Worldwide industrialPC 10 PDF

Industrial PCs Worldwide Outlook
MARKET ANALYSIS AND FORECAST THROUGH 2014
Project Team: Florian Gldner 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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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 Asias Tiger States: Taiwan, Singapore, Hong Kong, South Korea ..................................4-19 Western Europe: Epicenter of Machine Builders & Automation Suppliers...................4-20
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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 Brkle ............................................................................................................. 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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Company: Company: Company: Company: Company: Company: Company: Company: Company:
Kontron Elektronik ............................................................................................... 5-27 Micro Innovation AG............................................................................................ 5-29 NEC ......................................................................................................................... 5-31 Nematron ............................................................................................................... 5-32 Pepperl + Fuchs ..................................................................................................... 5-34 Lanner ..................................................................................................................... 5-37 Rockwell Automation ........................................................................................... 5-39 Schneider Electric .................................................................................................. 5-42 Siemens ................................................................................................................... 5-45
Appendix A: Methodology Appendix B: Common Industry Terminology and Abbreviations
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Industrial PCs Worldwide Outlook List of Figures
List of Figures
2-1 2-2 2-3 Standard Industry Code Classifications - Process Industries ..............................................2-12 Standard Industry Code Classifications - Discrete Industries .............................................2-13 Standard Industry Code Classifications - Service Industries...............................................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 .......................................................................3-24 Leading Suppliers of IPCs for EMEA......................................................................................3-25 Leading Suppliers of IPCs for Asia .........................................................................................3-26 Leading Suppliers of IPCs for Latin America ........................................................................3-27 Leading Suppliers of IPCs for Chemical .................................................................................3-28 Leading Suppliers of IPCs for Oil & Gas ................................................................................3-29 Leading Suppliers of IPCs for Food & Beverage ...................................................................3-30 Leading Suppliers of IPCs for Pharmaceutical & Biotech ....................................................3-31 Leading Suppliers of IPCs for Pulp & Paper..........................................................................3-32 Leading Suppliers of IPCs for Electric Power ........................................................................3-33 Leading Suppliers of IPCs for Water & Wastewater.............................................................3-34 Leading Suppliers of IPCs for Cement & Glass .....................................................................3-35 Leading Suppliers of IPCs for Automotive ............................................................................3-36 Leading Suppliers of IPCs for Aerospace & Defense............................................................3-37 Leading Suppliers of IPCs for Semiconductors .....................................................................3-38 Leading Suppliers of IPCs for Building Automation ............................................................3-39 Leading Suppliers of IPCs for Machinery Manufacturing ...................................................3-40 Leading Suppliers of IPCs for Electronics & Electrical .........................................................3-41 Leading Suppliers of IPCs for Robotics ..................................................................................3-42 Leading Suppliers of IPCs for HMI .........................................................................................3-43 Leading Suppliers of IPCs for Vision ......................................................................................3-44 Leading Suppliers of IPCs for Logic (Soft PLC) ....................................................................3-45 Leading Suppliers of IPCs for Distributed Control (Soft DCS) ..........................................3-46 Leading Suppliers of IPCs for Motion.....................................................................................3-47 Leading Suppliers of IPCs for CNC ........................................................................................3-48 Leading Suppliers of IPCs for Data Acqisition ......................................................................3-49 Leading Suppliers of IPCs for Communication Gateway ....................................................3-50 Total Shipments of IPCs ............................................................................................................4-35 Total Shipments of IPCs for North America ..........................................................................4-36 Total Shipments of IPCs for EMEA .........................................................................................4-37 Total Shipments of IPCs for Asia .............................................................................................4-38 Total Shipments of IPCs for Latin America............................................................................4-39 Total Shipments of IPCs by World Region .............................................................................4-40 Total Shipments of IPCs by World Region .............................................................................4-41
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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 .....................................................................4-42 Total Shipments of IPCs for Hardware Revenue by Type ...................................................4-43 Total Shipments of IPCs for Software Revenues By Type ....................................................4-44 Total Shipments of IPCs for Chemical ....................................................................................4-45 Total Shipments of IPCs for Oil & Gas....................................................................................4-46 Total Shipments of IPCs for Food & Beverage.......................................................................4-47 Total Shipments of IPCs for Pharmaceutical & Biotech........................................................4-48 Total Shipments of IPCs for Pulp & Paper .............................................................................4-49 Total Shipments of IPCs for Electric Power ...........................................................................4-50 Total Shipments of IPCs for Water & Wastewater ................................................................4-51 Total Shipments of IPCs for Cement & Glass ........................................................................4-52 Total Shipments of IPCs for Automotive................................................................................4-53 Total Shipments of IPCs for Aerospace & Defense ...............................................................4-54 Total Shipments of IPCs for Semiconductors.........................................................................4-55 Total Shipments of IPCs for Building Automation ...............................................................4-56 Total Shipments of IPCs for Machinery Manufacturing ......................................................4-57 Total Shipments of IPCs for Electronics & Electrical ............................................................4-58 Total Shipments of IPCs by Industry (5 years) .....................................................................4-59 Total Shipments of IPCs by Industry (2 year overview) ......................................................4-60 Total Shipments of IPCs by Sales Channel .............................................................................4-61 Total Shipments of IPCs by Customer Type ..........................................................................4-62 Total Shipments of IPCs for Robotics ......................................................................................4-63 Total Shipments of IPCs for HMI ............................................................................................4-64 Total Shipments of IPCs for Vision..........................................................................................4-65 Total Shipments of IPCs for Logic (Soft PLC) .......................................................................4-66 Total Shipments of IPCs for Distributed Control (Soft DCS) ..............................................4-67 Total Shipments of IPCs for Motion ........................................................................................4-68 Total Shipments of IPCs for CNC ............................................................................................4-69 Total Shipments of IPCs for Data Acqisition..........................................................................4-70 Total Shipments of IPCs for Communication Gateway........................................................4-71 Total Shipments of IPCs by Application.................................................................................4-72 Total Shipments of IPCs for 19" Rack Mount (Units) ...........................................................4-73 Total Shipments of IPCs for Box PC (Units) ..........................................................................4-74 Total Shipments of IPCs for DIN Rail (Units) .......................................................................4-75 Total Shipments of IPCs for Panel PC (Units) .......................................................................4-76 Total Shipments of IPCs by Type (Units) ..............................................................................4-77 Shipments of Standard 19 Rack Mount Industrial PCs ......................................................4-78 Shipments of Standard Box Industrial PCs ............................................................................4-79 Shipments of Standard Panel Industrial PCs .........................................................................4-80 Shipments of Standard Industrial PCs by Type.....................................................................4-81 Shipments of Embedded Industrial Din Rail PCs .................................................................4-82 Shipments of Embedded Industrial Box PCs .........................................................................4-83 Shipments of Embedded Industrial Panel PCs ......................................................................4-84
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4-51 4-52 4-53
Shipments of Embedded Industrial 19 Rack Mount PCs ...................................................4-85 Shipments of Embedded Industrial PCs by Type .................................................................4-86 Shipments of Industrial PCs by Type......................................................................................4-87
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THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN
ARC Consultant Biography

Florian Gldner
Analyst Automation ARC Advisory Group +49 211 3003 416 fgueldner@arcweb.com
Research Areas of Expertise
Florians focus areas include PLCs, AC drives, motion control, and discrete sensors.
Responsibilities and Experience
Florian is part of the automation team covering manufacturing topics in Europe and is located in ARCs offices in Germany. At ARC, Florian specializes in economic modeling, time series and business cycle analysis, and forecasting. Florian has experience in the automation industry with Siemens and has a strong background in energy markets. In particular, he worked for AREVA in Germany and the US, as well as for E.On Energy. He is also experienced in strategic marketing and mergers & acquisitions.
Education
Florian holds a Master Degree in Economics with Sociology and Psychology as minor subjects. He studied at the Friedrich-Alexander-Universitt in Erlangen (Germany) where he focused on statistics, international markets, and the US economy.
ARC Research Reports and Publications
Working with the Automation team on various studies and reports.

