restructuring of bankrupt automakers went remarkably fast (Chrysler in 42 days and General Motors in 40 days). Another issue is the relative short lifecycle of Microsoft OS components (approximately five years) versus the 20+ years for PLCs. as slower growth in the US and the effects of past real currency appreciation sharply slowed net exports.7 percent in 2008 and 1.3 percent in 2008—largely reflecting the negative outturn in the first half of the year—and recover to 1. North America – Limited Acceptance of IPCs. industrial PCs have had limited acceptance due to perceived complexity and hesitation based on questions relative to ruggedness.Industrial PCs Worldwide Outlook • Market Analysis & Forecast Regional Economic and IPC Trends Every world region has its own peculiar business cycle and dynamics. The knock-on effects of an auto industry shakeup are widespread and profound. which do not have a Microsoft OS front end. The downturn impacted nearly every sector in the US. capital investment in manufacturing remains low. Ford’s. Four-quarter growth is projected to decelerate to 0. durability. and the housing market has been cooling from the highs reached in 2006 –07. bringing it back to the level of Spring 2007. and unemployment rose to 9. Economic activity in Canada suffered a setback. Limited Economic Growth In North America. Overall. and reliability versus PLCs.com • For Internal Use Only . Chrysler’s. 4-14 • Copyright 2010 © ARC Advisory Group • ARCweb. capacity utilization has dipped below 70 percent. The recent decline in commodity prices weakened the Canadian dollar.7 percent in 2009. The following section looks at the overall investment climate within each region and discusses the impact on the demand for industrial PCs. The US entered the recession first: will the US be the first country to exit? So far.8 percent in September 2009. the situation of the many companies that supply the auto industry is unclear.

Examples are in the motion control world. but profitability in these regions remains a challenge. Singapore.Industrial PCs Worldwide Outlook • Market Analysis & Forecast Asia: Diverse Economies. Certainly. and Power Automation have concentrated on Asian markets and developed servo drives based on cost reduction where they leverage the PC platform. like Omron and Siemens. still dominate Asian markets. ACS Motion. the installed capacity has increased considerably. and just under 5 percent in 2009. tighter external fi- The installed base of CNC machinery in China and India is insignificantly small compared to other developed regions. The key financial risks for Asia stem from volatile capital flows. Hong Kong. have been established in emerging Asia for quite some time. Copyright 2010 © ARC Advisory Group • ARCweb. Bottom line: the Asian industrial PC market is all about price. This leads to different buying habits compared to developed economies where long-term partnerships are formed to secure supply. Western suppliers for automation products. including IPCs. typical buying habits in other regions are not transferred to this region. Average annual GDP growth in Asia is projected to slow from 7. Forecasts from the third quarter of 2009 suggest growth in Asia slowing sharply along with the global economy.com • For Internal Use Only • 4-15 . less solution-based. Japan. As such. For automation suppliers.6 percent in 2007 to about 6 percent in 2008. Advantech is the largest domestic supplier in the region. They have both invested in product lines specifically for emerging markets. which in turn demand high-quality production equipment. While the installed base of machinery and the degree of automation in Asia have grown during the last years. Demand for automation equipment is still at the low end of the segment (simpler. Many IPC suppliers seek closeness to their customers. Price competition opens opportunities for alternative automation brands. where Bosch (Nyquist). This helps explain why many machine OEMs have relocated their business to Asian consumer markets. With increased concentration of OEMs and customers in emerging Asian economies. Same Outlook? Until recently. solutions providers follow. many (non-Japanese) Asian companies relied on automation equipment from Western suppliers because export-driven business demands high quality standards. Large automation suppliers. automation technology) and price is often the most important buying criterion. Therefore. Korea. and Taiwan are likely to record negative economic growth in 2009. it’s important to be close to customers to better understand the changing requirements of tier one OEMs.

4 trillion. on the other hand.Industrial PCs Worldwide Outlook • Market Analysis & Forecast nancing. and lack of liquidity between financial institutions will drag China’s growth figures. exports will likely fall sharply while the property sector weakens. China has a good business environment for manufacturing. Many machine builders and automation suppliers are establishing subsidiaries in this region -. making the country an important market for automation suppliers. Many sales that would have originated in regions such as North America.com • For Internal Use Only .5 percent for years. Europe. and disruptive spillovers to domestic markets that could lead to a sharp credit squeeze and slower growth. growth is slowing below potential because of tighter credit conditions and the easing in commodity prices. China: Communists Saving Capitalism? PC technology offers comparably low hardware prices. Some machine builders. Growth forecasts for China have been revised downward recently. Taiwan. Korea. with an estimated two million jobs on the line. China. global uncertainty. IPC suppliers usually leverage the modularity of their products to offer customization. but requires integration. have reserva- 4-16 • Copyright 2010 © ARC Advisory Group • ARCweb. In Australia. including the large fiscal stimulus package. or Europe now take place directly in China. a general bleak outlook. growth is expected to begin to recover in response to an easing in monetary and fiscal policies but to remain below trend as the reduced availability of credit constrains spending. While many non-PC-based automation equipment product lines are tailored to fit Chinese requirements. and China are more likely to adopt this type around 9. India. In New Zealand. it differs from the classical PLC architecture and For these reasons.not simple distribution centers. In 2009. but rather full-fledged assembly and manufacturing operations capable of producing machines and automation equipment for the local market. Eastern therefore needs different training for those who apply IPCs in manufacturing or integrate IPCs into their machines. of platform. a labor force of nearly 800 million workers and even more consumers. and lucrative consumer markets. In addition. Japan. Many Chinese companies quickly adopt Western technology and seek to achieve Western productivity benchmarks. Much will depend on the effectiveness of the policy response. has enjoyed GDP growth rates of Despite aggressive measures. with an overall GDP of $ 3.

and older companies fail and disappear (destruction)]. This leads to slow recovery phases and costly recessions. resulting in robust growth. is likely to keep interest rates near zero and may have to expand its policy of quantitative easing if the recession continues. ARC believes that China will not only demand more automation equipment as wages rise. Japan: Recession . companies are holding back expenditures. Japan’s GDP dropped by almost half a percent in 2008. GDP will shrink by almost 7 percent in 2009. Now. Pioneer Electronics. The recovery in 2010 will be modest. Unlike in earlier cycles. India: Strong Like a Hungry Elephant During the last decade.3 percent fall in its second quarter of 2008.Not Again! As occurred during the downturn of 2001. India depends on the inflow of foreign capital to finance this development. domestic consumption has been a driver of GDP growth since 2005 and many Japanese companies have improved their balance sheets since 2003. in downtimes. the government often bails out poorly performing companies. the Indian economy became much more integrated into the world economy.1 percent drop in GDP in its third quarter. everyone benefits from the good market development and. The world’s second -largest economy reported a 0. [Creative destruction is the process under which new innovative companies rise and prosper (creative). The Bank of Japan. Experts expect Copyright 2010 © ARC Advisory Group • ARCweb. after a 0. the country’s central bank. but will also shift towards more sophisticated systems with greater capabilities for achieving international quality standards. Still.Industrial PCs Worldwide Outlook • Market Analysis & Forecast tions about establishing a business in China due to concern about loss of intellectual property. a plan approved in May allocated $21 billion to prop up troubled companies.com • For Internal Use Only • 4-17 . due to a collapse of investment worldwide . Japan’s economy has been hit hard by the current economic downturn and may contract as much as in the periods of 1996 to 1998 or 2000 and 2001. in spite of deflationary and low interest rates. Elipda (a chipmaker).Japan is one of the largest machine tool markets. One reason why Japan suffers harder from recession than other countries is the so-called convoy system that led to a sclerotic market in many areas and has annulled creative destruction for decades. In growth periods. For example. and Japan Airlines were among the first applicants. with GDP growth forecast to average 1 percent.

com • For Internal Use Only . Asia’s Tiger States: Taiwan. Hong Kong. Machine builders tell ARC that they are more comfortable conducting business in India than in China. these emerging markets are increasingly interesting.Industrial PCs Worldwide Outlook • Market Analysis & Forecast growth in India to decline to about 6 percent in 2009. specialized suppliers for industrial PCs. This will make India one of the main growth markets for mobile panels in the next five to ten years. In addition. but also because they themselves host a number of small. While the Koreans strengthened their automotive production capacity. South Korea For IPC suppliers. Fanuc and Mitsubishi. many companies selectively look at areas where they can replace manpower with robots. Singapore. Western competitors should not ignore the Taiwanese and Korean machine builders. with the exception that they largely depend upon the Japanese CNC providers. While establishing new price points for milling and grinding applications in the low-end machine tool business. rising transportation costs due to commodity prices and the uncertainty of currency effects force companies to produce close to large consumer markets like India. Target. where the monsoon has significant impact on GDP (roughly 30 percent is produced in agricultural sector). they also strengthened the machine tool infrastructure to support this industry. With an eye toward improving productivity. to equip their machines. JC Penny. particularly investment. these machines also brought credibility to this new class of producers. Many manufacturers in the visualization-intensive food & beverage and fast-paced consumer goods sectors produce locally. Walmart. due to the increased protection of intellectual property. Still. making this market especially attractive for HMI software and IPCs. and Carrefour are examples. it’s important to remember that India is an emerging country. For automation suppliers and machine builders India is becoming an increasingly interesting destination thanks to the country’ low wage s and good access to engineering skills. These countries mirror Japan’s market entry strategy over 20 years ago. 4-18 • Copyright 2010 © ARC Advisory Group • ARCweb. as tighter financial conditions weigh on domestic activity. not only because they offer growth possibilities. Koreans and Taiwanese machine builders were primarily responsible for the large influx of low-price catalog machine tools that severely depressed prices in 2000.

(Intel earns roughly one-fourth of its revenue in Taiwan. production in these countries enables end users to respond quickly to sales orders coming out of Asia. They account for 16 percent of the worldwide market and host a number of different companies.Industrial PCs Worldwide Outlook • Market Analysis & Forecast Both Korea and Taiwan are experiencing high growth because of their relative position to China and their own burgeoning automotive industries. Even Europe hosts many small. Taiwanese Copmanies Taiwan Number of % Companies 14 Number of % Companies Specialized in IPCs Specialized in Silicon Products PC based Automation Supplier Focused Automation Company Full line automation Supplier Total Taiwanese Market 14 Number of % Companies Component Supplier Product supplier System provider Solution Provider Total Taiwanese Market 14 100% 5 9 36% 64% / / $ 310 100% Figure 4-3: The Taiwanese IPC Market Million of USD 23% $ 310 Million of USD 50% 43% 7% / / 100% $ 240 $ 58 $ 12 % 16% % 77% 19% 4% 7 6 1 $ 310 100% Million of USD $ 37 $ 273 % 12% 88% Copyright 2010 © ARC Advisory Group • ARCweb. Many low-end and midrange machine tool builders outsourced production to these countries and enjoy a skilled. low-wage workforce. to established automation suppliers like Advantech.com • For Internal Use Only • 4-19 . The Taiwanese market is the most vibrant PC market worldwide. Furthermore. the Taiwanese market is the fastest growing. machine OEMs benefit from relatively good intellectual property protection. In addition. specialized PC players that offer solutions.) The table below analyzes the Taiwanese companies of the study sample. These range from component-driven companies that are moving up the supply chain. Chapter 3 includes a more detailed competitive analysis.

Austria. and. Around 50 percent of the revenue of Taiwanese companies comes from China (not counting exports of IPCs in machines). France. Source: Eurostat consumption and stabilize the economy. was less severe than in the United States. Spain. 4) not every country’s banks were heavily invested in subprime markets. the European OEM market is moving toward an out- 4-20 • Copyright 2010 © ARC Advisory Group • ARCweb. This long crisis affects the automation/machine building clusters since they focus on the discrete industries. 3) European states have well-developed social systems that sponsor private Figure 4-7: Economic Development in Western Europe (EU-15). 5) financing of companies is more independent of capital markets. Western Europe: Epicenter of Machine Builders & Automation Suppliers For automation suppliers. and more young people are trained on PCs than PLCs.Industrial PCs Worldwide Outlook • Market Analysis & Forecast Taiwanese suppliers have the benefits that industrial PCs are well-accepted in emerging Asia. such as custom servo drives in an embedded automation solution. there is less of a PLC legacy. Germany. In addition. However. These five factors are the most relevant for automation markets. Denmark. Western Europe hosts not only many automation suppliers but also a large amount of machine builders and system integrators. Switzerland. the most important sub-regions in EMEA are Eastern and Western Europe. Various factors cushion the current downturn: 1) the European Union is a diversified region and many influences balance out each other.com • For Internal Use Only . and Italy are the centers of automation and machine building. With the adjustment in the financial system likely to be arduous and protracted. Machine builders continue to design some element of the automation for their machinery. 2) the housing crisis in France. experts don’t expect a modest recovery until later in 2009. they could easily deliver to the booming emerging markets nearby.

Both Northern Italy.com • For Internal Use Only • 4-21 . attracted by low corporate taxes. and the World Bank. Estonia. Even though many companies are financially well positioned. industrial PCs are well-accepted in emerging Europe. driving production processes to become more automated and sophisticated. A combination of dependency on FDI. Some countries even appreciated a slowdown to ease overheating pressures. automation markets are growing faster than machinery markets. Hungary and Slovakia suffered from a lack of skilled labor. they look for integrated automation solutions. a heavily exposed banking system. ARC predicts that between 15 and 25 percent of the German machine builders will face financial problems and eventually file for bankruptcy. Instead. These include Slovakia. This is because many machine OEMs can no longer afford to retain an engineering staff. Slovenia. and Hungary) are experiencing not a slowdown. but rather a free fall. in fact. The German machine builders suffered heavily from the crisis and many companies reacted by applying Kurzarbeit (short work weeks subsidized with government funding) to reduce operating costs. Czech Republic. In general. where PC technology is traditionally strongly used in the packaging industry. many countries (Latvia. and large government debt resulted in financing problems that forced a bail out by the IMF. low wages. The current crisis will foster this development. All Eastern European countries will have a large demand for IPCs in utility and infrastructure in the coming years. In contrast to the struggling countries mentioned above. However.Industrial PCs Worldwide Outlook • Market Analysis & Forecast sourcing model in which increasingly more automation components and sub-systems are purchased from automation suppliers. Following a prolonged expansion starting in the mid nineties. Copyright 2010 © ARC Advisory Group • ARCweb. not ―one‖ Eastern Europe region. Eastern Europe and Russia: The Wild East Like in the emerging Asian markets. One reason for this development was the inflow of foreign direct investment (FDI). and a stable investment climate. where there are fewer legacy systems in use. and France are also important markets for IPC suppliers. Belarus. Lithuania. some economies have developed well. domestic demand and exports to Western Europe have started to moderate. During the crisis it became evident that there is. Until the crisis began. the European Union. and Poland.

Eastern Europe will drive growth of low-end CNC applications into Europe as the region continues to modernize. The symptoms are large trade volumes.5 billion IMF loan to stabilize the economy. a strong dependency on exchange rates. The modernization is driven by Western Europe outsourcing a tremendous amount of production across their neighbor’s borders. Some machine tool builders actually predict growth rates as high as 25 percent in this region. In general. custody transfer systems. valves. rising wages. such as Leoni. Both economies boomed after 2001. The Czech Republic was less affected by the financial crisis since it hosts conservative banks. but at a low rate. but Russian companies are already due to repay US$ 117 billion to foreign creditors. 4-22 • Copyright 2010 © ARC Advisory Group • ARCweb. Russia’s process industries are important for au tomation suppliers.com • For Internal Use Only . had to apply for a US$ 20. The recovery is expected to happen in 2010. but makes foreign debt more expensive. and increased productivity. which is likely to continue its downward trend. In this case. and tightening of investments in unproductive sectors. to move its wiring harness production to Belarus. Rising wages have already forced companies. ultimately. The state already provides general help to avoid a repetition of the 2008 bail out. but also led to increasing automation of production. and. resulting in low unemployment. in contrast. Poland. inflationary pressure. Oil is often produced in Siberia and the long pipelines needed to convey the oil to Western markets require pumps. but has faced an appreciation of the Czech Crown. This supports exports. Europe is looking for alternative energy sources and large projects are likely to emerge in the future. a neighboring country with even lower wages for labor-intensive production.Industrial PCs Worldwide Outlook • Market Analysis & Forecast Poland and the Czech Republic have also attracted huge FDI inflows since 1995. Forecasts indicate that Russia’s economy will contract strongly in 2009 due to lower commodity prices combined with increasing problems accessing global capital markets. the central bank managed a gradual depreciation of the ruble. Ex-emigrants returning from abroad partially cushioned the labor shortage. SCADA systems. During the peak of the crisis. it also results in political tension. Russia has the ―Dutch Disease‖ – it is heavily dependent on the export of commodities. These can include pipelines from the Caspian Sea or solar thermal generated electricity from the North African desert.