About ARC Advisory Group
Founded in 1986, ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. For even your most complex business issues, our analysts have the expert industry knowledge and firsthand experience to help you find the best answer. We focus on simple, yet critical goals: improving your return on assets, operational performance, total cost of ownership, project time-to-benefit, and shareholder value.
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ARC Analyst Biography

David W. Humphrey
Director of Research Europe ARC Advisory Group +49 89 323 88900 DHumphrey@arcweb.com
David Humphreys focus areas include manufacturing discrete and hybrid industries, particularly application areas such as packaging and safety, and product areas such as PLCs, AC drives, motion control, and industrial networks.
David Humphrey is part of the automation consulting team at ARC covering manufacturing topics in Europe and is located in ARCs offices in Germany. In addition, he is a member of ARCs hybrid manufacturing, packaging and industrial ne tworking teams. David Humphrey has over 20 years of experience in industrial automation, including specifying, designing, and programming control systems in areas ranging from automobile to packaging, implementing projects involving PLCs, HMI hardware and software, industrial networks, drives and motion control. Prior to ARC, he was Area Manager for automation solutions in Rockwell Automation's Munich, Germany office. In addition, he has worked for Raytheon Company and Termiflex, Inc. in the United States.
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 (Wirtschaftsuniversitt Wien) and the University of South Carolina with a concentration in International Business.
Networking Alliances Bridge the Gap between Enterprise and Factory, but Who Reaps the Benefits? Challenges of Industrial Ethernet
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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, 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, Monthly ARC Essay
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ARC Consultant Biography

Paul Miller
Senior Editor/Analyst ARC Advisory Group 781-471-1141 pmiller@arcweb.com

Pauls focus areas at ARC include the water & wastewater and bulk terminal automation industries.
Paul serves several different roles at ARC. In his senior editor role, Paul reviews and edits many ARC market forecast studies, plus most ARC reports, insights, and other Advisory Service deliverables. In his role as an analyst, Paul performs research, produces reports, and consults with clients. Paul also serves as ARCs main contact point for editorial requests and general media relations. Paul has been with ARC since August 2008. Prior to joining ARC, Paul was a contributing editor for Putman Medias CONTROL and INDUSTRIAL NETWORKING magazines for almost a year. Prior to this, Paul served as global public relations manager for Invensys Process Systems and, before that, The Foxboro Company for a total of 23 years. In this capacity, Paul closely followed the evolution of a number of different industrial automation technology areas, including process control systems, advanced process control, fieldbus instrumentation, safety systems, simulation and optimization software, asset management systems, industrial networking, cyber-security, and plant-to-enterprise integration.
Education
Paul earned a B.A. degree from Emerson College in Boston, MA.

Water & Wastewater Industry Strategies Terminal Automation System Strategies (Parts I & II) Sustainability Takes on Additional Meaning at 2008 ARC Orlando Forum
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Other Published Work
Its 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
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ARC Services
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Thank you for purchasing ARC Advisory Groups Global Outlook Study. The material was planned and prepared to help save you time and money with your research. ARC is well known for providing the highest quality and most accurate market intelligence products and services. Since 1986, ARC Advisory Group has provided products & services to hundreds of clients, ranging from start-up firms to Fortune 100 companies. Our analysts follow technology and industry events on a daily basis. They have a broad range of expertise in such areas as e-business, enterprise applications, integration strategies, and industrial automation, including; control systems, drives, sensors, actuators, networks, computers, software, and services. ARC maintains one of the most in-depth databases in the world on technologies, standards, and the products and capabilities of hundreds of automation and software companies. This database is based on thousands of interviews, user surveys, and company visits. Our global network of industry contacts is an invaluable asset in discerning long-term trends from fads. 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. For more details about ARC Advisory Group and how we can further assist you, please contact one of our regional offices nearest you or visit our website: www.arcweb.com.
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Industrial PCs Worldwide Outlook Executive Overview
Chapter 1 Executive Overview

The economic crisis hit the market for industrial PCs (IPCs) hard. The market had enjoyed high growth rates until the economic crisis negatively
After a decade of strong growth in the industrial PC market, 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.
impacted the investment climate. In the past 15 years, many new players emerged especially in China and Taiwan. 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, the last few years have seen rapid
technology changes. Now, with the rise of Intels Atom processor, the technological change continues, opening up a new battleground in industrial applications that previously used non-PC based technology due to power consumption and size constraints. The industrial PC market structure is very fragmented, with no dominant player on a regional or global level. While IPC technology itself has matured, new applications and requirements will enable differentiation through hardware and software.
Indicator Market Maturity Revenue 2009 Potential to 2014 Prices
Current State Growing, technology still improving USD 1,804 USD 2,749 500 to 10.000 USD About 10 with global relevance Two directions: 1. Smaller & dedicated 2. More computing power
Trend Slowly aging 8.8 % CAGR
In
2009,
the
market
dropped by 19 percent. Even though the recovery will start quickly, the level of the boom year 2008 will not be reached again until 2012. A major factor dampening the recovery is the constant drop in prices. This is not only driven by user demand, but also by a drop in intermediate panels. goods like
price erosion and increasing capabilities Constant These directions will continue to drive the market.
Competitors Technical Change
Figure 1-1: Industrial PCs a Brief Market Overview
Scope
This study analyzes the industrial PC market. 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. IPCs in Manufacturing IPCs are important in both manufacturing and many other industrial and commercial applications, including marine, building automation, telecommunications, military, and infrastructure. This study focuses on the manufacturing applications. The study also looks only at complete IPCs sold as a product to machine builders and end users. Therefore, this study excludes board PCs and any revenue resulting from business with PCI cards sold separately. Industrial PCs are ruggedized and built to meet specific industry standards. Typically, this means that they can be run around the clock and handle harsh industrial environments, including extreme temperature, humidity, vibration, and a guaranteed long-term use in industrial environment. Embedded vs. Standard The definition of embedded varies from supplier to supplier and user to user. While some only consider DIN rail-mountable PCs to be embedded, other suppliers consider their pre-configured IPCs as embedded products. ARC Advisory Group defines embedded IPCs as those that: Have no rotating parts. We do not consider PCs with fans or conventional hard drives to be embedded. Have pre-configured hardware and software designed to fit together to work on a specific, pre-defined application. The concept could be described as plug & produce. Embedded PCs are sometimes headless, and the plug & produce concept with pre-installed software allows the machine builder or end user to use this PC without modifying the OS. Study Structure This study splits IPC hardware into
Figure 1-2: Industrial PC Study Structure
three categories: embedded PC, standard IPC, and peripheral hardware.
Together, these three categories add up to 100 percent of the hardware business. Some ruggedized PCs and IPCs are sold without any software. IPCs with nonvolatile (NV) RAM have no rotating parts (fan, hard drive). The peripheral hardware category includes all PC-based hardware sold in a bundle with IPCs (mouse, keyboard, screen/monitor, mountings for panel PCs, etc.). 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, such as Siemens thin client, are included in this study. This study only covers software (operating system or application) sold in a bundle with an IPC. While bundled application software only represents a small percentage of the overall IPC market, weve attempted to further split the bundled application software segment into specific application types (control, HMI, etc.). 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. Box PC: The typical box PC is compact and often headless. They are often very rugged and can be used in widely varied applications. Universal design enables a box PC to be mounted either within or outside a machine. Panel PC: A typical panel PC has a monitor directly mounted with the PC in a common housing. 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). Rack Mount PC: Only IPCs designed to fit in industry-standard 19-inch racks are included in this sub-category.
Market Size and Forecast

In the years 2008 and 2009, two factors characterized the market for industrial PCs: the economic crisis and the ongoing penetration of the market by Taiwanese suppliers.
Competitive Landscape Although relatively mature, the market for industrial PCs remains fragmented, the companies in Figure 1-2 represent only 62 percent of the market. In addition to IPC product specialists, such as Noax or Stahl HMI, the market includes focused automation suppliers like Pepperl+Fuchs and Phoenix Contact, full line automation suppliers like Siemens and Rockwell Automation, and PC-based automation suppliers like Beckhoff and B&R. Furthermore, hundreds of Taiwanese companies supply IPC products either directly to the market or to other IPC suppliers. The IPC market is fragmented and unconsolidated, with only one-sixth of the suppliers analyzed having a market share above 2 percent. This fragmentation is due in part to the attractiveness of the industrial PC market for various companies. For automation suppliFigure 1-3: Revenue of Top Suppliers
ers, IPCs offer the opportunity to build a scalable, open, and flexible product that they can use to enter
new, non-manufacturing markets. For companies that supply PC cards and boards, IPCs provide a logical stepping stone up the value chain. One of the most important topics discussed in the market is the build vs. buy decision. Depth of production varies greatly between suppliers and touches all aspects of an IPC. Many companies use boards from Taiwan in their IPCs. Many companies also brand label IPCs from other suppliers, predominantly Taiwanese suppliers. 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, but have them manufactured in Taiwan. Others do it all. The IPC market, which will continue to grow over the long run, will continue to attract new competitors. New entrants include both PC or PC component suppliers from Taiwan, and automation suppliers seeking to enlarge their PC business. 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
uct and long-term support requirements of some industries represent a barrier to market entry. In the fragmented and highly competitive IPC market, Asian suppliers are driving down prices for these largely commodity products. Full line automation suppliers:
Full Line Automation Suppliers Offer complete set of automation products and solutions Varies heavily, 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, from sensors to planning software. Full-line automation suppliers broad portfolios and regional and industrial spread is a double-edged sword. These help to stabilize growth and enables larger R&D expenditure, but their sheer size makes these companies less flexible. Their core strength results from their size (large R&D investments, financial
Business Model IPC Portfolio Regional Spread Industry Split Examples Market Share
Figure 1-5: Full line Automation Suppliers
position, worldwide network, economies of scale, and many in-house products available), however, some opportunities remain largely unexploited. For example, R&D expenditures are often relatively low, or focus too much on hardware. Even though these large companies have the possibility to leverage economies of scale, operational excellence can suffer due to organizational overhead. Though many offer a sufficient level of customization (front plate adjustment, choice of standard modules) large suppliers are less open to new development requests from customers. Focused automation suppliers: These companies are also rooted in the old automation hierarchy, but do not have a complete portfolio. 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; rooted in the PLC architecture Not complete, only some IPCs in portfolio Global with strong regional focus Few focus industries Hitachi, Mitsubishi Omron, Phoenix Contact 16 percent
most diverse group in this analysis.
They typically provide products and solutions for certain layers in the automation hierarchy. Notably, these companies are nearly exclusively based in North America, Europe, and Japan. IPCs typically represent only a small portion of their overall portfolio. However, the strength of focused automation
Electric,
Figure 1-6: Focused Automation Suppliers
suppliers in specific industries and/or regions makes it relatively easy for them to expand into new markets. For many, investments have to be carefully planned, since financials are sometimes limited (many in this group are small-to-medium-size enterprises). Many of those focused companies gain experience from complete automation suppliers that enter these attractive niche markets as soon as they reach critical mass. PC-based control suppliers: These companies focus on PC-based automation products, including companies that are already well-established in the IPC market, like Beckhoff or B&R. The companies in this segment experienced tremendous growth during the last years. Benefiting from the ongoing success of PC-based control in general and individual achievements in operation excellence, many have successfully established their brand in the market. PC-based control suppliers can efficiently leverage the modularity of their key product to offer front office flexibility, with standardized modules for manufacturing lines.
Business Model
IPC Portfolio Regional Spread Industry Split Examples Market Share
PC-based control Supplier Offer variety of PC-based products; rooted in the PAC/ PC architecture; solution business less developed Mostly complete, large share of embedded PCs Global with regional focus
Several focus industries B&R, Beckhoff, National Instruments 23 percent
Figure 1-7: PC-based Control Suppliers
European companies dominate this group. The Taiwanese companies often lack deep domain knowledge of the automation business in mature economies, and thus predominantly focus on their home market. selves as PC-based control suppliers. Pure IPC supplier: This category includes companies that specialize in industrial PCs and primarily (though not exclusively) offer IPCs. While they
Business Model IPC Portfolio Regional Spread Industry Split Examples Market Share Pure IPC Suppliers Focused on product business; brand labeling as sales channel Complete Global to regional Spezialists and generalists Aaeon, Advantech, BEG- Brkle, Boser, Evoc, Noax, TCI 25 percent
Some
Taiwanese and Chinese PC companies are also trying to establish them-
are often based in Taiwan, there are also many European companies. IPCs are the sole or main source of revenue for pure IPC suppliers. This includes both Advantech, a global, multi-million dollar Taiwanese company, and BEGBrkle, a specialized German IPC supplier. While most of the Taiwanese companies in this category leverage their low production costs, small and specialized players
Figure 1-8: Pure IPC Suppliers
from mature economies focus on customer-centric innovations and developing a close relationship with their customers. Many have a productfocused business and sales structures that directly connect them with OEMs and end users. The capital-intensive sales structure represents a hurdle to exploring new markets, and the small size and relatively high prices make these companies unattractive for brand labeling agreements or other partnerships. Specialized in Silicon: These players offer nearly everything that has to do with silicon, including IPCs. While their silicon business is global, their IPC business is still regionally focused. Often, they are not focused on a specific industry.
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; core business remains boards and cards Mostly Complete Global in components, regional in IPCs No industry focus Axiomtek, ICP Electronics, Kontron, NEC 17 percent
This group 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 still make a large share of their revenue with silicon, but also developed a wellreceived product and system business. 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. Competition in 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. 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.
Figure 1-10 shows both complete Asia and Japan. 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)
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. 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
Asia (incl. 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. What Siemens is in Europe, Rockwell Automation is in North America. Rockwells 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 the smallest number of IPC manufacturers of any regional IPC market. Market Forecast and Development The current economic crisis hit the market for industrial PCs (IPCs) hard, since overall demand for automation equipment has declined drastically. Additionally, the traditional suppliers of industrial PCs face increasing competition from low-cost Asian providers as well as from operator panels, which are becoming more sophisticated. 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 global economy began a steadily accelerating decline in about mid-2008, the end of a string of boom years. The bubble economy,
Figure 1-11: Overall Market Development for Industrial PCs
with massive consumption in many developed and developing nations, simply could not be
sustained. For four years through the summer of 2007, the global economy boomed. The first phase of the economic crisis was the financial crisis, which started in early 2007 with the first collapses on the subprime market in the US. At first, this was not seen as an economy-wide crisis. Currently many companies complain about complications when applying for bank credit and, in mature economies, there are signs of a severe credit crunch. Industry Trends Industrial PCs are already well-accepted and widely used in many industries and applications. Here, the markets are relatively mature and future growth is increasingly dependent on the overall industry performance. In other industries and applications, 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.
Industry Aerospace & Defense Automotive Electronics & Semiconductors Machinery Chemical and Petrochemical Food & Beverage Pharmaceutical & Cosmetics Pulp & Paper % of IPC Market 1.3 % 7.6 % Market Growth 5.0 % 5.7 % Key Trends Consolidation of manufacturers rising demand of solutions Visualizations needs remain strong Falling prices, concentration on Asia, often use IPCs in manufacturing Consolidation, 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 Ongoing demand to include light SCADA functionality I panels
10.7 %
7.8 %
12.9 % 2.8 % 10.9 % 4.5 % 3.9 %
6.0 % 6.1 % 9.2 % 7.9 % 12.9 %
Water & Wastewater
5.7 %
7.6 %
Figure 1-12: Industry Growth and Market Shares
The automotive industry is volatile and depends heavily on the business cycle, even though China already represents around 11 percent of the world market. The current crisis overshadows many recent developments in the
automotive industry. US automotive manufacturers have struggled since 2006, while Japanese and Korean automakers continue to outperform the Big Three in their domestic markets. Ongoing competition and cost pressures have caused the tier 1 supplier market to consolidate considerably, forcing industrial PC suppliers to deal with a shrinking number of customers. The semiconductor industry has strongly adopted PC technology, using the PC as a platform to integrate third-party I/O, motion control, and networking. Short product lifecycles, fast changing demand and price fluctuations, and rapid technology development characterize the highly cyclical semiconductor industry. Recent rumors point to a chip shortage in 2010. Since IPC suppliers consume relatively few chips compared to consumer electronics IPC suppliers should watch the consumer electronics market carefully, to be early adopters of technological trends from consumer electronics and to avoid shortages. The market for industrial machinery suffered greatly from the current economic crisis. This strong downturn has led to consolidation, especially in the machine tool markets in North America and Europe. The OEM machine tool market in these regions faces increasing pressure to reduce overall development costs for machinery. This forced some machine builders to move production and development resources to Eastern Europe or Asia. In the machinery sector, the most important thing for IPC suppliers is the concept of embedded functionality. Another area where PC technology is 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 include and integrate safety and other control functionality and lower the operating system footprint. SoftServo 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. The hybrid manufacturing industries (food & beverage and pharmaceuticals), where flexibility, openness, and the need to handle large amounts of data for traceability and automation are all requirements, represent a more classical area for IPCs. The demand for automation products in the hybrid industries grows at a stable rate. Demographic changes in emerging economies lead to a steady growth in emerging economies. The food & beverage and CPG industries are at the apex of adoption of highperformance solutions. In recent years, food & beverage producers in-
vested 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. Regional Economic Development Every world region has its own peculiar business cycle and dynamics. 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, industrial PCs have had limited acceptance due to perceived complexity and hesitation based on questions relative to ruggedness, durability, and reliability versus PLCs. The US entered the recession first: will the US be the first country to exit? So far, capital investment in manufacturing remains low, capacity utilization has dipped below 70 percent, and unemployment rose to 9.8 percent in September 2009. The downturn impacted nearly every sector in the US. In Asia many (non-Japanese) Asian companies still rely on automation equipment from Western supplier. Nevertheless, in emerging Asia, Taiwanese IPC suppliers doFigure 1-13: Growth in Geographic Regions
minate this price-driven market. For Western suppliers, the movement of OEMs
towards emerging consumer markets represents a threat and a chance to lose or enlarge business in these regions. The busing habits in emerging Asia differ from those in Western economies and is more price driven and less focused on long term partnerships. Forecasts from the third quarter of 2009 suggest growth in Asia slowing sharply along with the global economy. Japan, Singapore, Hong Kong, Korea, and Taiwan are likely to record negative economic growth in 2009. Average annual GDP growth in Asia is projected to slow from 7.6 percent in 2007 to about 6 percent in 2008, and just under 5 percent in 2009. The key financial risks for Asia stem from volatile capital flows, tighter external financing, and disruptive spillovers to
domestic markets that could lead to a sharp credit squeeze and slower growth. ARC believes that China and India will not only demand more automation equipment as wages rise, but will also shift towards more sophisticated systems with greater capabilities for achieving international quality standards. For IPC suppliers, these emerging markets are increasingly interesting, not only because they offer growth possibilities, but also because they themselves host a number of small specialized suppliers for industrial PCs. The Taiwanese market is the most vibrant PC market worldwide. Even Europe hosts many small, specialized PC players that offer solutions; the Taiwanese market is the fastest growing. (Intel makes roughly one-fourth of its revenue in Taiwan.) The table below analyzes the Taiwanese companies in the study sample. They account for 16 percent of the worldwide market and host a number of different companies. These range from component-driven companies that are moving up the supply chain, to established automation suppliers like Advantech. 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
For automation suppliers, the most important sub-regions in EMEA are Eastern and Western Europe. Western Europe hosts not only many automation suppliers but also a large amount of machine builders and system integrators. Germany, Austria, Switzerland, France, and Italy are the centers of automation and machine building. In emerging Europe, 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, Slovenia, Czech Republic, and Poland have all performed comparably well in the crisis). However, many countries (Latvia, Belarus, Lithuania, Estonia, and Hungary) are not experiencing a slowdown, but rather a free fall. All Eastern European countries will have a large demand for IPCs in utility and infrastructure in the coming years. The deepening global financial turmoil increasingly clouds the regional outlook for Latin America. Growth is expected to slow markedly as the global slowdown and tightening financial conditions take hold. Downside risks to growth have also increased, given the uncertain outlook for world commodity prices and the possibility of further spillovers from the strains to global financial stability. 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, and increasing pressures to improve financial performance.
Industrial automation demand is primarily driven by business issues and so is the market for IPCs. That means that every IPC solution has to prove its advantages compared to embedded control or PLC solutions.
The classical automation topology has merged into flatter, a more integrated architecture, where one device incorporates functionality like logic and motion control as well as visualization. While programmable automation controllers (PACs) originally developed from PLCs, PACs also have similarities with industrial PCs. Due to an open architecture and high computing power, in some respects, IPCs represent the perfect PAC. One difference is that while PACs often only deliver their complete capabilities when part of a single-vendor automation solution, industrial PCs offer the openness that enables users to avoid this single sourcing problem. The continued merging of automation layers will boost sales of IPCs and PACs, cutting into PLC sales to a certain extent.
The current economic situation resulted in consolidation among the companies that buy IPCs. Customer consolidation has various implications for suppliers. As the customer base gets smaller, the market power of the surviving customers increases. These machines builders and end users also have increasingly complex manufacturing processes, as more products are manufactured in more locations. Increasingly, manufacturers prefer to have broader solutions packages from suppliers or third-party system integrators. This minimizes risks as interoperability and applicability responsibility lies with the systems supplier. This trend eliminates the need for specialists in manufacturers organizations, 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, one stop shopping that aim to reduce Total Cost of Ownership (TCO) Support during all lifecycle phases Use of standards to promote choices, provide consistency and simplicity, facilitate a common environment, 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, 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, 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, as well providing other significant cost savings. There is a clear trend towards distributed architecture in future automation topologies. Distributed control needs intensive cross-communication and interaction between systems and their dynamically changing environment. In practice, distributed automation often triggers the large number of different connected systems and is often more easily managed by a PLC/PAC than an IPC. However, IPCs will benefit from the increasing success of industrial Ethernet and real-time industrial Ethernet. Also, as the trend towards distributed architecture continues, the relative benefits of small PLCs with attached I/O decreases in favor of PLCs or IPCs with remote modular I/O. Distributed automation is most powerful when combined with a powerful network like industrial Ethernet. Ethernets increasingly compelling value proposition in the areas of technological commonality, vertical integration, and global ubiquity is one of the most significant changes in automation. Ethernet
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 Intels 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.).
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 suppliers 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.
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 416: 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.
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 Panasonics 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.
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.
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, as well as for technology users seeking to gain a better understanding of the marketplace. By providing strategic market information for internal use by our clients, ARC studies aim to help suppliers develop business plans for marketing and product development and help technology users make better-informed decisions. The information contained in the study is client confidential and should not be used externally or republished without express written consent from ARC. In addition to our traditional hard copy outlook reports, 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. These are Market Intelligence Service (MIS) and Regional Studies with Country & Industry Forecasts. ARCs Market Intelligence Service is a business knowledge base containing market data on manufacturing automation and software solutions. Building on ARCs traditional market studies, 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 Market Intelligence Service provides you with instant access to market intelligence right at your own computer. This means the data is available when and where you need it. 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 youre inte rested. The web-enabled application ensures that you have instant access to the most up-to-date information from ARC. ARC now also offers Regional Studies with Country & Industry Forecasts for all key automation and software solutions. These studies provide both regional market shares of the leading suppliers and market forecasts by country and industry. You can purchase these market studies in several different formats, including On-Demand License, Excel Report, PDF Report, or Hard Copy. The On-Demand License offers unique features not available in other formats. Regional studies include country and industry forecasts.
Please visit our website at www.arcweb.com for more information on these products.
Key Issues Researched