It is also questionable if Latin American states will react to the crisis with protectionism (e.g. which created large risk for the entire region. The largest share of these inflows is directed toward the oil sector in oilexporting countries. close to the average for emerging market countries. strong domestic demand. Argentina) or liberalism (e. and lower commodity prices.. Africa is nearly irrelevant for automation suppliers. High commodity prices. Growth is expected to slow markedly as the global slowdown and tightening financial conditions take hold. The steady rise in oil prices since 2003 contributed to booming gross FDI inflows to the region.g. the ongoing global turmoil represents a confluence of negative shocks: the freeze in global credit markets.g. Outside of South Africa. However. weaker external demand. While oil states seek new business opportunities. Some states (e.. This reflects the progress many countries in the region have made in improving their macroeconomic fundamentals over the past decade. so did food prices. These shocks can have strong negative impact on financing conditions. Brazil). Latin America Global financial turmoil increasingly clouds the Latin American regional outlook.com • For Internal Use Only • 4-23 .Industrial PCs Worldwide Outlook • Market Analysis & Forecast Middle East and Africa: Oil and the Forgotten Continent The Middle East has continued to experience strong growth in 2008.. and credibility of policy frameworks support this growth. But the region is not yet at that point and recent scenarios point to growth of around 3 percent next year. The region is expected to deal with the current global shocks better than in previous crises. outpacing global growth for the ninth year in a row. For Latin America. they invest in tourism and the related infrastructure. Downside risks to growth have also increased. but the economic situation worsened since oil prices declined. given the uncertain outlook for world commodity prices and the possibility of further spillovers from the strains to global financial stability. Another interesting sector is building automation. from US$ 18 billion in 2002 to US$ 94 billion in 2008. possibilities exist in the Maghreb region of Africa if the countries can provide stability and manage to stabilize inflation and exchange rates. Copyright 2010 © ARC Advisory Group • ARCweb. As oil prices rose. A strong financial situation and little exposure to US credit markets has so far left the Middle East untouched by the international credit crisis.

benefit from the increasing competition felt by their cus- Having a broad range of scalability within a single product family Desire for optimal application tor/customized solutions form fac- RFID integration in some production machinery Industry Trends Impacting Automation Equipment Demand 4-24 • Copyright 2010 © ARC Advisory Group • ARCweb. multi-vendor solutions and enables greater flexibility. In contrast. Trends in the Automation Market Industrial automation demand is primarily driven by business issues and so is the market for IPCs. Merge of Layers and Functions The classical automation topology has merged into a flatter.g. Ever-Increasing Global Competition Global competition in the automation market will continue to increase.. This will have negative influence on the prices of industrial PCs and also on the prices of the intermediate goods like displays. where one device incorporates functionality like logic. cutting into sales of classical PLCs. and visualization. That means that every IPC solution has to prove its advantages compared to embedded control solutions. Automation markets. the intentionally closed (PLClike) nature of PACs tend to limit their use to single-vendor automation solutions. more integrated architecture.com • For Internal Use Only . better performance Compliance to worldwide electrical and safety regulations Local service and support all over the world Reducing maintenance and spare parts costs Networking technologies. whereas other states close to the US (e. and pressure for suppliers to achieve operational excellence. one stop shopping that aim to reduce Total Cost of Ownership (TCO) Support during all lifecycle phases Use of standards to promote choices. the need for product differentiation. fieldbus real-time Ethernet communication diversity. facilitate a common environment.Industrial PCs Worldwide Outlook • Market Analysis & Forecast Venezuela) now suffer from a drop in oil prices. or a PLC solution. provide consistency and simplicity. Mexico) could benefit from US companies lowering their costs and shifting production to Mexico. While today’s IPCs and programmable automation controllers (PACs) share many similarities. motion control. and drive down costs Employing standard technologies and bridging the gap between operations and IT Demand for products that are easier to install and use Greater productivity though higher line speeds. Sustainable manufacturing Demand for large data transfers Measuring real time performance of manufacturing operations Increasing capital investments in automation equipment as a result of globalization Broad solutions. The continued merging of automation layers will boost sales of both IPCs and PACs. driving price pressure. the open (PC-like) architecture of IPCs supports more open. in general.

the market will benefit through competition in general. In 1998. it is not likely that the pric es for the end product ―IPC‖ will decline as rapidly as the prices for intermediate products.Industrial PCs Worldwide Outlook • Market Analysis & Forecast tomers. These machine builders and end users also have increasingly complex manufacturing processes. and automotive. as well as other significant cost savings. IPCs and HMI Software – Soft Solutions In addition to these transplants from industrialized nations. and system integrators delivering intermediate products to automotive manufacturers.000 were left.800 remaining by 2015. demand. which minimizes operational and maintenance training requirements for the entire system. Customer Solutions Consolidation and Movements Demand for The current economic situation resulted in consolidation among the companies buying IPCs. As the customer base gets smaller. Customer consolidation has various implications for suppliers. Components-only business provides lower value and consequently brings smaller margins and profitability. local builders are trying to capitalize on the surge in HMI software continues to replace proprietary software embedded in devices such as operator panels. the market power of the surviving customers increases. In this case. For example. which have to automate larger parts of their production to stay competitive. there were just 5. machine builder. Also. thus driving many suppliers to expand towards a solutions business. these customers are on the forefront to move production into regions representing the point of sale.000 OEMs. Many suppliers look to expand their offerings from components-only to a solutions business in markets such as steel processing. in 1988 there were roughly 30.600 suppliers and one forecast predicts 2. This trend eliminates the need for specialists in manuf acturers’ organizations. only 8. Increasingly. as more products are manufactured in more locations. CE-based HMI software Copyright 2010 © ARC Advisory Group • ARCweb. which also creates advantages of component pricing and eliminates import taxes and any exchange rate fluctuations.com • For Internal Use Only • 4-25 . By 2000. This minimizes risks as interoperability and applicability responsibility lies with the systems supplier. manufacturers prefer to have broader solutions packages from suppliers or third-party system integrators. pulp & paper. Even though the market for IPCs will face a downward price trend. Increasingly.

Ethernet’s increasingly compelling value proposition in the areas of technological commonality. the continued use of multiple divergent industrial Ethernet protocols. Ethernet can greatly enhance the data gathering from the plant floor. Device. Windows CE is now the HMI software operating system in roughly a quarter of units sold. and mobile phones. This becomes especially useful if the data is effectively evaluated using applications such as plant asset management (PAM). distributed automation often triggers the large number of different connected systems and is often more easily managed by a PLC/PAC than an IPC. The is due to the ongoing price premium associated with Ethernetcompatible I/O and devices. higher incremental costs. Distributed control needs intensive cross-communication and interaction between systems and their dynamically changing environment. vertical integration.or I/O-level networks can accommodate a broad spectrum of products ranging from low-end sensors to high-end. data-intensive devices such as IPCs. Many of these shortcomings have since been overcome. and overall complexity when used in machine control and other device network applications. The trend towards increased production visualization benefits panel PCs that include control functionality. Networks in Manufacturing Automation Distributed automation is most powerful when combined with a powerful network like industrial Ethernet. In the past. As a result. such as PDAs. Also. Distributed Automation There is a clear trend towards a distributed architecture in future automation topologies. However. and global ubiquity is one of the most significant changes in automation. replaces proprietary solutions. as the trend towards distributed architecture continues. In practice. Ethernet’s penetration at this level is still in its early stages. use of a non bus-based architecture. since automation tasks with high demand for visualization could be implemented cost efficiently with panel PCs. and the inability to cost-effectively extend down to 4-26 • Copyright 2010 © ARC Advisory Group • ARCweb.Industrial PCs Worldwide Outlook • Market Analysis & Forecast deployed on numerous types of wireless devices.com • For Internal Use Only . IPCs will benefit from the increasing success of industrial Ethernet and real-time industrial Ethernet. tablet PCs. the relative benefits of small PLCs with attached I/O decreases in favor of PLCs or IPCs with remote modular I/O. the benefits of physical layer commonality were often overwhelmed by Ethernet’s lack of real-time performance and determinism.

ARC expects industrial Ethernet to rapidly penetrate the markets for vision systems/cameras. integrating business. the largest water. Store. digitized manufacturing operations. I/O manufacturers are already migrating their products to Ethernet. and production. Consequently. manufacturing. These manufacturers deploy information technology that serves their business and operations needs and is based on industry standards. securely managing and standardizing visualization and IT infrastructure across multiple facilities. Remote I/O and motion control products will account for a majority of total nodes shipped. Industrial PCs also enable easy connectivity between the production floor and office environments. and unified and standardized plant IT infrastructure. the food & beverage industry is one of the largest consumers of energy and water.com • For Internal Use Only • 4-27 . Manufacturers increase their operational agility by accessing and visualizing real-time information and applying it to speed up and improve operations. and one of the largest producers of environmental waste product. automatic identification/RFID. One example is the movement towards sustainable manufacturing to drive new growth and margin while responding to new retailer. regulatory. Ongoing Demand for More Information – Handle. visualization and control of production equipment. and similarly data-intensive products.Industrial PCs Worldwide Outlook • Market Analysis & Forecast the highest-volume items at the device level: low-cost sensors and actuators. and one of the largest producers of waste product. since this enables them to optimize their production process and accommodate regulatory requirements. Increased Operational Visualization – More Transparency The food & beverage HMI software vertical. For example. the lag in technology and standardization development suitable to address discrete industry requirements results in a slower adoption rate compared to the process industries. Organizations will require even more information to make optimized business decisions. and ―green‖ demands. This focus is on continuous performance and agility improvement. The movement in this direction benefits automation panels and panel PCs that Copyright 2010 © ARC Advisory Group • ARCweb. and Use Data Companies are increasingly interested in handling information. Sustainability will be part of all discussions and implementations. is one of the largest consumers of energy and manufacturing industry. Recognizing the twin value propositions of commonality and ease of vertical integration. But while the business drivers are in place.

Negatives are ruggedness. Many end users may also take the opportunity of a quieter business environment. A steady demand for services from the installed base cushions the impact of the economic downturn to a certain extent. Deciding Between IPCs and PLCs/PACs For the most part. Serving the Installed Base Maintenance replacements and revamps. Trends in the Industrial PC Market Various trends within the industrial PC market will affect future growth. for example. New projects. only account for about a third of the DCS market. rather than greenfield projects. This development offers various pos- 4-28 • Copyright 2010 © ARC Advisory Group • ARCweb. These include the Atom processor. dominate the overall automation business. PACs bility to leverage existing technologies that IT can more easily support. when there is not so much pressure on production. IPCs are valued for their flexibility and the possiFigure 4-6: Automation Topology and IPC vs. to reevaluate their overall automation and control system migration and evolution strategies. plus the typically short life cycles time of PC-based components and Microsoft-based operating systems.4W TDP).65W to 8W (the Z series also offer s 2GHz model with 2. durability. and reliability versus PLCs or PACs. Suppliers need to continue to serve and evolve their installed base.com • For Internal Use Only . Automation users in some world regions also still resist using PC technology in mission-critical applications. price development. and less-plastic aspects like the increasing acceptance of IPCs in manufacturing. The Atom The Intel Atom processor provides 800 MHz to 2 GHz performance with a maximum thermal design power (TDP) of 0. the market accepts IPCs as an alternative to PLCs or PACs. The decision between a PLC and a PC is in many cases only determined by economic aspects.Industrial PCs Worldwide Outlook • Market Analysis & Forecast are able to satisfy control and visualization needs with low investment and in one device.

While the percentage of custom products is very large in some companies (up to 40 percent) this depends on the batch size demanded from a customer.or quad-core IPCs. in some cases. While in the general-purpose PC world. to specific bundles of hardware and software. some suppliers are reluctant to use the Atom. This ranges from hardware customs. low-power Atom enables low-CPU power IPCs at a low price. especially if the motherboard is specifically designed for one IPC. With computing power increasingly becoming size and form factorindependent.Industrial PCs Worldwide Outlook • Market Analysis & Forecast sibilities to end users and machine builders. The Atom processor now makes standard IPC computing power available in small fanless IPCs at low cost. First. low energy consumption.). this is not necessarily a given with small. and low heat. fanless IPCs that must conform to environmentally hardened IP65 standards. Computing Power – Gets Larger and Size-Independent Many suppliers now put more CPU power in one PC and offer dual. In the long run. In this regard. boosting demand. Advantech. the Atom will be successful with small and large IPC suppliers. extremely small batch sizes and even custom board development are mostly found with suppliers that also sell chips (see Kontron. Copyright 2010 © ARC Advisory Group • ARCweb. However. etc.com • For Internal Use Only • 4-29 . Still. new markets and applications will open up for industrial PCs. embedded IPCs have fanless designs. Wide screen panel PCs are also very popular and. since other products offer similar capabilities. Atom-based IPCs directly compete with operator panels. One development is flatter panel PCs that are more easily integrated into machines. While smaller players often tend to have a larger overall share of customization. since by our definition. computing power no longer represents a constraint to compute-intensive software. upright wide screen panel PCs can replace a design with separate screen and keyboard. High Level of Customization Many companies provide a high level of customization. More computing power enables an industrial PC to be used in additional applications. high heat can be a problem. especially in visualization. the low-cost. Size-independent computing power also offers new form factors.

nondeterministic nature. This is especially true in the machine tool segment. PC-Based Safety Functionality While safety is often an important issue. tend to integrate the safety as deeply as possible. where speed and accuracy are required. More Real-time Applications Real-time applications represent a rising market area. Windows XP was the fastest growing operating system in terms of revenue. predominantly in discrete industries. Certainly. but over the long run. However. downtime analysis) on the same platform and connected to distributed I/O. this segment will remain strong.com • For Internal Use Only . Powerlink. and EthernetIP.Industrial PCs Worldwide Outlook • Market Analysis & Forecast Increased Openness and Functionality There is a clear trend towards letting the controller become the ―industrial blade server. Suppliers will increasingly explore development of failsafe IPCs that would enable an IPC to be used in some safety applications. many IPC suppliers do not offer safety functionality. Those suppliers that do. The IPC market clearly benefits from this development. especially for its firstto-market DIN Rail PCs. since openness and commuting power are core advantages of industrial PCs. In many industrial applications. due to Windows’ relatively large footprint and non-real time. ProfiNet. quality. many suppliers hesitate to use the Windows OS for control applications. DIN Rail PCs Beckhoff experienced strong growth in recent years. OEE. 4-30 • Copyright 2010 © ARC Advisory Group • ARCweb. while Windows has had large success in the HMI area.‖ combining both control and production management functions (historian. Linux is the number one operating system. Success of Microsoft Windows For HMI software. such as EtherCat. This goes hand in hand with the success of real-time Ethernet implementations. the trend towards distributed control is likely to decrease the benefit of having I/O mounted on the PC. accounting for roughly 60 percent of the total HMI market. unlike PLC suppliers.

Around the world. Economic Recovery and Economic Stimulus Packages The economic crisis severely impacted the global automation market. Economic stimulus packages will have a clear impact on automation markets. Copyright 2010 © ARC Advisory Group • ARCweb. The factors contributing to growth presented here are limited to those that affect the market as a whole. Summary This chapter attempted to unravel some of the mechanisms that drive the market for IPCs. Impact of Natural Resource Prices The prices of commodities will rise again and will push end users towards sustainable manufacturing that increase the amount of data needed and the need for automation equipment such as IPCs. the demand constantly grows. governments launched stimulus packages that predominately pushed utilities and other infrastructure-related industries. A brief overview of the factors contributing to and inhibiting growth follows.Industrial PCs Worldwide Outlook • Market Analysis & Forecast Hardware/Software Bundles to Address Specific Industry Requirements While most European suppliers either already provide solution packages or position themselves with high-quality custom IPCs.com • For Internal Use Only • 4-31 . the trend toward hardware commoditization drives more suppliers – European and Asian alike – to offer more software with their IPCs. Hybrid Industries The hybrid industries represent a classical area for IPCs and also an area of stable demand for automation products. economic outlooks for 2010 have been corrected upwards. most Asian suppliers have been more successful offering IPCs from large-scale production. Factors Contributing to Growth Numerous factors impact the future market size as well as the market potential. while the previous paragraphs looked at a wide range of factors. Especially in emerging economies. Suppliers also see both software and services as a means to improve hardware sales. However. Now.

who have to automate larger parts of their production to stay competitive. the Atom will open new field of application. and water & wastewater industries. With an eye towards improving productivity. This is especially the case in food & beverage. low-power Atom processor provides enabling technology for low-CPU power IPCs at a low price. more integrated architecture. Eastern Europe and Russia: The Wild East Many Eastern European countries (Poland. India became much more integrated into the world economy. and Slovakia) have done well during the crisis and will further drive IPC market growth as they develop towards a higher and more extensive degree of automation. since customers are familiar and comfortable with the PC architecture and functionality. where one device incorporates functionality like logic. The Atom The low-cost. Automation markets. but even stronger on intermediate goods like displays. in general. low energy consumption. Ever-Increasing Global Competition This will have negative influence on the prices of industrial PCs. This will drive the demand of IPCs. electric power. but will also shift towards more sophisticated systems with greater capabilities for achieving international quality standards.Industrial PCs Worldwide Outlook • Market Analysis & Forecast Building Automation The booming building automation market increasingly incorporates more classical automation technology. motion control.com • For Internal Use Only . India and China ARC believes that China will not only demand more automation equipment as wages rise. and low heat. and also visualization. 4-32 • Copyright 2010 © ARC Advisory Group • ARCweb. benefit from the increasing competition felt by their customers. In the long run. oil & gas. Slovenia. Also. IPCs will increasingly be deployed. since it helps to decouple computing power from physical size. Czech Republic. Merging of Layers and Functions The classical automation topology has merged into a flatter. many are selectively looking at areas where they can replace manpower with automated processes.

Especially a drop in display price will dampen the growth in revenue. Capital Investment and Structural Effects Even though central banks (such as the US Federal Reserve. Chip Shortage Beginning in late 2009 there are rumors about a possible chip shortage in 2010. a credit crunch could impact the market heavily.Industrial PCs Worldwide Outlook • Market Analysis & Forecast Factors Inhibiting Growth Several factors can inhibit future market growth. when economy recovers. if it happens at all. but the impact depends also on the extend of a shortage. the European Central Bank. A sharpened credit crunch and possible structural effects in manufacturing could lengthen the crisis for IPC suppliers. so do PACs. In particular. interest rates for industry remain high and loans often remain difficult to obtain. due to dropping prices and saturated markets. As a result. Copyright 2010 © ARC Advisory Group • ARCweb. This could affect the market of IPCs badly. Maturing Market As the market in general matures. IPCs face continuing competition from both PLCs and PACs in certain industries and global markets. creating a credit crunch. Competition with PAC/PLCs While IPCs become increasingly more capable. market growth will constantly slow down. Current questions regarding an upcoming chip shortage could also inhibit growth. and the Bank of England) lowered target interest rates.com • For Internal Use Only • 4-33 .