This study looks at industrial PCs (IPCs), including both hardware and bundled software. The study answers a number of relevant questions for automation suppliers, 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 IPCs compatible with PACs?
Manufacturing and Non-Manufacturing Applications

IPCs are important in both manufacturing and many other industrial and commercial applications, including marine, building automation, telecommunications, military, and infrastructure. While this study focuses on the manufacturing applications, since these nonmanufacturing applications provide excellent potential for automation suppliers to expand beyond their traditional markets, the study also covers them to a certain extent. This study excludes board PCs and any revenue resulting from business with PCI cards that are sold
Manufactucturing and NonManufacturing
separately.
Study Structure
This study splits IPC hardware into three categories: embedded PC, standard IPC, and peripheral hardware. Together, these three categories add up to 100 percent of the hardware business. Some ruggedized PCs and IPCs are sold without any software. IPCs with nonvolatile (NV) RAM have
Structure of IPCs for Manucfacturing
no rotating parts (fan, hard drive). The peripheral hardware category includes all PC-based hardware sold in a bun-
dle with IPCs (mouse, keyboard, screen/monitor, mountings for panel PCs, etc.). 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, e.g. Siemens thin client, are included in this study. IPCs without software could be part of embedded or standard IPCs. Special ruggedized PCs are typically embedded. Embedded and standard IPCs are further split into hardware categories (see graphic). Since box, panel, and rack mount IPCs could be used as either an embedded system or a standard IPC, they appear in both categories. Embedded rack-mounted IPCs are primarily used in electric power plants. This study only covers software (operating system or application) sold in a bundle with an IPC. While bundled application software only represents a small percentage of the
Split of Embedded and Standard IPCs
overall IPC market, weve attempted to fu rther split the bundled application software
segment into specific application types (control, HMI, etc.). 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. Other software, including software provided by suppliers that exclusively sell software, is covered in other ARC market outlook studies.
Market Size and Forecast Definitions

ARC derives market size figures from its extensive in-house databases and in-depth interviews with leading suppliers. ARC defines the base year market size in terms of shipments by industry participants, not by bookings or orders. Margins earned by distributors and other sales channels are excluded. Average selling price (ASP) reflects factory-level pricing. A combination of factors, including user projections of future demand and ARCs assessment of the growth potential for each segment form the basis of ARC market size and forecasts estimates. Five-year forecasts in this study show long-term trends. The outlook for any business, however, can dramatically change due to the rapidly changing technology and global economic environment. ARC recommends clients obtain the latest updates from ARC before making any important decisions.
Hardware
Industrial PCs are ruggedized and built to meet specific industry standards. Typically, this means that they can be run around the clock and handle harsh industrial environments, including the following operating conditions: Temperature: Minimum range of between 5 to 50 degree Celsius during operation Humidity: depends on application; embedded systems are sometimes built to handle up to 95 percent humidity without condensation Vibration: minimum 0.2g and shocks at minimum 1g Guaranteed long term load: 2 years
Embedded vs. Standard The definition of embedded varies from supplier to supplier and user to user. While some only consider DIN rail-mountable PCs to be embedded, other suppliers consider their pre-configured IPCs as embedded products. ARC Advisory Group defines embedded IPCs as those that: Have no rotating parts. We do not consider PCs with fans or a conventional hard drive to be embedded. Have pre-configured hardware and software designed to fit together to work on a specific, pre-defined application. The concept could be described as plug & produce.
Embedded PCs are sometimes headless, and the plug & produce concept with pre-installed software allows the machine builder or end user to use this PC without modifying the OS. Embedded PCs require more customization since they typically have a modular design to build the PC for a dedicated application. Please note that a pre-defined application is not the same as a pre-configured application, as many PCs are often delivered without software. 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. Examples include the Think IO (Kontron) and Beckhoffs embedded PCs. Box PC: The typical box PC is compact and often headless. They are often very rugged and can be used in widely varied applications. Universal design enables a box PC to be mounted either within or outside a machine. Examples include Siemens BOX PCs and BEG Brkles Box Line. Panel PC: A typical panel PC has a monitor directly mounted with the PC in a common housing. 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). However, box PCs sold with a screen as a bundle are not considered panel PCs. In these cases, the screen is listed under peripheral hardware, 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
This sub-category only includes software sold by industrial PC providers. Other Software This segment includes application software that is specifically programmed to fit a certain automation requirement. Non-productized, software, custom-programmed by suppliers as part of service/solution business, is not counted here.
Operating System Operating systems include any proprietary or open source (e.g., Linux) software necessary to run an industrial PC. Proprietary OS are part of the other category. Real-time operating systems (RTOS) represent only a small part of the market since ARC does not include third-party software suppliers. Windows software includes all versions: 95, NT, 98, ME, 2000, XP, and Vista.
Application
While embedded application software only represents a small percentage of the overall industrial PC market, 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, like PACs (but unlike PLCs), many IPCs run more than one application. This provides benefits relative to traditional PLCs.
Industries
This study includes market data for IPCs sold into the discrete, process, and hybrid manufacturing industries, as well as for building automation. While ARC also asked suppliers to provide revenue data from naval and military applications (which represent potential new markets for many of our clients), this request specifically pertained to data on IPCs, rather than general-purpose PCs. In the aerospace and defense industry, weve only included data for IPCs used to manufacture these products, rather than in the products themselves.
Sales Channel, Distribution, and Customer Segmentation
ARC analyzes market share by entities involved in the sale and purchase of an automation product. ARC groups these entities into two sets: those that
sell or resell the product (distribution channels), and those that purchase the product (customer types). This definition ensures total unit shipments are the same for both sets and eliminates the possibility of double counting units shipped. Distribution channels do not use, ch ange, or modify the product, though they may package it with other products or brand label it. Customer types either use the product as is, or modify it and add value, either by using it as a component in another product, or by configuring it into a system along with other products. Distribution channels (or sales channels) primarily include the suppliers sales staff, referred to as the direct sales channel; distributors that stock, sell, and support products; and independent representatives that do not stock products, but sell on commission. All customer types purchase IPCs through one or more of these channels. Distributors are well aware of the market demands in their regions as well as of the market structure and competitive environment. Distributors that stock IPCs can reduce delivery times for customers, while helping reduce inventory and storage costs for the IPC manufacturers. The customer types (or purchasers) that make up a market are the consumers or end users of the product, original equipment manufacturers (OEMs), and system integrators (SIs). OEMs incorporate the product as a part of the equipment they produce and sell, while system integrators add value by integrating the product with other components, software, wiring application engineering, and domain knowledge to create systems for their clients. OEMs, end users, and system integrators have different criteria for selecting suppliers. ARC includes shipments to OEMs within a region but does not track imports and exports of IPCs contained within machinery. System integrators leverage their application expertise, knowledge about integrating disparate technologies, and the value they provide to end users by taking single point responsibility for overall system performance. Suppliers also depend on SIs to smooth out fluctuations in demand for project services. These factors ensure that SIs have a role to play, and more so when applications are complex or when products need programming or configuring to suit an application. Brand labeling is an important issue in the IPC market. Beside well-known partnerships, many suppliers buy a part of their IPC assortment to com-
plete the offered product line. While this makes perfect sense in terms of sales strategy, we do not include revenues earned through reselling in this study.
Key Regional Segments
Geographically, ARC has divided the marketplace into four major segmentations: North America, Latin America, EMEA, and Asia. North America consists of the United States and Canada. Latin America is comprised of Central America, Mexico, and South America. EMEA consists of Western Europe, Eastern Europe, CIS, Africa, and the Middle East. Asia consists of Japan, China, India, Taiwan, South East Asia, Korea, and Australia.
North America Europe
Asia
Latin America
Geographic Segmentations
Key Currency Factors
To eliminate changes in market size due to ongoing currency variations, ARC uses average exchange rates over a 12-month period running from October 1 to September 30 for the leading currencies. Each year, ARC updates the exchange rates used in our market analysis and forecasts to portray the most realistic picture of the market possible. When comparing ARC reports from different years, 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. All ARC forecasts are prepared in current US dollars and are based on the as-
sumption that the current inflation rate of approximately 3 percent will continue throughout the period covered by this report.
Exchange Rate National Currency units per US Dollar ($) 0.68 103.39 0.68 31.52
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 factors, as presented in Chapter 4, derive from, 1) the economy and the business cycle, 2) the development of other automation markets, and 3) trends in the IPC market itself. ARC analyzed the identified factors in terms of the dynamics of their impact and their interrelatedness. From a statistical point of view, this represents a previously filtered time series to extract trends and cycles. 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), showing the typical Granger shape. This allows the methodological combination of advanced time series analysis and standard scenario techniques. The threefold data basis represents the structure of the factors. 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. ARCs in-house database and expertise were used to forecast the relevant automation markets and to assess of the growth potential for each segment. Five-year forecasts in this study show long-term trends as well as major business cycle influence. Forecasts of the market the business cycle were based on careful observation and analysis of major national and international organizations (e.g., IMF, WTO, OECD, World Bank). The outlook for any business, however, can dramatically change due to the rapidly changing technology and global economic environment. ARC recommends clients obtain the latest updates from ARC before making any important decisions.
Figure 2-1
Standard Industry Code Classifications - Process Industries
Process Industries Cement & Glass Chemical & Petrochemicals Electric Power (Generation , T&D) Food & Beverage Metals (Primary Production) Mining Oil & Gas (Exploration, Production) Oil & Gas (Pipelines) Oil & Gas (Refining) Pharmaceutical & Biotech Pulp & Paper Textiles Water & Wastewater
SIC Code 32 28 (except 283 & 284) 491, 4931 20, 21 33 10, 12, 14
NAICS Code 327 325 (except 3254 and 3256) 2211 311, 312 331 212 211, 213111, 213112 486, 2212 324 3254, 3256 322 313, 314 2213
NACE Code 26.1-26.8 24.1, 24.2, 24.3, 24.5, 24.6, 24.7 40.1 15.1-15.9, 16.0 27.1-27.5, 37.1 10.1-10.3, 12, 13.1-13.2 11.1, 11.2 40.2, 60.3 23.1, 23.2 24.4, 24.5 21.1, 21.2 17.1-17.7 41, 90
13 46, 492 29 283, 284 26 22 494, 495
Figure 2-2
Standard Industry Code Classifications - Discrete Industries
Discrete Industries Aerospace & Defense Apparel, 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, 31 371, 375, 379 15, 3534, 3564 36 (except 3674) 3674 34 24, 25 35 (except 357) 384, 385 30 27 381, 382, 386, 387, 39
NAICS Code 3364 315, 316 336 3339, 3334 335, 3341, 3342, 3343, 3346 3344 332 3219, 3371, 3372 333 3391 326 511, 323 3345, 3399
NACE Code 35.3 18.1-18.3, 19.2-19.3 34.1-34.3, 35.4-35.5 45.3 30.0, 32.1-32.3, 31.1-31.6 24.61 28.1-28.7 20.1-20.5, 36.1 29.1-29.7 33.1 25.1, 25.2 22.1-22.3 33.2-33.5, 36.2-36.6
*"While most machinery manufacturers fall under this segment, there is also a large quantity of OEM equipment that ARC accounts for within the respective end user industries, which is excluded from the Machinery Industry. For example, 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."
Figure 2-3
Standard Industry Code Classifications - Service Industries
Service Industries Retail - Food & Beverage Retail Other Wholesale/Distributor - Food & Beverage Wholesale/Distributor - Other
SIC Code 54 52, 53, 55, 56, 57, 58, 59 514 50, 51 (except 514)
NAICS Code 445 44 (except 445), 45 4224, 4228 42 (except 4224, 4228) 481, 482, 483, 484, 488, 492, 493
NACE Code 52.2 52 (except 52.2) 51.3 51 (except 51.3) 60.2, 61.161.2, 62.162.2, 63.163.4, 64.1
Transportation & logistics
42, 44, 45, 47
Industrial PC Worldwide Outlook Market Shares
Chapter 3 Market Shares