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com .Market Forecast Group Figure 4-1 Total Shipments of Industrial Personal Computers Figures in Millions of US Dollars.www.For Internal Use Only .8% Copyright 2010 © ARC Advisory Group . Total Market CAGR = 8.ARCweb.

Total Market CAGR = 7.ARCweb.3% Copyright 2010 © ARC Advisory Group .For Internal Use Only .Market Forecast Group Figure 4-2 Total Shipments of Industrial Personal Computers for North America Figures in Millions of US Dollars.www.com .

ARCweb. Total Market CAGR = 9.For Internal Use Only .Market Forecast Group Figure 4-3 Total Shipments of Industrial Personal Computers for EMEA Figures in Millions of US Dollars.1% Copyright 2010 © ARC Advisory Group .com .www.

com .0% Copyright 2010 © ARC Advisory Group .For Internal Use Only .ARCweb.www. Total Market CAGR = 9.Market Forecast Group Figure 4-4 Total Shipments of Industrial Personal Computers for Asia Figures in Millions of US Dollars.

For Internal Use Only .com .5% Copyright 2010 © ARC Advisory Group .ARCweb. Total Market CAGR = 6.Market Forecast Group Figure 4-5 Total Shipments of Industrial Personal Computers for Latin America Figures in Millions of US Dollars.www.

2 809.2 855.150.1% 9.803.312.4 16.5% 8.8 2010 263.2 2.Market Forecast Group Figure 4-6 Total Shipments of Industrial Personal Computers by World Region Figures in Millions of US Dollars World Region North America EMEA Asia Latin America Total 2009 265.1 17.938.0 20.9 CAGR 7.5 16.2 672.036.014.0 2014 377.ARCweb.422.9 1.1 1.0 850.www.7 1.141.4 2.0% 6.1 1.6 915.810.2 1.748.3 1.7 2013 336.8 22.4 2012 299.1 2.com .1 1.6 730.For Internal Use Only .3% 9.1 675.6 916.8% Copyright 2010 © ARC Advisory Group .0 2011 274.4 18.

4 16.2 672.9 1.ARCweb.com .www.9% 100.1% 9.7% 47.036.8 22.0% 6.312.0 850.1 1.8% 100.7% 0.9 13.803.3% 0.Market Forecast Group Figure 4-7 Total Shipments of Industrial Personal Computers by World Region Figures in Millions of US Dollars World Region North America EMEA Asia Latin America Total 2009 Revenues 2009 Revenues% 265.For Internal Use Only .748.7% 47.1 1.8% Copyright 2010 © ARC Advisory Group .8 14.8% 37.3% 9.5% 8.0% CAGR 7.1% 37.0% 2014 Revenues 2014 Revenues% 377.1 2.

938.5 138.www.0 2011 1.2 183.8 2010 1.com .0 2014 2.536.9 CAGR 8.5 125.238.For Internal Use Only .810.6 2.5 1.3 212.748.9 2.Market Forecast Group Figure 4-8 Total Shipments of Industrial Personal Computers by Revenue Category Figures in Millions of US Dollars Revenue Category Hardware Revenues Software Revenues Total 2009 1.8% Copyright 2010 © ARC Advisory Group .7% 8.422.686.ARCweb.684.7 158.983.7 2013 2.803.9 1.799.141.9 1.4 2012 1.0 2.5% 12.8 116.

7 2013 2.572.536.6 2.5 131.2 2014 2.3 1.7 176.www.Market Forecast Group Figure 4-9 Total Shipments of Industrial Personal Computers for Hardware Revenue by Type Figures in Millions of US Dollars 2009 PC Hardware Revenue Peripheral Hardware Revenue Total 1.8 2010 1.2 1.572.For Internal Use Only .799.6 152.ARCweb.085.359.3 CAGR 8.684.5% Copyright 2010 © ARC Advisory Group .5 114.9 116.983.5 2012 1.1% 8.852.5 2011 1.5% 9.5 2.682.238.com .6 1.5 1.9 111.686.

0 26.9 2012 115.For Internal Use Only .4 18.0 2013 133.6 116.ARCweb.2 22.6 CAGR 12.5 2011 102.www.9 2014 153.7% Copyright 2010 © ARC Advisory Group .7 28.2 17.1 14.0 212.9 2010 92.6 125.1% 12.2% 12.5 14.Market Forecast Group Figure 4-10 Total Shipments of Industrial Personal Computers for Software Revenues By Type Figures in Millions of US Dollars 2009 Operating System Real Time Operating Systems Other (Application Software) Total 85.4 158.6 33.9 18.0 183.5% 14.7 23.1 138.7 16.1 20.com .

For Internal Use Only .www.ARCweb.Market Forecast Group Figure 4-11 Total Shipments of Industrial Personal Computers for Chemical Figures in Millions of US Dollars. Total Market CAGR = 6.com .1% Copyright 2010 © ARC Advisory Group .

9% Copyright 2010 © ARC Advisory Group . Total Market CAGR = 7.ARCweb.com .www.Market Forecast Group Figure 4-12 Total Shipments of Industrial Personal Computers for Oil & Gas Figures in Millions of US Dollars.For Internal Use Only .

com .Market Forecast Group Figure 4-13 Total Shipments of Industrial Personal Computers for Food & Beverage Figures in Millions of US Dollars.2% Copyright 2010 © ARC Advisory Group .www.ARCweb.For Internal Use Only . Total Market CAGR = 9.

For Internal Use Only . Total Market CAGR = 7.Market Forecast Group Figure 4-14 Total Shipments of Industrial Personal Computers for Pharmaceutical & Biotech Figures in Millions of US Dollars.9% Copyright 2010 © ARC Advisory Group .www.ARCweb.com .

9% Copyright 2010 © ARC Advisory Group . Total Market CAGR = 12.ARCweb.www.Market Forecast Group Figure 4-15 Total Shipments of Industrial Personal Computers for Pulp & Paper Figures in Millions of US Dollars.com .For Internal Use Only .

4% Copyright 2010 © ARC Advisory Group . Total Market CAGR = 10.Market Forecast Group Figure 4-16 Total Shipments of Industrial Personal Computers for Electric Power Figures in Millions of US Dollars.com .For Internal Use Only .www.ARCweb.

Total Market CAGR = 7.Market Forecast Group Figure 4-17 Total Shipments of Industrial Personal Computers for Water & Wastewater Figures in Millions of US Dollars.com .For Internal Use Only .www.ARCweb.6% Copyright 2010 © ARC Advisory Group .

For Internal Use Only .ARCweb.0% Copyright 2010 © ARC Advisory Group .com .www.Market Forecast Group Figure 4-18 Total Shipments of Industrial Personal Computers for Cement & Glass Figures in Millions of US Dollars. Total Market CAGR = 6.

ARCweb.7% Copyright 2010 © ARC Advisory Group . Total Market CAGR = 5.com .Market Forecast Group Figure 4-19 Total Shipments of Industrial Personal Computers for Automotive Figures in Millions of US Dollars.For Internal Use Only .www.

com . Total Market CAGR = 5.For Internal Use Only .www.0% Copyright 2010 © ARC Advisory Group .ARCweb.Market Forecast Group Figure 4-20 Total Shipments of Industrial Personal Computers for Aerospace & Defense Figures in Millions of US Dollars.

www.ARCweb.For Internal Use Only .com .Market Forecast Group Figure 4-21 Total Shipments of Industrial Personal Computers for Semiconductors Figures in Millions of US Dollars. Total Market CAGR = 6.3% Copyright 2010 © ARC Advisory Group .

Market Forecast Group Figure 4-22 Total Shipments of Industrial Personal Computers for Building Automation Figures in Millions of US Dollars.ARCweb.www.8% Copyright 2010 © ARC Advisory Group . Total Market CAGR = 9.com .For Internal Use Only .

ARCweb.www.For Internal Use Only .2% Copyright 2010 © ARC Advisory Group . Total Market CAGR = 6.Market Forecast Group Figure 4-23 Total Shipments of Industrial Personal Computers for Machinery Manufacturing Figures in Millions of US Dollars.com .

com .For Internal Use Only . Total Market CAGR = 9.Market Forecast Group Figure 4-24 Total Shipments of Industrial Personal Computers for Electronics & Electrical Figures in Millions of US Dollars.9% Copyright 2010 © ARC Advisory Group .www.ARCweb.

2 81.9% 13.3 1.7% 5.6 111.0 85.8 98.ARCweb.2 117.7 127.8 235.8% 8.www.8% 6.3 116.For Internal Use Only .3 194.2 305.0 63.8 125.7 11.5 9.8 8.Market Forecast Group Figure 4-25 Total Shipments of Industrial Personal Computers by Industry Figures in Millions of US Dollars Industry Chemical Oil & Gas Food & Beverage Pharmaceutical & Biotech Pulp & Paper Electric Power Water & Wastewater Cement & Glass Automotive Aerospace & Defense Semiconductors Building Automation Machinery Manufacturing Electronics & Electrical Other Total 2009 76.2% 9.9% 12.2 177.8 237.8 2010 68.2 2.422.2 82.8% Copyright 2010 © ARC Advisory Group .6 159.5 138.0 143.1% 7.9 177.0 133.8 150.5 163.3 277.5 70.938.7 2013 90.5 222.7 69.3 301.2 21.3 187.1 264.9 127.4 238.9 196.4 192.9 214.4 120.5 241.8 79.9 CAGR 6.141.4% 7.1 175.9 8.9 180.4 1.7 269.6% 6.1 10.0% 6.7 196.2 2.1 22.6 361.8 345.0 81.810.7 102.6 58.5 30.7 23.4 2012 80.3 88.8 312.9% 9.1 27.2 61.0 189.1 24.3 119.7 106.0 167.5 93.8 111.2 1.4 205.3 90.0 2014 102.8 204.5 217.2 215.0% 5.9% 10.8 269.5 168.6 137.2 105.0 2011 73.1 220.com .5 8.2 217.2% 7.3 119.748.6 156.0 147.6 248.3% 9.803.6 255.9 136.6 2.

6% 1.6 255.3 119.3% 11.2 117.8% 8.7 11.3 90.5% 10.4% 10.6% 1.748.6% 10.0% 5.7% 5.com .5% 100.7% 14.0% 12.9% 12.4% 6.5% 3.8% 7.8% 13.1% 6.0% 2014 Revenues 2014 Revenues% 102.0 189.4 1.6% 6.9% 4.9 3.5 241.1 220.9% 10.3 187.2 305.8 4.0% CAGR 6.5% 7.7 23.7 196.5 168.5 8.4% 7.7 102.For Internal Use Only .3 277.3% 9.Market Forecast Group Figure 4-26 Total Shipments of Industrial Personal Computers by Industry Figures in Millions of US Dollars Industry Chemical Oil & Gas Food & Beverage Pharmaceutical & Biotech Pulp & Paper Electric Power Water & Wastewater Cement & Glass Automotive Aerospace & Defense Semiconductors Building Automation Machinery Manufacturing Electronics & Electrical Other Total 2009 Revenues 2009 Revenues% 76.4% 5.1% 4.3% 9.www.5 138.2% 9.6% 6.1% 5.2 61.1% 7.2% 7.9% 13.8% Copyright 2010 © ARC Advisory Group .0 147.8% 6.7% 3.0% 6.2% 100.5 30.9 180.7% 0.8% 8.7 69.6 361.9 136.9% 9.2% 3.2 81.9% 9.7 127.803.8 345.6 2.4% 0.9 177.ARCweb.1% 8.4% 4.

7 16.5 686.748.422.9 CAGR 10.2 162.3 19.938.810.4 2012 1.For Internal Use Only .141.8% Copyright 2010 © ARC Advisory Group .0 802.0% 7.5% 8.3 163.305.www.512.5 1.131.com .8 1.5 2.005.7 2013 1.0 2011 1.ARCweb.Market Forecast Group Figure 4-27 Total Shipments of Industrial Personal Computers by Sales Channel Figures in Millions of US Dollars Sales Channel Direct Sales Independent Reps/Distributors Internet Systems Integrators/Value Added Resellers Total 2009 938.5 971.2% 4.9 173.8 2.3 245.1 15.0 2014 1.8 18.7 697.5 1.2 2.9 743.5 15.803.8 2010 934.7 881.8 191.4 15.8% 8.1 216.

185.748.com .0 2011 617.341.803.8 2.For Internal Use Only .0 2014 921.4 1.8 367.938.1 1.9 CAGR 12.4 438.2 1.2 953.5% 8.051.1 941.2 1.141.810.7 2013 798.1 396.www.6 2.8% Copyright 2010 © ARC Advisory Group .Market Forecast Group Figure 4-28 Total Shipments of Industrial Personal Computers by Customer Type Figures in Millions of US Dollars Customer Type End Users Original Equipment Manufacturers Systems Integrators Total 2009 523.4 2012 693.3% 7.3 2.5 339.0 899.9 350.2 1.8 1.4 486.422.8 2010 560.0% 7.ARCweb.

Market Forecast Group Figure 4-29 Total Shipments of Industrial Personal Computers for Robotics Figures in Millions of US Dollars.com .www.For Internal Use Only .8% Copyright 2010 © ARC Advisory Group . Total Market CAGR = 2.ARCweb.

ARCweb. Total Market CAGR = 11.com .www.Market Forecast Group Figure 4-30 Total Shipments of Industrial Personal Computers for HMI Figures in Millions of US Dollars.8% Copyright 2010 © ARC Advisory Group .For Internal Use Only .

com .www.Market Forecast Group Figure 4-31 Total Shipments of Industrial Personal Computers for Vision Figures in Millions of US Dollars.5% Copyright 2010 © ARC Advisory Group .ARCweb.For Internal Use Only . Total Market CAGR = 8.

com . Total Market CAGR = 7.ARCweb.For Internal Use Only .8% Copyright 2010 © ARC Advisory Group .Market Forecast Group Figure 4-32 Total Shipments of Industrial Personal Computers for Logic (Soft PLC) Figures in Millions of US Dollars.www.

Market Forecast Group Figure 4-33 Total Shipments of Industrial Personal Computers for Distributed Control (Soft DCS) Figures in Millions of US Dollars.com .6% Copyright 2010 © ARC Advisory Group .ARCweb. Total Market CAGR = 6.www.For Internal Use Only .

Total Market CAGR = 5.8% Copyright 2010 © ARC Advisory Group .ARCweb.For Internal Use Only .www.com .Market Forecast Group Figure 4-34 Total Shipments of Industrial Personal Computers for Motion Figures in Millions of US Dollars.

www. Total Market CAGR = 6.com .For Internal Use Only .Market Forecast Group Figure 4-35 Total Shipments of Industrial Personal Computers for CNC Figures in Millions of US Dollars.3% Copyright 2010 © ARC Advisory Group .ARCweb.

For Internal Use Only .4% Copyright 2010 © ARC Advisory Group . Total Market CAGR = 6.Market Forecast Group Figure 4-36 Total Shipments of Industrial Personal Computers for Data Acqisition Figures in Millions of US Dollars.www.ARCweb.com .

Market Forecast Group Figure 4-37 Total Shipments of Industrial Personal Computers for Communication Gateway Figures in Millions of US Dollars.For Internal Use Only .ARCweb.7% Copyright 2010 © ARC Advisory Group . Total Market CAGR = 9.www.com .

1 187.141.www.3% 6.1 82.2 56.8 55.5 265.3 905.7 63.9 62.8 2010 57.8% Copyright 2010 © ARC Advisory Group .9 417.3 62.6 128.2 178.0 227.8 359.6 343.5 84.4% 9.5 789.8 94.6 98.4 92.2 1.com .8 1.4 194.748.7 598.Market Forecast Group Figure 4-38 Total Shipments of Industrial Personal Computers by Application Figures in Millions of US Dollars Application Robotics HMI Vision Logic (Soft PLC) Distributed Control (Soft DCS) Motion CNC Data Acqisition Communication Gateway Other Total 2009 64.0 64.9 450.4 167.803.0 2.0 2014 74.ARCweb.0 695.4 2012 61.4 193.4 71.046.6% 5.5 72.2 2.1 1.7 196.0 153.5 100.9 65.3 384.3 73.2 160.7 2013 67.2 225.5% 7.1 166.8% 8.9 CAGR 2.8% 11.9 281.6 214.8% 6.7 621.9 330.7% 7.8% 6.2 246.5 65.9 157.938.8 2.1 117.For Internal Use Only .4 86.4 107.422.5 198.0 96.0 2011 58.8 1.3% 8.4 176.0 76.810.8 69.

com .ARCweb.Market Forecast Group Figure 4-39 Total Shipments of Industrial Personal Computers for 19" Rack Mount Figures in Thousands of Units.For Internal Use Only .www.8% Copyright 2010 © ARC Advisory Group . Total Market CAGR = 7.

ARCweb. Total Market CAGR = 7.com .Market Forecast Group Figure 4-40 Total Shipments of Industrial Personal Computers for Box PC Figures in Thousands of Units.For Internal Use Only .www.4% Copyright 2010 © ARC Advisory Group .

www.ARCweb.Market Forecast Group Figure 4-41 Total Shipments of Industrial Personal Computers for DIN Rail Figures in Thousands of Units. Total Market CAGR = 4.For Internal Use Only .com .8% Copyright 2010 © ARC Advisory Group .

ARCweb.5% Copyright 2010 © ARC Advisory Group . Total Market CAGR = 13.For Internal Use Only .Market Forecast Group Figure 4-42 Total Shipments of Industrial Personal Computers for Panel PC Figures in Thousands of Units.com .www.

com .0 50.8% 7.2 33.0 36.7 65.8% 13.4% 4.0 929.0 1.445.4 2014 268.9 495.5 341.1 2010 210.7 2012 232.4 2013 248.6% Copyright 2010 © ARC Advisory Group .6 41.010.For Internal Use Only .9 375.2 577.4 30.5 1.5 337.8 426.8 57.5% 8.6 375.3 31.8 2011 221.3 CAGR 7.Market Forecast Group Figure 4-43 Total Shipments of Industrial Personal Computers by Type Figures in Thousands of Units Type 19" Rack Mount Box PC DIN Rail Panel PC Other Total 2009 184.4 488.122.3 914.1 46.4 306.ARCweb.7 427.7% 9.270.9 41.5 51.3 309.7 1.5 44.www.9 335.0 1.

com .ARCweb.8% Copyright 2009 © ARC Advisory Group .Market Forecast Group Figure 4-44 Shipments of Standard 19” Rack Mount Industrial PCs Figures in Millions of US Dollars. Total Market CAGR = 3.www.For Internal Use Only .