Although relatively mature, the market for industrial PCs (IPCs) remains fragmented, with many companies still able to position themselves as niche players and as generalists. This includes well-known companies like Stahl HMI, but also lesser-known companies like Noax. In addition to IPC product specialists such as these, the market includes focused automation suppliers like Pepperl+Fuchs and Phoenix Contact, full line automation suppliers like Siemens and Rockwell Automation, and PC-based automation suppliers like Beckhoff and B&R. Furthermore, hundreds of Taiwanese companies supply IPC products either directly to the market or to other IPC suppliers.
Market Overview
A large number of different players characterize the market for industrial PCs. The main differentiator between players is whether they also supply classical automation equipment, such as PLCs or proximity sensors, or focus exclusively on PC-based products. The latter category includes many Asian companies. However, other important characteristics also determine the strategy and the success of a particular supplier. The fragmented, unconsolidated nature of the IPC market, with only one-sixth of the suppliers analyzed having a market share above 2 percent, made it impossible for ARC to segment different players into any particular market size group. This fragmentation is due in part to the attractiveness of the industrial PC market for various companies. For automation suppliers, IPCs offer the opportunity to build a scalable, open, and flexible product that they can use to enter new, non-manufacturing markets.
Figure 3-1: Market of IPCs by Competitor
For
companies that supply PC cards and boards, IPCs provide a logical stepping stone up the value chain.
Industrial PCs Worldwide Outlook Market Shares
One of the most important topics discussed in the market is the build vs. buy decision. Depth of production varies greatly between suppliers and touches all aspects of an IPC. Many companies use boards from Taiwan in their IPCs. Many companies also brand label IPCs from other suppliers, predominantly Taiwanese suppliers. Some companies design their own boards, but have them manufactured in Taiwan. Others do it all. The last topic even extends to the operating system, where some companies use proprietary software (primarily Unix-based), while others use Microsoft Windows. The current trend is towards the buy (brand label) rather than the make strategy, since IPC technology is relatively mature and numerous manufacturers offer plain vanilla products suitable for brand labeling. 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
Weve described the main technology and application trends in Chapter 4. While customer needs trigger most of the trends, suppliers also drive some trends to position themselves in the market. Solutions providers typically have in-depth knowledge of their customers (machine builders or end users) requirements and provide a package of hardware, software, and services tailored to those needs. Many solution providers have modular, standardized products ready to customize to a customers specific needs. This strict definition of solution providers e xcludes most of the providers in the industrial PC market, since these are either product or system providers. The number of solutions providers is only 13 percent of all companies, but these 13 percent generate about 29 percent of worldwide revenue. The largest market share is made up by product suppliers that often tailor their products to dedicated applications. Component suppliers still primarily doing component business as compo-
nents (such as boards) only make up 3 percent of the market. Kontron, for example, is segmented as a product supplier. Indicator Market Maturity Revenue 2009 Potential to 2014 & CAGR Prices Current State Growing, technology still improving USD 1,804 USD 2,749 500 to 10000 USD Slow price erosion and increasing capabilities Constant Trend Slowly aging 8,8 % CAGR The IPC market,
which will continue to grow over the long run, will continue to attract new competitors. New entrants include both PC or PC component suppliers from Taiwan, and automation seeking their to PC suppliers enlarge business.
Competitors
About 10 with global relevance Technology is developing in two ways: 1. Smaller more dedicated to have PAC functionality 2. More computing power
The unique product and long-term support requirements of some industries represent a barrier to market entry. In the fragmented and highly IPC competitive Asian market,
Technical Change
These two direction will continue to drive the market.
Figure 3-3: Operator Panels a Brief Market Overview
suppliers are driving down prices for these largely commodity products. The market dominance by system or solution providers that can offer single-source supply represents another barrier to entry; companies that also offer automation equipment have captured roughly 50 percent of the market. The pressure to be able to provide one-stop shopping increases the attractiveness of brand labeling. B&R, Beckhoff, Baumller, Eaton, Kontron, Mitsubishi, Schneider Electric, and Siemens all use brand labeling or sales/technical partnerships to expand their product portfolios in one way or the other.
In Asia, price plays a larger role than in Europe. This is largely due to the demand for products, instead of systems or solutions. As a result, 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. Typical new entrants to Asian market are display or panel PC providers.
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. Table 3-2 already clustered the players by sales strategy. 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. Component suppliers are less competitive and even though they are 10 percent of the analyzed market, they are only responsible for 3 percent of the revenue made. 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.
Segmentation of Industrial PC Vendors
The old automation hierarchy, with strictly segregated layers for controllers and operator panels, is slowly fading away. On the one hand, suppliers that are rooted in this old hierarchy are moving towards common architectures, such as PACs, and are merging automation layers. On the other hand, new suppliers, rooted in PC-based automation, are also penetrating the market for operator panels using open architectures. Both solutions, whether PAC- or IPC-based, are complementary in some areas, and thus do not yet face product cannibalization on a large scale.
Full Line Automation Suppliers Business Model Offer complete set of automation products and solutions
Focused Automation Suppliers Offer selected set products and solutions; rooted in the PLC architecture
PC-based control Supplier Offer variety of PC-based products; rooted in the PAC/ PC architecture; solution business less developed Mostly complete, large share of embedded PCs Global with gional focus re-
Pure IPC Supplier
Specialized in Silicon
Focused on product business; brand labeling as sales channel
Sell IPCs in order to participate more in the value chain; core business remains boards and cards Mostly Complete
IPC Portfolio
Varies heavily, from complete to basic functionality Global
Not complete, only some IPCs in portfolio Global with strong regional focus
Complete
Regional Spread
Global to regional
Global in components, regional in IPCs No industry focus
Industry Split Examples
All industries
Few focus industries Hitachi, Mitsubishi Electric, Omron, Phoenix Contact 16 percent
Several focus industries B&R, Beckhoff, National Instruments 23 percent
Spezialists Generalists
and
Rockwell Automation, Siemens
Aaeon, Advantech, BEG- Brkle, Boser, Evoc, Noax, TCI 25 percent
Axiomtek, Electronics, torn, 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, from sensors to planning software. Although each player has a certain focus in this hierarchy, they share similar business models. Examples are GE Fanuc, Siemens, Rockwell, and Schneider. Focused automation suppliers: These companies are also rooted in the old automation hierarchy, but do not have a complete portfolio. This category includes companies that are specialized, such as Stahl HMI, and companies that have a strong focus, like Kuhnke, as well companies that have a wide portfolio, like Omron or Mitsubishi. PC-based control suppliers: These companies focus on PC-based automation products, including companies that are already well-established in the IPC market, like Beckhoff or B&R.
Pure IPC supplier: This category includes companies that specialize in industrial PCs and are primarily (though not exclusively) offer IPCs. While they are often based in Taiwan (Aaoen, Boser, etc.), there are also many European companies (Noax, BEG-Brkle, etc.). Specialized in Silicon: These players offer nearly everything that has to do with silicon, including IPCs. While their silicon business is global, their IPC business is still regionally focused (see NEC). Often, they are not focused on a specific industry.
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. Number of Companies 14 Number of Companies 7 6 1 % of WW market 23% % of Tw market 50% 43% 7% Revenue in Mio. USD $ 335 Revenue in Mio. USD $ 265 $ 58 $ 12 / / $ 335 Revenue in Mio. 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
Weve analyzed 13 Taiwanese companies that supply IPCs to the global market. Many more companies are not visible. Our analysis does not reflect the total revenue generated by these Taiwanese firms, since many specialize in board-level or other intermediate products, or in brand-labeled
IPCs (see chart). There are no system or solution providers in Taiwan, and all companies have a focused portfolio. Though many Taiwanese companies are now trying to establish themselves as solution and system providers to the European market, this is often an uphill battle, both from a portfolio perspective and because Taiwanese companies as a whole do not have a great image in Europe.
The Case of Embedded
ARC defines embedded PCs as those with no moving parts and that are designed and built for a specific, pre-defined application. This strict definition excludes many products that the suppliers identify as 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. 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. 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. System providers have the lowest level of embedded PCs. Component and product suppliers offer a large range of embedded PCs, since a pre-defined hardware is a sales argument.
Business Models and Sales Channels
Sales channels can differentiate an IPC supplier and help avoid harmful price competition to provide a strategic advantage. Figure 3-7 shows the different sales channels for different business models. 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), the larger the share of direct sales. Looking at PC-rooted suppliers (not highlighted) the opposite seems to be true. This is because the more component-oriented businesses of both silicon specialists and pure IPC suppliers require a high degree of customization.
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. European suppliers, however, have similar difficulties in Asia.
SWOT Analysis of Business Models