For Internal Use Only .ARCweb.www. Total Market CAGR = 8.Market Forecast Group Figure 4-45 Shipments of Standard Box Industrial PCs Figures in Millions of US Dollars.com .3% Copyright 2009 © ARC Advisory Group .

Market Forecast Group Figure 4-46 Shipments of Standard Panel Industrial PCs Figures in Millions of US Dollars.com .www.For Internal Use Only .6 % Copyright 2009 © ARC Advisory Group . Total Market CAGR = 10.ARCweb.

7 350.5 344.9 2009 Millions of Dollars 2011 280.6% 8.3 1892.1 369.5% 19" Rack Mount Box PC Panel PC Other Total 276.0% 3.8 523.7 1.6% 8.6 590.6 460.3 851.8% 8.6 Copyright 2009 © ARC Advisory Group .7 350.5 47.3 CAGR CAGR 3.357.2 59.0 1.7 1.1 1.www.3 1.8 608.491.8 53.com .1 1258.675.8 742.2 41.7 2014 332.6 590.Market Forecast Group Figure 4-47 Shipments of Standard Industrial PCs by Type Figures in Millions of US Dollars 2009 19" Rack Mount Box PC Panel PC Other Total 276.0 977.6 41.6% 27.263.5% Percent 22.9% 46.2 59.3% 100.6% 7.0% Percent 17.1% 100.4 408.3% 10.0 977.3% 10.For Internal Use Only .6% 51.6 2010 269.3 43.6% 3.4 2012 292.8% 8.9% 3.258.6% 7.892.0 1.0% 27.ARCweb.8 523.2 664.3 2014 Millions of Dollars 332.2 41.3 2013 310.

ARCweb.www.Market Forecast Group Figure 4-48 Shipments of Embedded Industrial Din Rail PCs Figures in Millions of US Dollars. Total Market CAGR = 7.6% Copyright 2009 © ARC Advisory Group .com .For Internal Use Only .

8% Copyright 2009 © ARC Advisory Group . Total Market CAGR = 6.www.com .ARCweb.For Internal Use Only .Market Forecast Group Figure 4-49 Shipments of Embedded Industrial Box PCs Figures in Millions of US Dollars.

com .0 % Copyright 2009 © ARC Advisory Group .For Internal Use Only .www.ARCweb. Total Market CAGR = 11.Market Forecast Group Figure 4-50 Shipments of Embedded Industrial Panel PCs Figures in Millions of US Dollars.

Market Forecast Group Figure 4-51 Shipments of Embedded Industrial 19” Rack Mount PCs Figures in Millions of US Dollars.ARCweb.2 % Copyright 2009 © ARC Advisory Group . Total Market CAGR = 6.www.For Internal Use Only .com .

5% 31.2 13.0% 6.1 133.6% 6.www.1 133.8% 11.6 15.4 32.2 185.1 2013 45.9% 4.4 CAGR Percent 11.4 7.0% 6.5% 42.0% 4.For Internal Use Only .3 168.0 34.1 2011 35.0 309.6% 6.ARCweb.2 313.9% 8.2 313.0 19.6 42.8 132.2 127.4 100.2% 39.1 31.2% 100.4 100.2% 7.1 361.9% 9.5 2012 40.1% 100.9 Percent 11.2 111.2 185.9 2010 34.7 164.3 467.0 19.3% Copyright 2009 © ARC Advisory Group .1 145.2 13.1 145.3 31.9 17.4 103.1% 9.3 168.6% 36.2 13.0 409.8 2014 CAGR 52.0% 2014 Millions of Dollars 52.0% 7.Market Forecast Group Figure 4-52 Shipments of Embedded Industrial PCs by Type Figures in Millions of US Dollars 2009 DIN Rail Box PC Panel PC Rack Mount Other Total 36.7 325.1 37.3% 2009 Millions of Dollars DIN Rail Box PC Panel PC Rack Mount Other Total 36.com .9% 8.3 126.3 467.4 13.1 31.8% 11.6 42.2% 7.

572.4 1.9 2012 744.5 1.257.2 2.5 2010 646.682.7 1.9 2011 203.5% Copyright 2009 © ARC Advisory Group .1 892.6 2014 CAGR 300.682.085.5 2.824.1 1.0 1.5% 2009 IPCs without Software Other Total 680.572.1 2.7 6.372.108.479.085.3 1.1 1.2 1.434.7 2.0 998.7 2.4% 10.8 1.4% 8.6 1.572.5% 8.852.359.624.5 2010 191.5 2013 261.7 8.5 2013 827.com .6 2014 CAGR 925.852.359.059.9 926.9 2012 227.8 1.For Internal Use Only .Market Forecast Group Figure 4-53 Shipments of Industrial PC Subcategories Figures in Millions of US Dollars 2009 IPCs without Rotating Parts and NV Ram Other Total 200.572.1 1.9 2011 684.5 1.381.9 1.ARCweb.www.3 1.5 1.0% 8.

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com • For Internal Use Only • 5-1 .Industrial PCs Worldwide Outlook • Supplier Profiles Chapter 5 Supplier Profiles The following pages provide profiles of the leading suppliers of Industrial PCs (IPCs) to the worldwide market. and system-level offerings. associated components. Information is provided regarding current model numbers. communication protocols. These profiles analyze the total business of each company as well as the IPC-related portion. This information was derived from company annual reports and in-depth discussions with senior company officials. Information on served markets and alliances is also provided where appropriate. Copyright 2010 © ARC Advisory Group • ARCweb.

Aaeon. Panel. but continuously broadens their portfolio. and Rack Mount Industrial PCs. In terms of industriel PCs there are three series that are relevant for this study: The AEC series. which are embedded Panel PCs. Europe.eu/ Key Products AEC series (embedded box). and Full-Size CPU cards. Asia. In 2008 Aaeon opened an office in Germany. 5-2 • Copyright 2010 © ARC Advisory Group• ARCweb. AOP series (embedded panel). Fanless Box.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Aaeon Web: http://www. and the APC series. China. Fanless Embedded Controller. Blue Chip Technology Key Acquisitions: In 2000. 1999 AAEON introduced new the SMT series and was the first Taiwanese IPC manufacturer that went public. Panel PCs Regions North America. which are Panel PCs. which is a embedded Box PC. Embedded Single Board Computer. Partnerships and Acquisitions Key Partnerships: Kontron. 1998 a Chinese and European Sales office were established. since it is an Operator Panel. Aaeon‟s key product still remains embedded single board products. Display Monitors and LCD PCs. Since 2004 an engineering group for industrial systems was established and made industrial applications one of their key vertical markets. the AOP series. The AOP-8070 is excluded. Panel PCs. Advantech. Description Aaeon was established in 1992 in Taiwan and first focused on single board solutions. Adlink worked in the nanoETXexpress form factor (84 mm x 55 mm) to improve transparency. and APC series(panel PC). HalfSize CPU cards. before they converted the product lines to Compact Boards. so far.. a leading Panel PC manufacturer. In 1996 Aaeon already employed over 100 employees and opened an office in New Jersey. Middle East & Africa.aaeon. AAEON acquired Astech Inc. In 2000 Aaeon began to complete the IPC and Opertor Terminal Line offering to Industrial Workstations.com • For Internal Use Only .

com • For Internal Use Only • 5-3 .Industrial PCs Worldwide Outlook • Supplier Profiles Strengths and Challenges Top strengths: Fast growing and clear development into industrial environemnt. already internationalized Top challenges: become accepted in as a supplier for operator panes and IPCs for manufacturing in Europe Copyright 2010 © ARC Advisory Group • ARCweb. based in Taiwan.

5 million in 2006 to US$ 93. If Adlink pushes further in the direction they started with the DPAC.com • For Internal Use Only . Toshiba Teli Corporation to provide vision platform solutions. Inc. Description Adlink was founded in August 1995 in Taipei. and readysystem series that are all embedded box PCs. PCI Cards. with Kontron to Deliver New microETXexpress platform Key Acquisitions: Ampro Computer.com Key Products Industrial PCs. Inc. PC components. China. Partnerships and Acquisitions Key Partnerships: joint-venture with ITX-EG in Japan. One reason was the acquisition of Ampro Computers. ruffsystem. Namely the DPAC. Singapore. Adlink is only represented in this study with a small number of their products. Motherboards Regions Asia.siemens. or SCADA applications. Taiwan and has operations in America. they will be a strong competitor to the established IPC suppliers in Europe.ad. Only recently the DPAC was launched and Adlinked entered the area of “finished” IPCs. Adlink currently has 600 employees and was able to nearly double ots revenue from US$ 57. The majority of ADlinks business is selling IPC cards and components dor Industrial PCs. The development during the last years was to move up the value chain in IPC production. and Shenzhen (China). logic control. in 2008. the development of the DPAC and the opening of offices in Europe (2008 in France and 2005 in Germany). which included the acquisition of Ampro Computer.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Adlink Web: http://www. Those components range from small cards. Beijing. Inc. Shanghai. 5-4 • Copyright 2010 © ARC Advisory Group• ARCweb. milsystem. to motherboards to IPC housings.7 million in January 2009.. Adlink also offers PC cards for motion control.

modular design to fit user needs.Industrial PCs Worldwide Outlook • Supplier Profiles Strengths and Challenges Top strengths: Large portfolio of Components for industrial PCs. low prices Top challenges: get established as reliable supplier for automation outside of Asia. find the right balance between finished product business and component business. established a service business Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only • 5-5 .

Box PCs. and the other on its branded products and solutions activities. Rackmount PCs. the embedded and industrial computing revenue was the largest section of Advantech with USD 184 million. Advantech covers a wide array of applications in diverse industries.com • For Internal Use Only . a community of embedded and communications developers and solution providers. Thereof 31 percent were earned in China and Taiwan and 46 in Europe and North America. Advantech expended rapidly and focused more than most other Taiwanese IPC suppliers on automation and industrial needs. Din-Rail Mounted PCs. Advantech is reorganizing into two major businesses: One focused on its embedded. Advantech is a Premier Member of the Intel® Embedded and Communications Alliance. "design-in" activities. software. Asia Description Advantech was founded in 1983 by three former Hewlett Packard engineers in Taiwan. PC based controllers. Regarding solutions activities.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Advantech Web: http://www. In 2008 the annual revenue was USD 523 million. global logistics support. where it is already an established brand. 5-6 • Copyright 2010 © ARC Advisory Group• ARCweb. design services.advantech. a status many other Taiwanese suppliers till have to work on. Middle East & Africa. Advantech offers system integration hardware. Europe. eServices & Applied Computing. Industrial communication equipment Variety of no-industrial products Regions North America. Advantech‟s strength is certainly the rapid expansion to Europe and the US. The industrial Automation revenue was USD 115 million. In 2008 Advantech had 3731 employees thereof 1330 are located in Taiwan.de/eautomation/ Key Products Automation Software. Advantech will put investments on several high-growth sectors. For continued growth. offering products and solutions in three business categories: Embedded ePlatform. and a front and back office e-business infrastructure. Panel PCs. and Industrial Automation groups.

including a number of touch panel computers. which is also available as an embedded version. The AWS and IPPL series are also Industrial Panel PCs. well present in emerging economies. the ARK-3400 expansible compact series. Established provider for Panel and Box PCs. Advantech offers centralized and decentralized motion control solutions. Advantech also offers motion controllers as PCI cards. The Din-rail models also consist of several industrial controllers: The Micro Pac and the ADAM-5000 series are logic controllers. Partnerships and Acquisitions Key Partnerships: Advansus/Taiwan/Motherboard design & Manufacturing Key Acquisitions: None to report Strengths and Challenges Top strengths: Branding. Embedded Panels are the following models: TPC 120H. Power & Energy. TPC 1770H . The PWS series is a rugged portal industrial PC. TPC 1270 H. and TPC 1750 H. Embedded Box IPCs are the ARK-1300 ultra-compact series. that are also able to handle up to four axis. the ARK-3300 Compact Box Series. Din Rail: UNO-1000 and UNO-1100. These are excluded in this study.com • For Internal Use Only • 5-7 . The AMAX series are decentralized motion controllers. TPC 66SN. TPC 66T. and Telecom & Network Security. Intelligent Life. broad product range. TPC 660G. and the ARK-4000 Series PC. the compact fanless Box UNO-2000 series. combining western quality standards with Asian production costs Copyright 2010 © ARC Advisory Group • ARCweb. TPC 1261H. TPC 660E. Industrial Box PCs include the ARK 5280 series. Centralized solutions include the PEC-3240 and offer the capability to control up to 4 axis. and the TPC 30 series. which offers PCI slots for expansions. Rackmout industrial PCs are the UNO-4000 series. TPC 662G. Industrial Panel PCs are: TPC 870 H. since PCI cards are excluded in General Advantech offers a large range of Panel IPCs. In addition to the classical motion controller housing and design. the high performance fanless Box PCs UNO-3000 series. global presence.Industrial PCs Worldwide Outlook • Supplier Profiles such as: Medical. Factory and Machine Automation. Intelligent Transportation.

com • For Internal Use Only . get established as a provider for logic and motion control. increasing competition from commercial vendors in Taiwan. core regional markets begin to mature.Industrial PCs Worldwide Outlook • Supplier Profiles Top challenges: Dealing with increasing labor costs in Asia. 5-8 • Copyright 2010 © ARC Advisory Group• ARCweb.

HMI600. In contrary to many IPC suppliers in Europe ASEM S. production and marketing of solutions and systems based on the open and standard architecture of PCs and of embedded technologies for the application sectors of industrial automation and professional IT. PB1000. and as Box PCs (WS500. as Panel PCs (PB500. WS500. POS & retail systems. and custom-oriented solutions. WS500-TE. FT500-TE . professional computers. FT600-TE). portfolio is basically divided into 4 product lines: Embedded & industrial PCs. and PB800). PB1200.asem. ASEM is dedicated to the design. ASEM offers the CoDeSys„ soft PLC runtime system for Windows XP (C oDeSys SP RTE) and Windows CE (CoDeSys SP) Embedded Box (SMARTBOX. and RV500).p. OT1300) the embedded Panel PCs eDOMO and DOMO1000 are specifically designed for building Automation. ASEM S. Partnerships and Acquisitions Key Partnerships: CoDeSys Key Acquisitions: None to report Copyright 2010 © ARC Advisory Group • ARCweb. around 30 percent of the total staff (120) is employed in technical and R&D departments.com • For Internal Use Only • 5-9 . WS600. PB70xx. OT800. does not total rely on motherboards from Taiwan. FT600. WS600-TE. PB600.p. FT500. Middle East & Africa Description ASEM was founded in 1979 in Buia (UD).A. Since ASEM. OT1200. designs and manufactures its own Industrial PCs. Standard IPCs are available as Rackmount IPCs (PR90xx and PR40xx).it Key Products Industrial PCs Regions Europe.Industrial PCs Worldwide Outlook • Supplier Profiles Company: ASEM Web: http://www. OT1000. and is therefore offering 100 percent industrial components.A. embedded Panel PCs (OT600. PB1300.

Top challenges: Limited global presence 5-10 • Copyright 2010 © ARC Advisory Group• ARCweb.com • For Internal Use Only .Industrial PCs Worldwide Outlook • Supplier Profiles Strengths and Challenges Top strengths: All is designed and manufactured of one company.

China Description Axiomtek was founded 1990 in Taipei .standard Box IPC (Vertical Purpose Embedded System). IPC421. Axiomtek also offers Software for industrial PCs (e.axiomtek. IPC220. and display solutions. Partnerships and Acquisitions Around 30 percent of the Key Partnerships: None to report Key Acquisitions: None to report Strengths and Challenges Top strengths: already started to develop solutions out of hard. employees are located outside of Taiwan. network technologies. SCADA). touch panel computers. industrial & embedded PCs. In 2008 Axiomtek already had 570 employees and USD 53.8 million revenue.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Axiomtek Web: http://www. IPC121.PANEL2000 Slim Client Panel Computer ). The company‟s portfolio now includes single board computers.com/ Key Products Embedded PCs and embedded computing products Regions North America. industrial automation products. standard panel IPC (PANEL1000 Series). standard rack mount IPC (IPC423.g.and software Top challenges: develop solution business Copyright 2010 © ARC Advisory Group • ARCweb. Asia. and IPC120). GOT Series. embedded panel PC (VTA Series. Embedded box PC (eBOX series. Taiwan and first positioned itself as an automatic test system integrator. IPC221. Europe.com • For Internal Use Only • 5-11 . Middle East & Africa. ICO-200 and ICO-100).

TwinCAT PLC allows up to four virtual “PLC CPUs”. Asia. so that an additional programming device is not required. China Description Beckhoff is a USD 400 million company that is based in Verl. Box: C61xx to C66xx. C33xx and C36xx series). The PLC pr o- 5-12 • Copyright 2010 © ARC Advisory Group• ARCweb. Germany. Beckhoff implements open automation systems based on PC Control technology. Conceived as a pure software PLC. The concept of a black box through software eliminates the advantages of the modularity offered by the technology. I/O and fieldbus components. drive technology.beckhoff. TwinCAT PLC. enabled through scalable technology.com • For Internal Use Only . The product range covers industrial PCs. and automation software. Middle East & Africa. Like all industrial PC suppliers Beckhoff leverages the modularity of the product.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Beckhoff Automation web: http://www. TwinCAT automation software integrates real-time control with PLC. NC. Bus Terminal Controllers (mini PLCs) Regions North America. TwinCAT PLC running under the Windows NT/2000/XP/Vista operating systems includes both the programming environment and the run-time system.de Key Products CX series (Din Rail embedded PCs). Europe. and CNC functions in a single package. standard Industrial PCs (19”Rack: C51xx. each running up to four user tasks on one PC. Beckhoff supplies industrial PCs for control requirements and has a strong focus on building automation. The Beckhoff “New Automation Technology” philosophy stands for universal and open control and automation solutions for a wide variety of applications. but there are still some holes to fill like embedded panel PCs. All Beckhoff controllers are programmed using TwinCAT in accordance with the IEC 61131-3 programming standard. and Panel PCs: CP series. Products are designed to be used as separate components or can be integrated into a control system. Beckhoff offers system solutions in different performance classes.

All of Beckhoff‟s control Panels are in fact no Oper ator Panels in the classical terms.com • For Internal Use Only • 5-13 . black box concept. growth via acquisitions is hardly possible Copyright 2010 © ARC Advisory Group • ARCweb. very focused portfolio. but touch/function key monitors for industrial PCs.Industrial PCs Worldwide Outlook • Supplier Profiles gram can be written in one or more of the languages provided for in the IEC 61131-3 standard. Microsoft. holes in product portfolio. Partnerships and Acquisitions Key Partnerships: Alber Weber GmbH. mer Key Acquisitions: None to report Strengths and Challenges ASF Schir- Top Strengths: Open automation systems based on PC-compatible control technology. The IPC lines C61xx to IPC C66xx include box PCs that are primarily designed to be mounted in a control cabinet. the C51xx. Artis. Top Challenges: Rapid growing competition in the core market from diverse suppliers.a product Beckhoff is famous well known for. which are Din rail embedded PCs . Beckhoff focuses heavily on the building automation market and serves primarily markets that need high degree of openness – therefore less embedded products – and often a larger batches and therefore a larger number of industrial PCs. Many offer modular design to include a individual number of PCI cards. 19”Rack Mount industrial PCs consist of one series. The embedded PC line only includes the CX models.

Middle East & Africa Description BEG Bürkle is a small industrial PC manufacturer located in the area of Stuttgart.com • For Internal Use Only . BEG Bürkle is now changing the focus towards more solution based business. focused on customer needs. While they have a 1 year innovation cycle for chips and processors.Industrial PCs Worldwide Outlook • Supplier Profiles Company: BEG Bürkle Web: http:// www. The ECOline and PROline series are standard rackmount industrial PCs. Around 8300 industrial PCs are manufactured.de Key Products Industrial Box PCs (Femto and Pico line) and Rack Mount IPCs (Ecoline and Proline) Regions Europe. they have a 2 to three year innovation cycle in housing and other parts of the product. The share of custom IPCs is currently at around 80 percent. Bürkle currently employs 60 people and has an annual revenue of approximately USD 14 million. high degree of customization Top challenges: Explore new markets (products and regionally) 5-14 • Copyright 2010 © ARC Advisory Group• ARCweb. The box PC lines (FemtoBox PicoBox NanoBox* CompactBox) are available as embedded and standard industrial PCs. To achieve this they integrate a lot of functionality into a small motherboard to leave room for customization. Partnerships and Acquisitions Key Partnerships: Partnership with panel producers – panel pc available after the study was published Key Acquisitions: None to report Strengths and Challenges Top strengths: Specialized in box IPCs.beg-buerkle. A large share of the PCs delivered are ready to run.

Chassis. Passive Backplanes. that brand label these products.boser. Panel.com. European IPC suppliers. What is important is that BOSER has kept much of it‟s old cusomter. meaning that BOSER is now providing complete IPC to e.g. Copyright 2010 © ARC Advisory Group • ARCweb. China Description Boser was founed in 1986 in Twaiwan and has developed from a supplier of Boards and Singlie board computer to a supplier tht is ISO-9001 and ISO14001 certified and that provides Box. top supplier for IPC products and boards for European/US suppliers. The products included in this study are an Embedded Box(BBS 2xxx and BBS 3xxx series). IN addition to the finished products from the end of the IPC value chain. Power Supplies. Middle East & Africa.tw Key Products Industrial PCs and single board computers Regions North America. Top challenges: Establish own brand. Boser still provides Industrial Single Board Computers. and stan- Key Partnerships: None to report Key Acquisitions: None to report Strengths and Challenges Top strengths: good balance of price and quality.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Boser Web: http://www. and Peripherals. Europe. standard rack mount PCs (BBS 1xxx). Mini PCIs. standard Box PC (series dard Panel PCs (BPC series) Partnerships and Acquisitions BBS 4xxx series). and Rack mount PCs. embedded Panel PCs (BPF series).com • For Internal Use Only • 5-15 . Asia.

For example panel PCs could be purchased with the PC 620 series core.Panel PC 700) Regions North America. which is a key feature throughout any product line. Asia. B&R focuses on automation products for general motion control. China. The standard IPC line also focus‟ on these areas (Box: PC 820 and PC 620. and a network of 155 offices (most of them fully owned subsidiaries) in more than 60 countries. This strategy helps them adapt their automation configurations and provide optimized solutions. One of B&R strength is the modular design.Industrial PCs Worldwide Outlook • Supplier Profiles Company: B&R Web: www. B&R has grown rapidly over the past years. The variety This philosophy is appluied 5-16 • Copyright 2010 © ARC Advisory Group• ARCweb. This focus. B&R manufactures different types of automation controllers with full user software compatibility throughout their range.and Panel: Panel PC 400. Latin America. soft-PLCs. The standard IPC (Box: PC 820 and PC 620. Panel PC 300).Panel PC 700). Besides conventional operator panels B&R offers PLCs. throughout all product portfolios. slot-PLCs. India Description B&R offers a modular control philosophy to create platform independent applications to meet OEM requirements. Europe. resulting in faster support and product development. In the Industrial PC market B&R is part of the top players in terms of revenue and technology. visualization. enables them to support global end users and OEMs. The company claims that private ownership synergizes with their specialized focus and offers an environment for quicker decisions. and a full range of a slice I/O-line. industrial PCs (IPC).and Panel: Panel PC 400.com • For Internal Use Only .com/ Key Products Embedded box PCs (PC620) and embedded panel PCs (Powerpanel 100 and 300 Bios. B&R‟s embedded IPC product line focuses on box (PC620) and panel IPCs (Powerpanel 100 and 300 Bios. and process control for a variety of industries in machine and plant control.br-automation. Panel PC 300).

Industrial PCs Worldwide Outlook • Supplier Profiles based on modular design is a key strength that gives the customer great variety of choice. Continue to achieve growth in regions where large global suppliers command significant market share.com • For Internal Use Only • 5-17 . while maintaining compatibility to protect users‟ software investment. Top challenges: Getting more into field building automation. Partnerships and Acquisitions Partnerships: With automation manufacturers on the open Ethernet Powerlink network technology. Copyright 2010 © ARC Advisory Group • ARCweb. Partnership with ALSTOM for the energy sector and Bombardier for the train sector. Acquisitions: None to report Strengths and Challenges Top strengths: Offering innovative automation solutions by incorporating new technologies.

while Box PCs are available in a greater combination with operating systems. The first category includes analog input/output.com • For Internal Use Only . single board computers. panel computers. Nexcom itself is also offering industrial CP. Nexcom. Contec also offers network and wireless products. The Product portfolio covers measurement and control products and industrial PC products. Lanner. and RMI. Contec has alliances with Intel. flat panel displays.3 billion Yen ($99 Million US Dollar sales) and 670 employees in the financial year that eneded on March 2009. Nexcom. The product portfolio in industrial PCs focuses on fanless and embedded products. digital input/output. and Silicon Disk Drives) Regions Asia. The second category includes box computers. RMI Key Acquisitions: None to report 5-18 • Copyright 2010 © ARC Advisory Group• ARCweb. Multi-Programmable Display. bus expansion systems. and multi-programmable displays. Networks. IPCs (embedded and standard Box and Panel PCs) and other IPC related automation products (Single Board Computers. Flat Panel Displays.contec. Nexcom or Contec. counter & motion controller. to name some examples. Japan Description Contec is based in Osaka.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Contec Web: http://www.com/ Key Products Measurement and Control. RMI provides chip solutions for communication and media and delivers chips to Advantech. but also motherboards and other mezzanines. Contec leverages modular design extensively. Japan and had annual sales of 11. Panel PCs are nearly exclusively offered with Windows CE. Partnerships and Acquisitions Key Partnerships: Intel. and accessories & cables. serial & GPIB communication.

Industrial PCs Worldwide Outlook • Supplier Profiles Strengths and Challenges Top strengths: Established in Japanese Market. enlarge product portfolio. economies of scale for limited products Top challenges: develop solution business. develop more industry and application specific know-how Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only • 5-19 .

the BX-400F. Eurotech offers two distinct products: Nano PCs and High Computing Capacity PCs. Middle East & Africa. The Rack mount standard IPCs include the following products: 5-20 • Copyright 2010 © ARC Advisory Group• ARCweb. but is spread out: 40 percent of revenue derive from business in the US. The focus is still R&D focused and the implementation of the latest technology into industry useable products and the focus is on miniaturization.eurotech. IP networking equipment (switches. and Japan. In 2008 Eurotech earned revenue of USD 135 million (80percent earned with Nano PCs and twenty percent with high performance capaciticy PCs). Products range from highly reliable single board computer (SBC). these are excluded in this study. China.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Eurotech Web: http://www. and 31 percent from Japan. with offices in North America. and wearable PCs. China. and products for security. Europe. Eurotech employed 586 people in 2008.com • For Internal Use Only . and I/O cards to complete rugged mobile computer systems.com/ Key Products Regions North America. Eurotech also offers operator panels based on RISC architecture (VH-50R and VX-50R). routers) and rugged flat panel displays. defence and aerospace markets. Europe. panel computers and monitors. Eurotech focused on growth markets like pervasive computing but also offers products to more established markets like manufacturing. 25 percent from the EU. and the Bx-400F-N270. the Pegasus ICE. The headquarter is in Amaro (Italy). Standard box computers are offered with the VULCAN ICE. and the BX-400P. The product line includes compact and industrial computers. The revenue is not focused geographically on the home market. surveillance applications. The embedded box PC line includes the VIPER ICE. Japan Description Eurotech was founded in 1992 developed into a multinational company with offices in. Eurotech offers standard (VX series) and embedded (ICE-VIEW) panel PCs. networking. Eurotech has comparably little revenue in manufacturing and a traditionally strong focus on transportation. data communications. Asia.

Applied Data Systems Inc.vAdRC-EXP1. Eurotech offers industrial monitors Partnerships and Acquisitions Key Partnerships: None to report Key Acquisitions: In 2007 Eurotech entered into a contract for the acquisition of 65% of the share capital of Advanet (headquartered in Okayama. Kurchatov Research Holdings.com • For Internal Use Only • 5-21 . Remptech Strengths and Challenges Top strengths: deep production depth.. in 2006 Eurotech acquired the Arcom Group. Chemonol. and APC-INDUSTRIAL PC. Next to the IPC line. Japan. APOLLO ICE 1U.Industrial PCs Worldwide Outlook • Supplier Profiles GEMINI ICE 1U. customization Top challenges: strong competitors in the embedded boards and system business (Kontron and Taiwanese suppliers) Copyright 2010 © ARC Advisory Group • ARCweb.

gaming. Microsoft. and Rackmount PCs. and OTC systems. HUAWEI. In 2003. as well as in the field of PC components. EVOC provides embedded products and system-integrated solutions for various applications. Kiosk. GE. medical care. banking. EVOC experienced 15 years of strong growth benefitting from the general growth in the home mare China. Box. SINOPEC.evoc.com/ Key Products Industrial PCs. EVOC is penetrating emerging economies and is trying to get into the market of industrial automation.com • For Internal Use Only . manufacturing and networking. while the embedded PC line only consists of Box PCs. ZTE. PC components and mezzanines. sports. and Lenovo. one of EVOC' s subsidiaries was successfully listed on the Hong Kong Stock Exchange. ZTE. electric power. China Description EVOC Intelligent Technology Co. Ltd.Industrial PCs Worldwide Outlook • Supplier Profiles Company: EVOC Web: http://www. Regions Asia. SINOPEC. Now. GE. EVOC is not focusing in pure price competition. but also invests heavily in R&D to enlarge the revenue share from higher margin segments of the industrial PC market. The Product line of industrial PCs mainly consists of standard IPC. The revenue in 2008 was approximately 175 Mio. telecom. In this movement EVOC became a member of ECA (Intel® Embedded and Communications Alliance) in Mainland China and is also cooperating with Microsoft. The standard IPC line includes a wide range of Panel. was founded in 1993 is a supplier of embedded & industrial computing. such as traffic system. Partnerships and Acquisitions Key Partnerships: Intel. among others. energy. USD. Still the main revenue of EVOC is outside this study scope and is to be found in non-industrial applications. HUAWEI. Lenovo Key Acquisitions: None to report 5-22 • Copyright 2010 © ARC Advisory Group• ARCweb.

Industrial PCs Worldwide Outlook • Supplier Profiles Strengths and Challenges Top strengths: Well established in Asia. especially in China.com • For Internal Use Only • 5-23 . Copyright 2010 © ARC Advisory Group • ARCweb. Top challenges: get established in Europe as a supplier for industrial PCs.

Industrial PCs Worldwide Outlook • Supplier Profiles Company: Flytech Web: http://www.tw/ Key Products Panel PCs K790 and K870. which are not included in this study.flytech.com • For Internal Use Only . Top challenges: get established in other markets beside POS and kiosk 5-24 • Copyright 2010 © ARC Advisory Group• ARCweb.com. line of customized IPCs Regions North America. experienced in IPCs. Asia. on in terms of variations and computing power. The OEM&ODM business from Flytech Flytech OEM / ODM business provides customized hardware and manufacturing for computer based niche products Partnerships and Acquisitions announced the first book size PC-8000 series and expanded this series later Key Partnerships: None to report Key Acquisitions: None to report Strengths and Challenges Top strengths: Established in the POS and kiosk market. POS. China Description Flytech was founded in 1984 and is a Taiwan based supplier for industrial PCs. Flytech systems. The panel PCs K790 and KK870 are included and are both standard panel IPCs. high production depth with own producing facilities. In 2008 its revenue was USD 73 million. and KioskIn 1989. Flytech US was responsible for more than 50 percent of the total revenue. Flytech sells and manufactures industrial PCs. Flytech offers a product range that includes a POS and a kiosk series.

Hitachi IES (known as Hitachi Sanki in Japa- Copyright 2010 © ARC Advisory Group • ARCweb.. Industrial automation and process control products such as drives.com • For Internal Use Only • 5-25 . and power and industrial systems. Ltd.. along with hydroelectric. and thermal power plants. Synergy effects are specifically considered in product policy. the HF-W6500. the HW-W7500RM. Hitachi.2 billion). Hitachi maintains research and development departments in all branches of the company. and the HF-W2000.hitachi. Other products in the industrial segment include compressors. rolling mill equipment. which continually work on the improvement of products and technologies.. Asia.000 billion yen(USD 91. one of the world's leading global manufacturing companies. Hitachi Drive Systems. electronics. Industrial PCs are no key product for Hitachi. nuclear. Ltd. are included in the power and industrial systems division. China Description Hitachi was founded in Japan in 1910 and currently earns total revenue of 10.. was established in April 2002 by the consolidation of the Industrial Components and Equipment Group of Hitachi. information systems. Ltd. and Hitachi Service & Engineering (West). many components for Hitachi products are produced within the company.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Hitachi Web: http://www. about one third (USD 23 billion)is earned with the industrial and power sector. Hitachi is known for its prowess in power plant construction. As a result. DCSs and PLCs. elevators.. Hitachi Industrial Equipment Systems Co. Ltd. as reported in March 2009. Regions North America. field instrumentation. Ltd. especially in the field of nuclear technology.com/ Key Products HF-W series. the HF-W7500. Hitachi‟s medium-term management plan aims at providing total solutions to customers. and chemical plants. Hitachi Service & Engineering (East). manufactures and markets a wide range of products that includes consumer products. Ltd. Hitachi Nakajo Technology.

such as remote monitoring services for factories. the HF-W6500. and the HF-W2000. the HW-W7500RM. The IPC models include the HF-W series. Partnerships and Acquisitions Key Partnerships: Hitachi has a partnership with Fuji Electric Systems on high power motors Key Acquisitions: None to report Strengths and Challenges Top strengths: Power modules and modular design Top challenges: Implementing growth strategies in the face of fierce competition 5-26 • Copyright 2010 © ARC Advisory Group• ARCweb. the HFW7500. and IT. the environment. entertainment.com • For Internal Use Only .Industrial PCs Worldwide Outlook • Supplier Profiles nese) is also targeting new business areas.

com/en Key Products Regions North America. China Description ICP Electronics was founded in 1997 on Taipei. Taiwan and developed quickly to a company with over USD 100 million revenue. strong growth through 2009 Top challenges: moving up in the supply chain Copyright 2010 © ARC Advisory Group • ARCweb. ICP Electronic operates in the electronic manufacturing services industry. ICP Electronics focused on boards. The main business of industrial PC was divided into IEI and ICPEMS. workstations. chips. ICP Electronics has sales channels in almost 100 countries. as well as provides software/firmware development and design assurance services.Industrial PCs Worldwide Outlook • Supplier Profiles Company: ICP Electronics Web: http://www.com • For Internal Use Only • 5-27 .7 million. mechanical. Products offered include motherboards. Their customers are worldwide and even though factories are concentrated across Taiwan and mainland China. LCD Products. chassis.icpems. Asia. From January 2002 to January 2009 the revenue rose from USD 97. ICP conducted re-organization in 2004. power supply. The IEI becomes marketing and branding for the industrial PC business while unique electronic manufacturing service becomes ICPEMS core. mezzanines. and industrial panel PCs. Partnerships and Acquisitions Key Partnerships: None to report Key Acquisitions: None to report Strengths and Challenges Top strengths: Electronic manufacturing services (EMS) for automation suppliers. The company also provides various supply chain management services. panel PCs. and industrial design services. Middle East & Africa. and accessory. It offers electronic.7 million to USD 143. Europe. network.