Each business model in the segmentation above has its own strengths, weaknesses, opportunities, and threats (SWOT). Please note that the business models described are an ideal representation. Even though we list company names as examples, the segmentation is only a best fit. For example, B&R could also be segmented as a focused automation company. 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. Innovation is evaluated in terms of speed, customer focus, speed to market, and gained value-to-price propositions.
Technology and assets create barriers to entry in the form of knowhow (technological, customer needs), and tailored solutions.
Operational excellence reflects a companys ability to operate with low costs, maintain price leadership, and offer global services.
Customer intimacy considers brand loyalty, customer knowledge and cooperation, and price positions.
SWOT: Full-Line Automation Suppliers
Full-line automation suppliers broad portfolios and regional and industrial spread is a double-edged sword. These help to stabilize growth and enables larger R&D expenditure, but their sheer size makes these companies less flexible.
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, etc.) 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, financial position, worldwide network, economies of scale, and many in-house
products available), however, some opportunities remain largely unexploited. For example, R&D expenditures are often relatively low, or focus too much on hardware. Even though these large companies have the possibility to leverage economies of scale, operational excellence can suffer due to organizational overhead. Though many offer a sufficient level of customization (adjustment of front plate, chose among the various standard modules) large suppliers are less open to new development from customers. The rise and the growing importance of Asian suppliers represent the most important threat. Products typically represent a large percentage of the full-line automation suppliers overall business. This often places them in direct competition with Asian IPC product suppliers, who up to now, could only compete on price. Certainly, this group is successful in the market, making up 9 percent of our sample in the market research and accounting for nearly 20 percent of all revenue. Obviously, Siemens sheer bulk bias the results here to a certain extent.
SWOT: Focused Automation Suppliers
Focused automation suppliers represent perhaps the most diverse group in this analysis. 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, they account for only 16 percent of the revenue. Notably, these companies are nearly exclusively based in North America, Europe, and Japan. IPCs typically represent only a small portion of their overall portfolio. However, the strength of focused automation suppliers in specific industries and/or regions makes it relatively easy for them to expand into new markets. For many, investments have to be carefully planned, since financials are sometimes limited (many in this group are small-to-medium-size enterprises). Many of those focused companies gain experience from complete automation suppliers that enter these attractive niche markets as soon as they reach critical mass.
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. Benefiting from the ongoing success of PC-based control in general and individual achievements in operation excellence, many have successfully established their brand in the market. PC-based control suppliers can efficiently leverage the modularity of their key product to offer front office flexibility, with standardized modules for manufacturing lines. This group represents 12 percent of the study sample and makes up 22 percent of the revenue. European companies dominate this group, but some companies from Asia, the United States, and Taiwan are also represented. The Taiwanese companies often lack deep domain knowledge of the automation business in mature economies, and thus predominantly focus on their home market. Some Taiwanese and Chinese PC companies are also trying to establish themselves as PC-based control suppliers.
Strength
Leverage of modular, 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 - 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. This includes both Advantech, a global, multi-million dollar Taiwanese company, and BEG-Brkle, a specialized German IPC supplier with roughly 14 million USD revenue. While most of the Taiwanese companies in this category leverage their low production costs, small and specialized players from mature economies focus on customer-centric innovations and developing a close relationship with their customers. 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, and the small size and relatively high prices make these companies unattractive for brand labeling agreements or other partnerships. For this type of business Taiwanese IPC suppliers are much better-positioned for this type of business than are those from mature economies.
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.
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
suppliers such as Turck, ifm, and Sick, are less likely to enter the market since they already have welldefined, well-positioned product portfolios. However, some suppliers still may enlarge their product portfolio when they see strategic opportunities, either through acquisitions (Phoenix Contact acquired Stron, 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.
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.
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. Rockwells 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.
Embedded PCs by Type DIN Rail Aaeon Adlink Technology
Box PC AEC series DPAC, milsystem, ruffsystem, readysystem series
Panel PC AOP series,
Rack Mount
Standard IPCs by Type 19" Rack Mount
Box PC
Panel PC APC series
Advantech
UNO-1000 and UNO-1100.
ARK-1300 & ARK-3300 TPC 120H, TPC series; ARK-3400 660G, TPC 662G, expansible compact TPC 66SN, TPC series, and the ARK-4000 66T, and the TPC Series PC 30 series.
UNO 4000
ARK 5280 series,UNO-2000 series, and the UNO-3000 series
TPC 870 H, TPC 660E, TPC 1261H, TPC 1270 H, TPC 1770H , and TPC 1750 H; AWS and IPPL
Aplex eDOMO and DOMO1000 (both designed for Building Automation) HMI600, RV500 WS500, WS500, WS500-TE, WS600, WS600-TE, FT500, FT500-TE , FT600, FT600-TE
ASEM
AXIOMTEK
B&R Beckhoff CX series FemtoBox PicoBox NanoBox* CompactBox
OT600, OT800, SMARTBOX, PB1300, OT1000, OT1200, PB1200, PB1000, PB800 OT1300 VTA Series, PANEL2000 Slim eBOX series, ICO-200 and Client Panel ICO-100 Computer Powerpanel 100 and 300 Bios; PC 620 Panel PC 300
PR90xx, PR40xx IPC121, IPC423, IPC421, IPC221, IPC220, IPC120 APROL Computers C51xx
PB500, PB600, PB70xx Vertical Purpose Embedded System PC 820 PC 620
PANEL1000 Series
BEG Brkle Boser
ECOline and PROline series BBS 2xxx and BBS 3xxx series BX-100n Series, IPC-BX 950 Series, IPC-BX 840 Series, IPC-BX 800 Series, IPC-BX 720 Series, IPC-BX 701 Series, IPC-BX 360 Series, IPC-BX 10 Series BPF series BBS 1xxx series
Panel PC 400,Panel PC 700 IPC C61xx to IPC CP series; C33 Xx seres with 19"; C36xx C66xx series FemtoBox PicoBox NanoBox* CompactBox BBS 4xxx series BPC series
Contec
IPC-PT 030 Series
IPC-BX 700 Series, PC-BX 900 Series GEMINI ICE 1U, APOLLO ICE 1U,vAdRC-EXP1, VULCAN ICE, the and APCBX-400F, and the INDUSTRIAL PC BX-400P MEC-9403, MEC7001, MEC-8821, MEC-8822, MEC8823(C), MECMEC-91011U, 3002, MEC-3003, MEC-91021U, MEC-4001, MECMEC-92012U, 4002, MEC-9001, MEC-94014U, MEC-9002, MECMEC-94024U 9003
IPC-PT 020 Series, IPC-PT LS10 Series, IPC-PT MV10 Series, IPC-PT SV10 Series, IPC-PT 700 Series
Eurotech
VIPER ICE, the Pegasus ICE, and the Bx-400FN270
ICE-VIEW
VX series
EVOC Group ICP Electronics ThinkIO (ThinkIO Duo and ThinkIO P)
MEC-4004, MEC-8641, TEP-DCU2001, MEC0031, MEC-1001, MEC3001, MEC-3002, MEC3003, MEC-4001, MEC4002, MEC-5002, MEC5003, MEC-5004 Provided
PPC series and EWS series, WPC-1201 Provided
Kontron Nematron Corporation Pepperl+Fu chs Phoenix Contact
CB 751, V Box, V Box Express II, Jrex
Micro and Nano Clients
1U, 2U and 4U; 3U CompactPCI Systems
Concept Box, KIM series and the V Box Express nPC200 Series, SB600/800 Series
V Panel and V Panel Express
RM1400
ePC-Series, ePC-Plus Series VisuNet GMP, VisuNet, IPC-Ex. Panel PC VISUEX PPC Line, Valueline, VMT series
IPC series (blind nodes) 6155R/F (200R), 6177R (650 and 750R), 6181H Hazardous Location IPC427C, Microbox PC 427B 6180P Integrated Keypad; 6181 P/F Performance
Rockwell Automation
6177R (1450R) IPC547C, Rack PC 647B, and Rack PC 847 B Box PC 627B, Box PC 827B
Siemens
IPC 477 C
Panel PC 577 AND 677 series
Figure 3-16: Product Segmentation for Selected Suppliers
Leading Suppliers of Industrial PCs