By 1994. 46 percent in Europe. For many years. As a result of the partnership formed with Thomson CSF at the end of 1995.com • For Internal Use Only . Singapore. Montréal (Canada). the company has been developing its range of products in line with DIN and EN regulations. Taipei (Taiwan). which conform to DIN ISO 9001 accreditation. the company now supplies the largest range of computer products in France. Kontron‟s sales structure is present in approximately 20 countries. Regions North America. Kontron Elektronik sells its industrial computers directly as well as via leading OEM partners. Middle East & Africa. Total revenue in 2008 was around USD 700 million. Moscow(Russia).Industrial PCs Worldwide Outlook • Supplier Profiles Company: Kontron Elektronik Web: http://www. Spain.kontron. Description Founded in 1962 Kontron is headquartered in Eching near Munich (Germany). thereof 43 percent were earned in America. Europe. Roughly a quarter in revenue results from industrial sector. A worldwide consultancy and service network comprising the company's own subsidiaries and technical representatives guarantee proximity to the 5-28 • Copyright 2010 © ARC Advisory Group• ARCweb. Asia. Switzerland. Pittsburgh and San Diego (USA). Kontron Elektronik applies extensive quality assurance measures in the fields of design.500 persons. and the USA. further important locations are Kaufbeuren and Deggendorf (Germany). China. assembly and service. this stabilizes the automation business. production. system houses as well as the company's own sales forces in France. development. and Beijing(China). and the remaining 11 percent in emerging markets.de/ Key Products Industrial PCs. equipment and systems were already being supplied in accordance with the requirements of CE certification. In order to guarantee consistent product quality. the UK. The Kontron Group employs a workforce of over 2. and is listed in the TecDAX 30 Index. During the current crisis Kontron benefits from the business in telecommunications and infrastructure.

All computers are supplied with a 3-year guarantee which ensures safe operation. customization. active in stable markets beside manufacturing. Partnerships and Acquisitions A 7-year product availability period is also Key Partnerships: None to report Key Acquisitions: None to report Strengths and Challenges Top strengths: high production depth. guaranteed.com • For Internal Use Only • 5-29 .Industrial PCs Worldwide Outlook • Supplier Profiles customer. maintain market leadership in the robotic market Copyright 2010 © ARC Advisory Group • ARCweb. premium partner of Intel Top challenges: Taiwanese companies at the chip markets.

At this point of purchase Moeller had an annual revenue of about USD 1. and operator panels. a company owned by Eaton. 5-30 • Copyright 2010 © ARC Advisory Group• ARCweb. The synergy effects are largely in distributing. While Moeller concentrates more on the classical automation. Switzerland. SystemN (Modular IO). 2008 and is now a 100 percent Eaton company. Moeller itself was acquired by Eaton on April 4. Gallen.microinnovation.com • For Internal Use Only . In addition Moeller (Easy Relay) manufactures the Eaton Intelligent controller and the Allen Bradley Pico. SystemY (oparetor panels) Regions North America. In 2001 Micro Innovation had 140employees and annualrevenue of Euro 27 Million. The operator panel line that uses the Eaton / Cutler Hammer brand name ranges from simple text displays to large and sophisticated panels that offer additional functionality. and manufactures industrial PCs. Europe. Middle East & Africa Description Micro Innovation AG is located in St. Modular IOs. The operator panel line from Moeller consists predominantly of smaller operator panels with text and graphical display. While this clear split was announced before Moeller was acquired by Eaton.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Micro Innovation Web: http://www. The Micro Innovation AG was formed in 1990 and 50 percent of the share are owned by Moeller. Micro Innovation is focusing on PC based automation and high end equipment that reflects the merge in automation layers. Moeller and Micro Innovation are working closely together for 15 years. Micro Innovation also represents the solution business. where Eaton in the US and Moeller in Europe. Micro Innovation uses the Moeller distribution channels.com/ Key Products SystemP (industrial PCs).3 million.

com • For Internal Use Only • 5-31 . leverage economies of scale. substantial funding. collaboration with Moeller Top challenges: Turck could get a competitor in the long run. develop a broader portfolio. and the XP700. Partnerships and Acquisitions Key Partnership: Eaton/Moeller. dependency on Moeller Copyright 2010 © ARC Advisory Group • ARCweb. Turck Key Acquisitions: None to report Strengths and Challenges Top strengths: Innovation. small fast growing innovative company.Industrial PCs Worldwide Outlook • Supplier Profiles Micro Innovation benefited strongly from the 2007/2008 boom phase and partly grew with 20 percent per annum. comprehensive product range. The IPC product range consists of XP500 embedded panel PC.

e.Industrial PCs Worldwide Outlook • Supplier Profiles Company: NEC Web: http://www.com • For Internal Use Only . Partnerships and Acquisitions Key Partnerships: Oracle. Description NEC Corporation was founded in 1899 and is based in Tokyo.6 billion. Network Systems. for IO link or consumer electronics. but also products and systems for e.nec. The consolidated net sales for the fiscal year ended March 31 st 2009 were ¥4. They not only offer “silicon” products like Chips. and Electronic Devices. Social Infrastructure. Cisco Systems. Personal Solutions. NEC was heavily affected by the poor overall economic performance of its home market in 2008 and 2009.215. NEC represents a large part of the supply chain in silicon products. EMC².IT Products. Microsoft. hp.g. Even though NEC is a globally oriented company they focus their IPC business in manufacturing nearly primarily on Japan. commercial and industrial Regions Asia. visualization in manufacturing plants.com Key Products PC technology. Japan.g. Foundry Key Acquisitions: None to report Strengths and Challenges Top strengths: high production depth. China. The main operating units of the NEC Group IT Service. focus on silicon. Asian markets Top challenges: price pressure 5-32 • Copyright 2010 © ARC Advisory Group• ARCweb. bea.

HewlettPackard and Dell Computer. PC-based industrial automation hardware products. Nematron has outsourced manufacturing of all its computers to Solectron of Columbia. Nematron was one of the founders of the Industrial PC movement. box (nPC200 Series.and Software for automation. and panel (ePCSeries. Copyright 2010 © ARC Advisory Group • ARCweb. box (nPC200 Series. Nematron products cover a broad spectrum from low-end operator inter-face to Windows based control software. The line of products include standard industrial PCs in various housings: Rack (RM1400). ePC-Plus Series) are available. The company itself shall focus on hardware and software design. SCADA.C. a multi-billion dollar global electronics manufacturing service provider. and panel PCs (ePC-Series. SB600/800 Series). Solectron. India Description Nematron designs and manufactures PC-based industrial automation products that include software for logic control. China. S. process visualization. During the 1990s Nemarton grew strongly and aggressively acquired a couple of companies to form an integrated supplier for Hard. process control and data acquisition. Middle East & Africa. not manufacturing. assembles computers for IBM. Regions North America.nematron. ePC-Plus Series) industrial PCs. Europe. Nematron products are designed for reliability in the harshest operating environments and are easily serviceable using standard tools for minimum downtime. Nematron has also cut a deal with AT Computers in the Czech Republic to make its products under license in Europe. Asia.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Nematron Web: www.com • For Internal Use Only • 5-33 . Nematron designs and manufactures open. SB600/800 Series). Latin America.com Key Products Rack (RM1400).

Industrial PCs Worldwide Outlook • Supplier Profiles Partnerships and Acquisitions Key Partnerships: None to report Key Acquisitions: None to report Strengths and Challenges Top strengths: tradition in PC based control business Top challenges: regaining technological and market strength 5-34 • Copyright 2010 © ARC Advisory Group• ARCweb.com • For Internal Use Only .

com • For Internal Use Only • 5-35 . zener barriers. Rotary Encoders. Their in house manufacturing depth is very high in their core products (Ultrasonic sensors are manufactured in Hungary. inductive are manufactured in Singapore and Indonesia). Industrial Vision. Barcode & Camera Systems. even though they are not representing the major part of revenue. Description Founded in 1945 and privately held. At the time of the acquisition Extec barely had thirty employees and no chance to enter the world market anytime soon. remote IO systems. During the last years their growth was mainly driven by acquisitions. Inductive Proximity Sensors. build most of their own sensors and have own distributor network. Instrinsically safe isolators.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Pepperl + Fuchs Web: http://www. RFID Systems. To compete in the sensor business Pepperl+Fuchs is cutting production costs. Asia. Fieldbus infrastructure. In their factory automation business the main products are: AS-Interface. US to achieve a fast market entry. Regions North America. Middle East & Africa. level measurement.pepperl-fuchs. Pepperl+Fuchs‟ stra tegy is to offer sensing solutions. Sensors for hazardous areas. signal conditioners. Christensen was acquired in late 2008 and is a suppler of industrial monitors.de Key Products Complete set of factory and proximity sensors. China. Capacitive Proximity Sensors. The acquisition of Extec Oesterle GmbH was Pepperl + Fuchs‟ reaction to the merge of automation layers. In this process Pepperl + Fuchs acwuired a company called Extec. and Ultrasonic Proximity. HART interface solutions. 1/3 is created in process automation and 2/3 in factory automation. Photoelectric Sensors. Extec is a supplier of panel PCs and operator panels for explosion areas and was acquired in 2005. Panel PCs are a strategic product. Further penetrating the market for process automation and made panel PCs a key product. Europe. Copyright 2010 © ARC Advisory Group • ARCweb. so they moved to Singapore in 1989 and to Indonesia in 2000. One of the technological leaders. Germany and Christensen Display Products. Pepperl+Fuchs has an overall revenue of around USD 490 Million. visualization.

Key Acquisitions: None to report Omnitron: Pepperl+fuchs added a new product to their portfolio with the acuisition of Omnitron AG: Weg-Codier-System P+F acquired the Intrinsic Safety Instrumentation (ISB) business located in Buehl. focus on explosive areas Top challenges: leverage synergies between process and discrete business. The products included in this study are all standard panel PCs and include the following product series: VisuNet GMP. The products manufactured by ISB – including Remote I/O. this extended the Factory Automation product range by high-end image processing systems. The overall topic of intrinsically safe and Ex area automation is strong within Pepperl + Fuchs. a division of Cooper Industries. Partnerships and Acquisitions Key Partnerships: Partnerships: Partnership with GE Fanuc Automation. from Cooper Crouse-Hinds. leverage synergies between acquired companies.com • For Internal Use Only . Din Rail devices and Zener-Barriers components VMT Vision Machine Technology: Supporting growth. P+F took over VMT Vision Machine Technic Bildverarbeitungssysteme GmbH located in Weinheim. The partnership includes the delivery of Schnittstellen-Komponenten and focuses on Profibus technology. robot guidance and machine vision. Panel PC VISUEX. VMT GmbH supplies turnkey solutions for the field of robot vision. Germany.Industrial PCs Worldwide Outlook • Supplier Profiles Pepperl + Fuchs is leveraging it sales network to provide Panel PCs worldwide. in the year 2006. enlarge IPC business from explosive areas to other control applications 5-36 • Copyright 2010 © ARC Advisory Group• ARCweb. VisuNet. Strengths and Challenges Top strengths: strong positioned in process industries and discrete industries. IPC-Ex.

Partnerships and Acquisitions Key Partnerships: Strategic alliances with Intel.0 in 2008) and continued through 2009. Lanner‟s business model is to supply intermediate products to IPC and operator panel manufacturers. The company was formerly known as GES Taiwan and changed its name to Lanner Electronics Inc.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Lanner Web: http://www.. In this market research only the embedded and industrial computing products. and US. Asia. 56. ODM for other IPC suppliers. Lanner Electronics Inc. including fanless computers. Cavium Networks. 63. China. and embedded and industrial motherboards is excluded in this study. It also provides ODM services. Storage Bridge Bay Working Group (SBB).Ltd. network processor platforms. and technical support services As products the company offers network application platforms (including x86 network appliances).0 in 2005). industrial control systems are included.com Key Products EM. and network accessories. was founded in 1986 and is a publicly listed company based in Taiwan and has additional offices in mainland China.and LEC-series. Description Lanner Electronics Inc. 38. Beijing L&S Lancom Platform Tech. and Stretch Inc.2 in 2006.ad. Key Acquisitions: None to report Copyright 2010 © ARC Advisory Group • ARCweb.com • For Internal Use Only • 5-37 . Microsoft. intermediate PC products Regions North America. Lanner faced a decline in revenue that started in 2008 (revenue in million USD: 29. which include engineering and manufacturing services. custom design and manufacturing services. 6WIND. is a designer and manufacturer of frontline network security. network video and embedded computing platforms.Co. Lanner‟s line of slot cards.siemens. SBC backplanes.5 in 2007. in 1993. RMI Corporation.

Industrial PCs Worldwide Outlook • Supplier Profiles Strengths and Challenges Top strengths: located in the Taiwan clusters. well connected within the PC manufacturer community Top challenges: getting established as a supplier of products. bridge between supplying IPC suppliers and concurring with them.com • For Internal Use Only . 5-38 • Copyright 2010 © ARC Advisory Group• ARCweb.

Allen-Bradley and Rockwell Software.com/ Key Products Embedded box and panel IPCs. Wisconsin. micro PLCs (MicroLogix and CompactLogix). Latin America. large PLCs (ControlLogix and PLC). and rack mount IPCs. standard panel. systems. Rockwell Automation has two major product lines. around 50 percent of the company‟s total revenue is now coming from their non-US operations.rockwellautomation. In addition. services. and PanelView series of operator panels Regions North America. box. Through a global transformation of its business processes and the underlying information systems that support them. The company focuses on addressing customers‟ business needs to form automation solutions through partne rships with a large network of local companies in distribution. and services in North America. Middle East & Africa. With headquarters in Milwaukee. China. Asia. SoftLogix5800 Controller Complete line of PLC products: Nano PLCs (Pico controller). The Operator Panel series PanelView uses the Allen Bradley Brand name. Rockwell Automation continues to maintain its position as the leading supplier of industrial automation equipment. India Description Rockwell Automation is a leading global provider of industrial automation control and information solutions that help manufacturers achieve a competitive advantage in their businesses.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Rockwell Automation Web: http://www. and software around the world. intelligent motor control and global manufacturing support services. Europe.com • For Internal Use Only • 5-39 . Having a strong financial position. small PLCs (ControlLogix and SLC 500). which offer automation solutions that include control and information platforms. Rockwell Automation continues to acquire expertise and invest in innovation and aggressive research and development. the company has simplified and increased collaboration to better serve its customers and Copyright 2010 © ARC Advisory Group • ARCweb. industrial components.

Rockwell Automation offers the complete range of PLCs. since they are often sold in a bundle. and mounting hardware. 6180P Integrated Keypad is and embedded panel PC that either functions as an operator panel or an IPC. which is a standard box IPC with Windows XP Professional in combination with the 6186M monitor to create a panel and box application for hazardous locations. SoftLogix5800 Controller is also an IPC that developed from Rockwell Automation‟s PAC line. The PanelView Plus CE series adds the open platform flexibility of Microsoft Windows and is an Automation Panel. 6177R models 650R and 750R is also a standard box PC. which additionally offers the option to be used as a server. 6177R model 1450R is a rack mount standard IPC. motion. the PanelView Plus series adds functionality to the „e‟ and standard series.Industrial PCs Worldwide Outlook • Supplier Profiles achieve its growth goals. and process control systems. The ViewAnyWare visualization software could also enable the PAC to be used for visualization. Rockwell offers the 6181H. The complete PLC line pushes the Operator Panel business. which is classified as a Programmable Automation Controller (PAC). drives. Combining Rockwell A utomation hardware with its software assures comprehensive application support from an industry leader. The company‟s long-term strategies include providing business-driven solutions. The complete Rockwell Automation advantage includes seamless integration with the full suite of Rockwell Software solutions. The PanelView Standard operator terminals offer the classic operate and monitor functionality. and a performancedriven culture to solve customer challenges. IT is classified here as an embedded panel PC. Six Sigma practices. The Logix control platform. 6181 P/F (performance and standard option) are standard panel IPCs and are both using Windows XP Professional as an operatong system. Rockwell Automation offers a large line of accessories that include monitors. including Integrated Architecture™ and FactoryTalk® View software. provides a single control platform for discrete. 6155R/6155F 200R is a box PC that has the option to be Din Rail mounted and also embedded. PanelView 'e' Operator Terminals are graphic Operator Panels. 5-40 • Copyright 2010 © ARC Advisory Group• ARCweb. industrial keyboards and mice.com • For Internal Use Only .

(process industry solutions). En- dress+Hauser. IBM.. utility. and food and beverage sectors.. Tesch GmbH (saf ety relays). Interwave Technology. Weidmüller. Key Acquisitions: Xi'An Hengsheng Science & Technology Company Limited. Pavilion Technologies (model predictive control).. CEDES' Safety and Automation Business. Inc.Industrial PCs Worldwide Outlook • Supplier Profiles Partnerships and Acquisitions Key Partnerships: OSIsoft. Samsung. an engineering company with expertise in industrial automation. Xi'An Hengsheng Science & Technology delivers automation solutions to the electrical power and other heavy process industries in China. the controller business of Samsung‟s Mechatronics division. The acquisition accelerates the growth in Canada‟s heavy industries and oil and gas market. in addition to the pipeline. batch software business of Sequencia (RPM Series). Entek IRD (condition monitoring). Relationships with Intel. Copyright 2010 © ARC Advisory Group • ARCweb. forestry. and strengthens global project management and engineering solutions delivery capabilities. Incuity Software. Omron. (Enterprise Manufacturing Intelligence (EMI) software). Datasweep and Propack Data (manufacturing solution software). Moeller. process control and power distribution.com • For Internal Use Only • 5-41 . enhances Canadian oil sands opportunities. Logix PAC platform. and Cisco for collaborative manufacturing solutions. mining. ICS Triplex (process safety. SMC (shop floor scheduling and simulation). PowerAutomation GmbH. a privately held engineering firm. good strategic focus and aggressive execution of strategies Top challenges: Penetrating the European market. Rockwell Automation recently acquired Rutter Hinz Inc. Strengths and Challenges Top strengths: Broad range of products. ISaGRAF). ProsCon Holdings Ltd. EJA (safety products). specifically for the Oil & Gas industry.

Digital Electronics. where Schneider Electric has been the first mover with Ethernet for communications fieldbus as widely implemented 5-42 • Copyright 2010 © ARC Advisory Group• ARCweb. Schneider Electric‟s bias toward open technology choices is evident in the industrial communications area.com/ Key Products- Schneider Electric Brand Name Pro-Face Brand Name: Digital Electronics brand name: Regions North America. Asia. In that respect. Schneider Electric continues to invest in its automation business. China. Europe. Schneider Electric will marshal its resources to help enable customers to reduce engineering costs. and products that use the Schneider electric Brand name. increase flexibility.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Schneider Electric Web: http://www. Schneider Electric has developed collaborative automation as a differentiating value since the early 1990s. Since Schneider Electric invented the PLC in the late 1960s (Modicon). India Description The revenue and products reported here include the products from telemecanique.schneider-electric. Middle East & Africa. Schneider Electric organizes its automation business to assure focus on its customer‟s business success. and safety.com • For Internal Use Only . the company has constantly improved its breadth and depth of experience and know-how across a wide spectrum of industrial applications and markets in countries all around the world. Latin America. Schneider Electric claims that this differentiating value rests on a foundation of innovation and open technology choices and on the active collaboration with partners and system integrators. Pro-face. increase real-time operating efficiency. and continuously improve productivity. Schneider has a strong corporate geographic balance to support its long history of success and concentration in the industrial automation market.

modbus.7 percent of all shares since December 31 st 2003. Still ProFace is internally more focused on panels than on industrial PCs. Telemecanique. Japan was founded in 1972 as digital Electron Corporation and named itself digital Electronics since 1973. ELAU Copyright 2010 © ARC Advisory Group • ARCweb. Crouzet Automatismes. Soon thereafter. TAC AB (building automation systems). Since 2002 Schneider Electric controls this company and owns 98.com • For Internal Use Only • 5-43 . Pelco. Operator Panels with the Pro-Face brand name are produced in Wuxi. Square D. Gira for Building Automation. ProFace was the first company on the market with operator panels and has been the market leader for a long time. The magelis IPC series from Schneider is reduced to some core products. Kavlico (Sensors). Tatung. Xycom is also a part of Digital Electronics and after the acquisition adopted the Pro-face brand name. In addition to the Panel PCs. Elektropøístroj Písek (Czech). Clipsal Industries.org). Brooks Automation (semiconductor wafer fabrication solutions). Merlin Gerin. Schneider Electric also offers a Box PC (Control box 102 and 402) that could be used as a stand alone PC. SIG-Positec & Berger Lahr (stepper motors). The smart box is an embedded box PC and the Flex PC BOX allows to include PCI cards and is also available in a heavy duty model. SIG-Positec (Swiss). China. which are also part of its portfolio. Key Acquisitions: Intelligent Motion Systems (IMS).Industrial PCs Worldwide Outlook • Supplier Profiles through Modbus/TCP. production management software). Modicon. Schneider Electric also carefully handles the migration path for Schneider Electric automation and control products and solutions among existing Schneider Electric customers. Citect (HMI/SCADA. Digital Electronics employs over 1100 people and has estimated annual revenue of USD 280 Mio. Modbus was released as a public standard (www. Nu-Lec. or be combined with a screen to a modular panel PC. Toshiba. Partnerships and Acquisitions Key Partnerships: Sun Microsystems. especially Panel PCs. Schneider Electric has created automation competency centers and project execution centers across the world to more easily deliver automation design and delivery resources with deep know-how about specific industry segments for its customers. Digital Electronics Osaka. With a strong solutions orientation as the guiding principle.

Digital Electronics (Japan). Crompton Greaves (India). HMI/SCADA.Industrial PCs Worldwide Outlook • Supplier Profiles (packaging machinery controls). PLCs. Samwha SEOCR (Korea).com • For Internal Use Only . Andover Controls (Building Automation Systems). Conlog (South Africa). Lexel Concern (electric installation material). a large range of products in power & control for large infrastructure sites Top challenges: Sustain global expansion in the presence of other strong automation suppliers 5-44 • Copyright 2010 © ARC Advisory Group• ARCweb. drives. sensors. Strengths and Challenges Top strengths: Global company with local and distribution channel focus and a broad range of automation products. „One Stop Shopping‟ for factory automation such as relays. VA TECH ELIN EBG (Austria).

The Siemens Industry Sector (Erlangen. Drive Technologies. and embedded Panel PCs: SIMATIC HMI IPC477C). China. ET 200. WinAC. With integrated automation technologies as well as comprehensive industry-specific solutions.3 bil lion and a net income of €5. design and install systems and projects. Industry Solutions. standard IPCs (Rack Mount: SIMATIC IPC547C. India Description Siemens AG (Berlin and Munich) is a global provider of electronics and electrical engineering. With around 222. efficiency and flexibility of its customers in the fields of industry and infrastructure. Siemens had revenue of €77. Siemens has long been is the leading PLC supplier worldwide. SIMATIC Box PC 827B.86 billion with revenues totaling EUR 38 billion. Latin America. The combination of an extensive product range in PLCs and IPCs puts Siemens in the position to offer both technologies as being complementary without loosing any customer. Mobility and Osram. Industry Automation. WinCC. The company has around 430. Siemens addresses the productivity. Asia.000 employees (in continuing operations) working to develop and manufacture products.Industrial PCs Worldwide Outlook • Supplier Profiles Company: Siemens Web: http://www.com • For Internal Use Only • 5-45 . SIMATIC IT. Europe. and SIMATIC Rack PC 847B . energy and healthcare sectors.ad. building and lighting technologies.siemens.9 billion (IFRS). combined with a comprehensive range Copyright 2010 © ARC Advisory Group • ARCweb. SIMATIC Rack PC 647B. LOGO! Regions North America. and tailor a wide range of solutions for individual requirements. Middle East & Africa. Siemens‟ sheer size. SIMATIC family: S7. transportation. and Panel: SIMATIC Panel PC 577B and SIMATIC Panel PC 677B series). The Sector consists of six Divisions: Building Technologies. operating in the industry. Box: SIMATIC Box PC 627B.com Key Products Embedded PCs (Embedded Box PCs: SIMATIC IPC427C. PCS 7. Germany) is the worldwide leading supplier of production. In fiscal 2008.000 employees worldwide Siemens Industry posted in fiscal year 2008 a profit of EUR 3.

Fuji Electric Key Acquisitions: Flender. and Panel: SIMATIC Panel PC 577B and SIMATIC Panel PC 677B series). Moore Products. Milltronics. standard IPCs (Rack Mount: SIMATIC IPC547C. Siemens provides a line of embedded PCs (Embedded Box PCs: SIMATIC IPC427C. The key concept behind this is called TIA: Totally Integrated Automation. financially secure supplier for all electrical products including automation. Siemens‟ strategy is to offer customers the benefits of dealing with a single. an array of low voltage products and peripheral products. Box: SIMATIC Box PC 627B. and motors. Orsi. drives. drives. including controllers. Robicon. To keep this concept up to date Siemens acquired the software companies UGS and Innotec. Flow Division of Danfoss. Siemens‟ Industry sector is responsible for the design and production of a wide range of automation products. The so called Board Support Package for example includes functionality to use SIMATIC IPCs as PROFINET IO controllers or PROFINET device by means of a CP 1616-compatible call interface. VATech. One of they key advantages is the modular design that Siemens leverages to provide custom solutions in small batches.com • For Internal Use Only . control gear. Siemens automation panels (Multi Panels) are very open and merging in capabilities with embedded Panel PCs. and software ranging from configuration and programming to PLM systems. Partnerships and Acquisitions Key Partnerships: Yaskawa. industrial PCs. The real Time Operating System is called RMOS3 and Siemens also offers a solution package for automation purpose that expands RMOS3 with additional functionality to fit machine builders and end users demand. US Filter. SIMATIC Box PC 827B. switchgear. In contrast to many other suppliers Siemens offers decentralized architecture as a product (those products are therefore also Panel PCs). and embedded Panel PCs: SIMATIC HMI IPC477C). In addition to the extensive line of industrial PCs. UGS.Industrial PCs Worldwide Outlook • Supplier Profiles of products and solutions. Operator Panels. Innotec 5-46 • Copyright 2010 © ARC Advisory Group• ARCweb. Siemens is providing operator and automation panels. SIMATIC Rack PC 647B. and SIMATIC Rack PC 847B . provides Siemens with a unique competitive position.

India. such as India and China Top challenges: Maintain a strong position in fast growing markets such as China.com • For Internal Use Only • 5-47 . a strong identity as a discrete controls company with a growing presence in process automation.Industrial PCs Worldwide Outlook • Supplier Profiles Strengths and Challenges Top strengths: Broad automation portfolio. and a significant presence in fast growing markets. and Russia Copyright 2010 © ARC Advisory Group • ARCweb.

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We systematically study each market segment before developing specific recommendations for our clients. and job shop.Appendix A Appendix A: Methodology Over the past two decades. Our extensive network of industry contacts has been an invaluable asset in filtering out long-term trends from fads. To meet the growing need for global market intelligence.com • For Internal Use Only • A-1 . ARC consultants attend the most important trade shows around the world. ARC uses a five step approach to conduct global market research for the industrial automation marketplace. including sensors. You can be assured that we give all areas of the study a considerable amount of time and thought before moving on to the next step. plant visits. ARC Advisory Group has become the leader in providing in-depth and accurate market intelligence for the industrial automation marketplace. ARC’s research database is based on thousands of user surveys. and in-depth profiles of hundreds of suppliers and users. discrete repetitive. telephone interviews. Copyright 2009 © ARC Advisory Group • ARCweb. This approach provides our staff with a solid framework to formulate meaningful strategies for our clients. control systems. From the beginning. ARC consultants follow technology and industry events on a daily basis. ARC consultants attend press conferences held by most major suppliers and review hundreds of news releases each year. batch. networks. and services. We are experienced in working with all types of manufacturing processes including continuous. software. In addition. The following contains a brief description of how we conduct each of these five steps. we have recently expanded our services to cover the international marketplace. Each year. We have continuously strived to refine and improve our vision of future plant automation systems. ARC consultants then sort out real and long lasting trends in the marketplace. computers. and have a broad range of expertise in all areas of industrial automation. Our consultants are skilled in analyzing and forecasting the impact of new technology and products on plant automation systems. our corporate goal has been total client satisfaction.

We also request the following financial reports when needed: Annual reports A-2 • Copyright 2009 © ARC Advisory Group • ARCweb.com • For Internal Use Only . The database includes the following information on several thousand companies: Annual Reports 10K and other Financial Reports Client Lists Price Lists Published Secondary Data on Companies and Products Market Size and Forecast Data Market and Technology Trend Data Literature Search and Review ARC subscribes to over 150 magazines and newspapers covering a wide range of topics relevant to the industrial automation community. application notes. and price lists from all known or potential manufacturers and suppliers of products pertinent to a study. ARC Database ARC maintains a proprietary database on the industrial automation marketplace. data sheets. as well as an extensive library of directories and books. Key secondary sources researched include the following.Appendix A Step 1: Client Inputs and Secondary Search ARC started this project by inviting inputs from our primary clients and researching all secondary sources of information. catalogs. We research and analyze our in-house database and the prominent publications relevant to this study to identify: Issues of interest pertaining to the study Product and technology trends in the industry Changing user needs Manufacturer's products and key individuals within the study's scope Sales and Financial Literature Requests ARC requests capability brochures. This database provides our staff with a solid base to start their research project. We sort and file important news and articles for future use. We are on the news and product release mailing lists of every key user and supplier in the marketplace today.

ARC developed a list of key issues concerning both users and suppliers. we interviewed more than one person at each company to verify the accuracy of the information. Some highlights of the information that is included in these profiles are: Plant automation budget of the company and how it is likely to change over the next five years.Appendix A 10K statements Prospectus and investment analyses Our studies evolve rather than being forced. Step 2: Identify Key Issues After discussions with clients and a careful review of all secondary information. Step 3: Gather Primary Data Supplier Survey and Interviews First. Copyright 2009 © ARC Advisory Group • ARCweb. In terms of elapsed time. Open systems implementation plans and preferences of the company. We interviewed individuals typically engaged in one of the following functions at these companies: Product management Marketing management Product planning Sales management Automation Profiles of the Leading Edge OEMs and Manufacturing Companies ARC has compiled automation profiles of the leading edge OEMs and manufacturing companies. we conducted a top down analysis of the leading suppliers' products and various businesses in order to get a better understanding of the global business environment. We also capitalized on information contained in our previous market research reports and seminars on process control. Then we conducted telephone interviews with key individuals at all major suppliers. Where possible or necessary. up-to-date. ARC spent several weeks discussing issues pertinent to this study with the leading suppliers. This assures you that the results are accurate.com • For Internal Use Only • A-3 . and meaningful.

Our experienced staff conducts all interviews . sensors.not someone with absolutely no knowledge of the industry. sorted and cross-tabulated in numerous ways to filter out industry trends and answers to the key issues identified earlier. We spent a considerable amount of time and effort to draw conclusions and sort out long-term trends from fads.Appendix A What the top automation priorities are for the company and what portion of the budget is likely to be spent on control systems. computers. The data was verified. Finally. we developed recommendations for the industry participants. The ARC staff has firsthand industry knowledge and experience. After analyzing all market data. Our staff's average level of industry experience is over twenty years.com • For Internal Use Only . Benefits of ARC's Methodology Key benefits of ARC's methodology in conducting market research are: This is a proven approach and is designed specifically to conduct global market research for the industrial automation marketplace. We encourage independent thinking by our staff members. we prepared preliminary market forecasts. after we considered many different strategic alternatives. Step 4: Data Analysis We organized and entered all gathered data into a computer database. we considered many alternative scenarios and tested them against some key criteria. and systems integration. ARC actively solicits inputs from suppliers and users throughout the duration of a project. Enterprise-wide integration plans and strategies of the company by geographic region. software. A-4 • Copyright 2009 © ARC Advisory Group • ARCweb. Finally. computers and software. Step 5: Prepare Final Report After finalizing market forecasts. Our staff members do all our research work. we chose the most accurate scenario. At this time. we drew charts and graphs to get further insight into user needs and wants. Company preferences for different types of control systems.

We can complete each task very efficiently through our use of automated resources.Appendix A We can identify key individuals for interviews quickly and accurately through our extensive network of industry contacts and data base.com • For Internal Use Only • A-5 . Copyright 2009 © ARC Advisory Group • ARCweb.

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Tobacco.com • For Internal Use Only • B-1 .Appendix B Appendix B: Common Industry Abbreviations 3PL 3PP 3PS 4GL A/D ABC ACM ActiveX ADR AEC AEGIS AERS AGC AGV AI AIM ALM AnIML ANSI APC APEC API API APM APO Applet APQP APS AS/RS ASIC ASM ASN ASP ATA ATF ATP 3rd Party Logistic 3rd Party Parts Provider 3rd Party Service Provider Fourth Generation Language Analog-to-Digital Activity Based Costing Abnormal Condition Management Object-Oriented programming language for Internet Automatic Device Replacement Architect. & Firearms Available-to-Promise Copyright 2009 © ARC Advisory Group • ARCweb. Engineer & Constructor Firm Abnormal Event Guidance Information System Adverse Event Reporting System Automatic Guidance Control Automated Guided Vehicle Artificial Intelligence Asset Information Management Asset Lifecycle Management Analytical Information Markup Language American National Standards Institute Advanced Process Control Asia-Pacific Economic Cooperation Active Pharmaceutical Ingredient Application Program Interface Analytics and Performance Management Advanced Planning & Optimization Small Software Application or Component Advanced Product Quality Planning Advanced Planning & Scheduling Automatic Storage & Retrieval System Application Specific Integrated Circuit Abnormal Situation Management Advanced Ship Notice Application Service Provider OR Average Selling Price American Trucking Association Alcohol.

Own. Read Only Memory Committee Draft Vote B-2 • Copyright 2009 © ARC Advisory Group • ARCweb.Appendix B AVL B2B B2C B2MML BAPI BAS BI BOD BOL BOM BOOT BPA BPE BPEL4WS BPM BPO BPR BPS BTF BTO C++ CAD CAGR CALM CAM CAN CapEx CAPA CAPP CAS CASE CBM CBP CCM CDAS CDDI CDM CDSCO CD-ROM CDV Approved Vendor List Business-to-Business Business-to-Consumer Business-to-Manufacturing Markup Language Business Object APIs Building Automation System Business Intelligence Business Object Document (OAGi) Bill of Lading Bill of Material Build.com • For Internal Use Only . Transfer Business Process Automation Business Process Engineering Business Process Execution Language for Web Services Business Process Management Business Process Outsourcing Business Process Reengineering Best Practice Sharing Build to Forecast Build to Order Object Oriented Programming Language Computer Aided Design Compound Annual Growth Rate Collaborative Asset Lifecycle Management Computer Aided Manufacturing Controller Area Network Capital Expenditure Corrective and Preventative Action Computer Aided Process Planning Collaborative Automation System Computer Aided Software Engineering Condition-Based Maintenance Customs and Border Protection Critical Condition Management Collaborative Discrete Automation System Copper Distributed Data Interchange Clinical Data Management India’s Central Drugs Standard Control Organization Compact Disk. Operate.

Forecasting. & Replenishment Consumer Packaged Goods Chemical Process Industry OR Continuous Process Improvement Collaborative Production Management Collaborative Partner Network Collaborative Planning & Scheduling Central Processing Unit Contract Research Manufacturing Services Customer Relationship Management Contract Research Organization Cross-Media Electronic Reporting & Record-keeping Ruling Copyright 2009 © ARC Advisory Group • ARCweb. Integration. Optimization Control & Information Protocol OR Common Industrial Protocol Complex Instruction Set Computing Collaborative Logistics Network Common Language Runtime Condition Monitoring Cell Monitoring & Control Collaborative Manufacturing Management Computerized Maintenance Management Systems Contract Manufacturing Organization Carrier Managed Shipment Computer Numerical Control Component Object Model OR Collaborative Operations Management Software Object containing Data and Method Common Object Request Broker Architecture Common Open Software Environment Commercial Off-the-Shelf Center for Process Analytical Chemistry Collaborative Process Automation System Collaborative Planning.Appendix B CEMS CENELEC CEO CFM CFO CFR cGMP CIDX CIM CIO C-I-O CIP CISC CLN CLR CM CM&C CMM CMMS CMO CMS CNC COM Component CORBA COSE COTS CPAC CPAS CPFR CPG CPI CPM CPN CPS CPU CRAMS CRM CRO CROMERRR Continuous Emissions Monitoring System Committée de European de Normalization Electrotechnique Chief Executive Officer Continuous Flow Manufacturing Chief Financial Officer Code of Federal Regulations Current Good Manufacturing Practices Chemical Industry Data Exchange Computer Integrated Manufacturing Chief Information Officer Collaboration.com • For Internal Use Only • B-3 .

Improve. Measure. Department of Defense Design of Experiments U. Analyze.com • For Internal Use Only . Department of Energy Desktop Office Integration Disk Operating System Differential Pressure OR Demand Planning Data Quality Management Dynamic Random Access Memory Distribution Resource Planning Direct Store Delivery Digital Signal Processor OR Digital Signal Processing Decision Support System Direct Sequence Spread Spectrum Document Type Definition B-4 • Copyright 2009 © ARC Advisory Group • ARCweb. Control Microsoft's Distributed iNternet Architecture Domain Name Service U.Appendix B CRP CSA CSI CTMS CTO CTP CTPAT CVN DAS DC DCE DCOM DCS DD DDE DDL DE DES DFM DHCP DIN DLL DM DMAIC DNA DNS DOD DOE DOE DOI DOS DP DQM DRAM DRP DSD DSP DSS DSSS DTD Capacity Requirements Planning Canadian Standards Association Current Source Inverter OR Container Security Initiative Clinical Trials Management System Chief Technical Officer Capable-to-Promise Customs-Trade Partnership Against Terrorism Collaborative Value Network Data Acquisition System Distribution Center Distributed Computing Environment Distributed Component Object Model Distributed Control System Device Description Dynamic Data Exchange Device Description Language Digitally Enhanced Discrete Event Simulation Design for Manufacturing Dynamic Host Configuration Protocol Deutsches Institut Normung Dynamic Link Library Demand Management Define.S.S.

Procure. and Construct Electric Power Research Institute Electronic Records & Electronic Signatures Enterprise Resource Planning Emergency Shut Down System European Union Economic Value Added Food Bio-security Action Team Function Block Diagram Fixed Broadband Wireless Access U.S.Appendix B DTM DVD EAI EAM EBIT EBR EC ECM ECN ECO ECR eCRM EDD EDDL EDI EDM EEMUA EFSA EI EJB EL ELV EMEA EMEA EMI EMS EOS EPA EPC EPRI ERES ERP ESD EU EVA FBAT FBD FBWA FCC FCS Device Type Manager Digital Versatile Disc Enterprise Application Integration Enterprise Asset Management Earning Before Interest & Taxes Electronic Batch Record Electronic Commerce OR European Commission Electronic Content Management Engineering Change Notice Engineering Change Order Efficient Consumer Response OR Engineering Change Request Electronic Customer Relationship Management Electronic Device Description Electronic Device Description Language Electronic Data Interchange Electronic Data Management OR Electrical Discharge Machine Engineering Equipment & Material Users Associations European Food Safety Authority Enterprise Integration Enterprise Java Beans Electroluminescence End of Life Vehicle European Medicines Agency Europe. Africa Electro Magnetic Interference Energy Management System Economy of Scale U. Middle East. Federal Communications Commission Field Control System Copyright 2009 © ARC Advisory Group • ARCweb.com • For Internal Use Only • B-5 .S. Environmental Protection Agency Electronic Product Code OR Engineer.

Appendix B FDA FDC FDDI FDR FDT FF FFB FHSS FIP FMEA FMP FMS FSAT FSEM FTC FTP GAMP GC GCI GCP GDP GDS GEMS GERM GIS GLN GLS GMC GMP GOSIP GP GPS GSM GTIN GTM GUI HACCP HAL HART HAZOP U. Food & Drug Administration Factory Data Collection OR Fault Detection and Classification Fiber Distributed Data Interchange Faulty Device Replacement Field Device Tool Fieldbus Foundation Flexible Function Block Frequency-hopping Spread Spectrum Factory Instrumentation Protocol Failure Mode & Effect Analysis Flexible Manufacturing Plant Factory Management System OR Factory Message Specification Field System Assessment Tool Field System Evaluation Matrix Federal Trade Commission File Transfer Protocol Good Automated Manufacturing Practices Gas Chromatography Green Chemistry Institute Good Clinical Practices Gross Domestic Product Global Data Synchronization Global Enterprisewide Management System Good Electronic Records Management Geographic Information Services Global Location Number Global Logistics Systems General Motion Control Good Manufacturing Practice Government Systems Interconnect Protocol Gauge Pressure Global Positioning System Global System for Mobile Global Trade Item Number Global Trade Management Graphical User Interface Hazard Analysis Critical Control Point Hardware Abstraction Layer Highway Addressable Remote Transducer Hazard & Operability B-6 • Copyright 2009 © ARC Advisory Group • ARCweb.S.com • For Internal Use Only .

and Automation Society Industrial Scientific & Medical OR Industrial Scientific & Medical RF Bands International Standards Organization InterOperable Systems Project Independent Software Vendor Information Technology International Traffic in Arms Reglations Enterprise Asset Management for Information Technology Information Technology & Remote Asset Management Java 2 Enterprise Edition Object-Oriented programming language for Internet Java Control & Automation Framework Japan Electric Industry Development Association Copyright 2009 © ARC Advisory Group • ARCweb. Ventilating.com • For Internal Use Only • B-7 . Systems.Appendix B HCF HDLC HIPAA HIPPS HMI HPI HR HSE HTML HTS HTTP HVAC I/O IA IC ICH IDE IDEA IEC IEEE IQ IVRS IOp IP IPO IR IRT ISA ISM ISO ISP ISV IT ITAR ITEAM ITRAM J2EE JAVA JCAF JEIDA HART Communication Foundation High Level Data Link Control Health Insurance Portability & Accountability Act High Integrity Pressure Protection System Human Machine Interface Hydrocarbon Processing Industry Human Resources High Speed Ethernet HyperText Markup Language Harmonized Tariff Schedule HyperText Transport Protocol Heating. Air Conditioning Input/Output Industrial Automation Integrated Circuit International Conference on Harmonisation Integrated Development Environment Industry Data Exchange International Electrotechnical Commission Institute for Electrical & Electronic Engineers Installation Qualification Interactive Voice Response System Interoperability Internet Protocol OR Intellectual Property Initial Public Offer Infrared Isochronous Real-time Instrumentation.

com • For Internal Use Only . First Out Laboratory Information Management System Line of Business Letter of Credit Large Scale Integration Logistics Service Provider Less Than Truckload Logistics Visibility and Control Mergers & Acquisitions Machine-to-Machine Medium Access Control Mobilized Asset Management Metropolitan Area Network Mobile Broadband Wireless Access Mean Cycles Before Failure Micro-Electro-Mechanical Systems Manufacturing Execution System Material Handling Control System Management Information Base Machinery Information Management Open Systems Alliance Millions of Instructions Per Second Management Information System Multi-Loop Controller Manufacturing Message Specification Management of Change B-8 • Copyright 2009 © ARC Advisory Group • ARCweb.Appendix B JEIF JEMA JEMIMA JISC JIT JV JVM KCM KPI LAN LAS LCD LCL LD LES LIFO LIMS LOB LOC LSI LSP LTL LVC M&A M2M MAC MAM MAN MBWA MCBF MEMS MES MHCS MIB MIMOSA MIPS MIS MLC MMS MOC Japan Electrical Industrial Federation Japan Electrical Manufacturers’ Association Japan Electrical Measuring Instruments Manufacturers’ Association Japanese Industrial Standards Committee Just-in-Time Joint Venture Java Virtual Machine Knowledge and Content Management Key Performance Indicator Local Area Network Link Active Scheduling Liquid Crystal Display Less than Container Load Ladder Diagram Logistics Execution System Last In.

Repair & Operations Manufacturing Resource Planning OR Materials Resource Planning Material Safety Data Sheets Multivariate Statistical Process Control Mean Time Between Failure Mean Time Before Repair Make to Order Mean Time to Repair Multivariable Predictive Control Machine Vision System National Boards of Pharmacy (US) North American Free Trade Association North American Industry Classification System Normal Ausschultz Fur Messung Und Regelung Network Computer (Internet) OR Numerical Control Non Conformance Report National Electrical Manufacturers’ Association New Sampling Sensor Initiative National Highway Transportation Safety Authority National Institute of Standards and Technology Neural Network New Product Development & Introduction National Science Foundation Open Applications Group. Open Applications Group Integration Specification Organization for Advancement of Structured Information Standards Open Control System OLE Custom Control OPC for Data Access Open Database Connectivity Open DeviceNet Vendors Association Overall Equipment Effectiveness Original Equipment Manufacturer Operator Interface On-line Analytical Processing Copyright 2009 © ARC Advisory Group • ARCweb. Inc.Appendix B MOM MPC MPS MPU MRM MRO MRP MSDS MSPC MTBF MTBR MTO MTTR MVC MVS NABP NAFTA NAICS NAMUR NC NCR NEMA NeSSI NHTSA NIST NN NPDI NSF OAGi OAGIS OASIS OCS OCX ODA ODBC ODVA OEE OEM OI OLAP Manufacturing Operations Management Modular Platform Component Manufacturing Performance Services Microprocessor Unit Mobile Resource Management Maintenance.com • For Internal Use Only • B-9 .

Appendix B OLE OM OMAC OMG OMP OMS OO OPC OpX OQ OS OSC OSF OSHA OSI OTC P&ID P&L P2B P2D PAC PAM PAS PAT PC PCA PCB PCM PCS PD PDA PDM PDXI PES PET PFC PID PIM PIMS PIP Object Linking and Embedding Operations Management Open Modular Architecture Control Object Management Group Operations Management Platform Order Management System Object-oriented (Analysis. Design or Programming) OLE for Process Control Operational Excellence Operational Qualification Operating System Operation Safe Commerce Open Software Foundation Occupational Safety & Health Administration Open Systems Interconnect Over-the Counter Piping & Instrumentation Diagram OR Process & Instrumentation Diagram Profit and Loss Plant to Business OR Production to Business Plant to Design OR Production to Design Programmable Automation Controller Plant Asset Management Process Automation System Process Analytical Technology Personal Computer Principle Component Analysis Printed Circuit Board Predictive Condition Monitoring Process Control System Positive Displacement Personal Digital Assistant Project Data Management Process Data Exchange Institute Process Electrochemical Systems Process Engineering Tools Procedure Function Chart Proportional Integral Derivative Plant Information Management Process Information Management System Partner Interface Process B-10 • Copyright 2009 © ARC Advisory Group • ARCweb.com • For Internal Use Only .

com • For Internal Use Only • B-11 .Appendix B PLC PLM PLS PM PM&C PMD PNO PO POM POMS POSIX PP PPP PPt PSI PSM PSO PTO PTP PWM QA QbD QC QM QMS QR R&D R2R RCM RDBMS RFC RFDC RFI RFID RFP RFQ RLL ROA ROHS ROI Programmable Logic Controller Product Lifecycle Management Partial Least Squares Preventive Maintenance OR Production Management Process Monitoring & Control Programmable Message Display PROFIBUS User Organization Purchase Order Perfect Order Metric Packaging Operations Management System Portable Operating System Interface Production Planning Point-to-Point Protocol Performance Personalization Tool Pounds per Square Inch Process Safety Management OR Product Service Management Process Simulation & Optimization PROFIBUS Trade Organization Profitable-to-Promise Pulse Width Modulation Quality Assurance Quality by Design Quality Control Quality Management Quality Management System Quick Response Research & Development Run-to-Run Reliability Centered Maintenance Relational Database Management System Remote Function Call Radio Frequency Data Communications/Collection Radio Frequency Interference OR Request for Information Radio Frequency Identification Request for Proposal Request for Quote Relay Ladder Logic Return on Assets Restriction of Hazardous Substances Return on Investment Copyright 2009 © ARC Advisory Group • ARCweb.

Appendix B ROM ROV RP RPC RPM RPO RT RTD RTO RTOS RTU RTX S&OP S/W SaaS SAFE SAM SAMA SBA SBI SCADA SCC SCE SCEM SCM SC-ON SCOR SCP SCPC SCPM SCpM SDC SDLC SDMS SEC SEM Sercos SFA SFC SI Read Only Memory Remote Operated Vehicle (Subsea) Replenishment Planning Remote Procedure Call Real-time Performance Management Real-time Process Optimization Real-time Resistance Temperature Detector Real-time Optimization Real-time Operating System Remote Terminal Unit Real-time Extension Sales & Operations Planning Software Software as a Service Secure Access for Everyone Sensor Actuator Manager Scientific Apparatus Makers Association Service Based Architecture Service Based Infrastructure Supervisory Control and Data Acquisition Supply Chain Connectivity Supply Chain Execution Supply Chain Event Management Supply Chain Management Supply Chain Operating Network Supply Chain Operations Reference Supply Chain Planning Supply Chain Planning and Collaboration Supply Chain Process Management Supply Chain Performance Management Smart Device Configurator Synchronous Data Link Control Scientific Data Management System Statistical Equipment Control OR Securities & Exchange Commission Strategic Enterprise Management Serial Real-time Communication System Sales Force Automation Shop Floor Control OR Sequential Function Chart Systems Integrator OR Systems Integration B-12 • Copyright 2009 © ARC Advisory Group • ARCweb.com • For Internal Use Only .

Appendix B SIC SIL SIS SKU SLA SLC SLDC SLIP SmallTalk SMB SME SMP SMT SNMP SNTP SOA SOAP SOC SoftLogic SOP SOX SP50 SPC SQC SQL SRM SRT SSH SSL SSOP SST SVG T/C TAV TBP TCO TCP/IP TCT TEAM TIE Standard Industrial Classification Safety Integrity Level Safety Instrumented System OR Short-Interval-Scheduling Stock Keeping Units Service Level Agreement Single Loop Controller Single Loop Digital Control Serial Line IP Object Oriented Programming Language Small to Medium Businesses Small & Mid-sized Enterprises Symmetrical Multiprocessing Surface Mount Technology Simple Network Management Protocol Simple Network Time Protocol Service-Oriented Architecture Simple Object Access Protocol System on Chip PC-based Logic Control Standard Operation Procedure Sarbanes Oxley Standards & Practice Committee No.com • For Internal Use Only • B-13 . 50 (ISA) Statistical Process Control Statistical Quality Control Structured Query Language Supplier Relationship Management Soft Real-time Secure Shell Secure Socket Layer Standard Sanitary Operating Procedures Smart & Secure Tradelanes Scalable Vector Graphic Thermocouple Total Asset Visibility Transaction Based Payments Total Cost of Ownership Transmission Control Protocol / Internet Protocol Total Cycle Time Total Enterprise Asset Management Technical Information Exchange Copyright 2009 © ARC Advisory Group • ARCweb.

and Integration Unified Enterprise Management Unified Field Framework Ultra High Frequency Universal Identification Underwriters Laboratories Unified Modeling Language Uniform Product Code Universal Plug & Play Uniform Resource Locator (Internet) Universal Serial Bus United States Department of Agriculture Ultraviolet Value Added Network Value Added Reseller Value Added Services Visual Basic custom control Value Chain Initiative Visual Display Unit Variable Frequency Drive Voluntary Inter-Industry Commerce Standard Committee Very Large Scale Integration Vendor Managed Inventory Voice Over Internet Protocol Virtual Private Network Variable Speed Drive Variable Voltage Inverter B-14 • Copyright 2009 © ARC Advisory Group • ARCweb.com • For Internal Use Only .Appendix B TL TM TMS TOP TPM TQC TQM TREAD TÜV TVO UA UAF UCC UDDI UEM UFF UHF UID UL UML UPC UPNP URL USB USDA UV VAN VAR VAS VBX VCI VDU VFD VICS VLSI VMI VoIP VPN VSD VVI Truckload Transportation Management Transportation Management System Technical and Office Protocol Total Productive Maintenance Total Quality Control Total Quality Management Transportation Recall Enhancement Accountability and Documentation Act Technischer Überwachungs Verein (Technical Inspection Association) Total Value of Ownership Unified Architecture Unified Application Framework Uniform Code Council Universal Description. Discover.

Variable Frequency World Wide Web Consortium Windows Application Binary Interface Web Application Hosting Wide Area Network World Batch Forum World Customs Organization Waste Electrical & Electronic Equipment Wholly Foreign Owned Enterprise Windows Internet Naming Service Work in Process Wireless Local Area Network Warehouse Management Warehouse Management System Windows Open Systems Architecture Wireless Personal Area Network Work Process Management Facility Web Services Description Language Wireless Sensor Network World Trade Organization Worldwide Retail Exchange World Wide Web (Internet) eXtensible Markup Language Copyright 2009 © ARC Advisory Group • ARCweb.Appendix B VVVF W3C WABI WAH WAN WBF WCO WEEE WFOE WINS WIP WLAN WM WMS WOSA WPAN WPMF WSDL WSN WTO WWRE WWW XML Variable Voltage.com • For Internal Use Only • B-15 .

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