All leading suppliers of industrial PCs have their unique strategies, making it worth taking a closer look.
Siemens
Siemens remains the top player in this market with its comprehensive range of products and services. As a complete automation supplier, Siemens emphasizes the integration of its products with its key concepts of Totally Integrated Automation (TIA) and Totally Integrated Power (TIP). For the customer, an integrated product line means easier and shorter startup times, common configuration tools, and open communication between devices. For Siemens, 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. This strategy requires an industrial PC portfolio that covers each segment and complements each product line. Siemens is the only suppliers that offer a TV certified industrial Wireless LAN for its Wireless products. In addition Siemens is the only company that offers failsafe soft PLCs, which creates unique selling proposition. Siemens is the largest automation provider in Europe. This forces other suppliers to offer compatibility with the Simatic S7-series PLC. While Siemens is also the market leader in industrial PCs, the distance to competitors is much smaller in this market. With extensive IPC and PLC lines, Siemens does not need to push one technology over the other and distributes both through the companys worldwide sales network. While Siemens is traditionally strong in China, Taiwanese suppliers dominate the Chinese IPC market. There are some other companies are bigger industrial PC suppliers than Siemens, since companies like Advantech or Kontron also focus heavily on POS/POD, Kiosk, gaming, or military. Siemens strictly focus on manufacturing. In Q3 2009, Siemens companywide revenue was down 4 percent, while factory automation incoming orders dropped by 42 percent on a year-to year-basis. Siemens Industrys revenue through the first three quarters of
2009 dropped by 13 percent to EUR 8.1 billion. Siemens benefits from its energy and healthcare sectors, which cushioned the drop in revenue from Siemens Industry.
Advantech
Advantech is the only Taiwanese company accepted as a global IPC supplier. Advantech focused on automation from the start, which differentiates it from other Taiwanese suppliers. One of Advantechs first products were IO modules. Advantech is also strong in brand labeling, with between 20 to 40 percent of its revenue gained from brand labeling. However, the company mainly brand labels products for non-manufacturing applications. Advantech also focuses on growth markets like energy production and building automation, and on key applications, like energy monitoring. Advantech benefits from its regional strength in China and emerging Asia and from the large number of greenfield projects in this region. China is Advantechs biggest market. Advantech also benefits from the strong demand from infrastructure projects in emerging economies. With IPCs as its core product, Advantech offers a degree of customization that very few other suppliers can match. Advantech also builds boards and other intermediate products for specialized applications that require specific form factors, connectivity, IO modules, industrial Ethernet, etc.
B&R
B&R stands out as a fast-growing company with a strategy of engaging high-level technical personnel and developing leading-edge, scalable, and customizable products. B&R is growing fast by capturing OEM customers with proven solutions -- a business model that focuses on providing project-oriented, broad-level solutions for machine builders. B&R leverages it modular product design to keep development keep costs low, while reinvesting approximately 18 percent of sales in R&D. Even though 2009 was also a tough year for B&R in terms of revenue. The company continues to acquire new customers. B&R continues to expand globally and has opened many new offices worldwide, primarily in growth regions such as China, India, and Eastern Europe. The companys strategy is to gain market share by convincing its customer base of the high value
proposition of its solutions, accompanied by project services with attention to detail. In the industrial PC market, B&R is one of the top players in terms of revenue and technology. B&Rs embedded IPC product line focuses on panel (PC620) and box IPCs (Powerpanel 100 and 300 Bios; Panel PC 300). The standard IPC line also focus on these areas (Box: PC 820 and PC 620, and Panel: Panel PC 400,Panel PC 700). One B&R strength is modular design, a key feature in any product line. For example, panel PCs could be purchased with the PC 620 series core. Modular design is a key strength that gives the customer a great variety of choices. B&R also leverages PC technology in other products, such as PACs.
Beckhoff
While most companies emphasize their PC technology, nearly every product that Beckhoff offers is based on PC technology. Beckhoff is well-known for its DIN rail PCs, a segment in which it is a clear market leader. Beckhoff experienced double-digit growth rates prior to the crisis. The core of Beckhoffs strategy is an open automation system based on PCbased control technology. The product range covers industrial PCs, IO modules, and fieldbus components, drive technology, and automation software. Beckoff designs its products to able to be used as separate components, or integrated into a control system. The Beckhoff New Automation Technology philosophy stands for universal and open control and automation solutions for a wide variety of applications. Beckhoff supplies industrial PCs for control requirements and has a strong focus on building automation. Like all industrial PC suppliers, Beckhoff leverages the modularity of the product, but the company still has some holes to fill in its portfolio (such as embedded panel PCs). Conceived as a pure software PLC, TwinCAT PLC allows up to four virtual PLC CPUs, each running up to four user tasks on one PC. The embedded PC line only includes the CX models, which are DIN rail embedded PCs - a product for which Beckhoff is well known. The IPC lines C61xx to IPC C66xx include box PCs that are primarily designed to be mounted in a control cabinet. Many offer modular design to include an individual number of PCI cards. Nineteen-inch rack mount industrial PCs consist of one series, the C51xx. Beckhoffs control panels are not operator panels in the classical sense, but touch/function key monitors for industrial PCs.
To enable an aggressive growth strategy, Beckhoff also brand labels part of its portfolio.
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. For Kontron, industrial automation is a relatively small part of its overall business, enabling the company to do well through 2009, largely due to its business in telecommunications and infrastructure. As a global supplier of boards and cards, Kontron competes with many rising companies in Germany and is also a recognized player in China and other emerging markets. Certainly, Kontron offers many features that other, automation-based IPC suppliers cannot. This includes custom board design in small lots. Kontron backs its products with a standard three-year warranty and guarantees that its products will be available for seven years. Kontron Elektronik sells its industrial computers directly, as well as through leading partners, system houses, and the company's own sales forces. The Think IO is collaboration with Wago, which contributed IO modules and other hardware. 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, Kontron will surely have to re-think its business model over the long term.
EVOC Group
China-based IPC supplier, EVOC, provides embedded products and system-integrated solutions for various applications, such as traffic systems, electric power, telecom, sports, banking, gaming, medical care, energy, manufacturing, and networking. The solutions business remains focused on the embedded side including custom board development for OEMs or end users. EVOC experienced 15 years of strong growth, benefitting from the general growth in the Chinese home market. Now, EVOC is penetrating emerging economies and trying to break into the industrial automation market.
EVOC has had only limited success establishing itself as an important player outside of China and emerging Asia. This is partly due to its late market entrance, partly to a lack of knowledge about the European machine manufacturing market, and partly due to its less developed product portfolio. Rather than focusing purely on price competition, EVOC also invests heavily in R&D to enlarge its revenue share from higher margin segments of the industrial PC market.
NEC
Japan-based NEC Corporation was founded in 1899. The poor overall economic performance of its home market in 2008 and 2009 heavily affected NEC. Even though NEC is a globally oriented company, its IPC business focuses primarily on the Japanese manufacturing industry. Outside of Japan, NEC is well-known in the automation community as a supplier of silicon products for IO link, Microcontrollers, Memory, ASIC, Digital AV, Display Driver, and so on. In this regard, NEC is a siliconfocused manufacturer with all the associated challenges, namely the price drop and competition with Taiwanese suppliers.
Schneider Electric
Schneider Electric, a global automation supplier with headquarters in France, focuses primarily on power and control. However, the company also serves the residential, building, data center and networks, industry, and energy and infrastructure markets. Schneider Electric continues to invest actively to grow its automation business, including the acquisition of Digital Electronics, the owner of Pro-face. Recently, Schneider launched its ONE company program, an initiative to integrate the many brands it has acquired over the years. Schneider Electric has been hit hard by the economic crisis, with revenue and orders falling by 29 percent and 30 percent respectively in Q3 on a year- to-year basis. The Magelis IPC series from Schneider has been reduced to some core products, especially panel PCs. Schneider Electric also offers a box PC (Control box 102 and 402) that could be used as a standalone PC, or combined with a screen to create a modular panel PC. The Smart Box is an embedded box PC. The Flex PC BOX, which can accommodate PCI cards, is also available in a heavy-duty model. Schneider Electrics IPC offering is
less developed than many of its other product lines, as well as than many competitors IPC product lines.
Market Shares Group Figure 3-1
Leading Suppliers of Industrial Personal Computers

2009 = 1,803.8 Million US Dollars
Other = 37.5 %
Copyright 2010 ARC Advisory Group - For Internal Use Only - www.ARCweb.com
Leading Suppliers of Industrial Personal Computers for North America

2009 = 265.0 Million US Dollars
Other = 30.3 %
Leading Suppliers of Industrial Personal Computers for EMEA

Other = 32.5 %
Leading Suppliers of Industrial Personal Computers for Asia

Other = 32.3 %
Leading Suppliers of Industrial Personal Computers for Latin America

Other = 20.9 %
Leading Suppliers of Industrial Personal Computers for Chemical

Other = 30.2 %
Leading Suppliers of Industrial Personal Computers for Oil & Gas

Other = 26.8 %
Leading Suppliers of Industrial Personal Computers for Food & Beverage

Other = 35.6 %
Leading Suppliers of Industrial Personal Computers for Pharmaceutical & Biotech

Other = 22.2 %
Leading Suppliers of Industrial Personal Computers for Pulp & Paper

Other = 32.1 %
Leading Suppliers of Industrial Personal Computers for Electric Power

Other = 26.5 %
Leading Suppliers of Industrial Personal Computers for Water & Wastewater

Other = 34.3 %
Leading Suppliers of Industrial Personal Computers for Cement & Glass

Other = 17.0 %
Leading Suppliers of Industrial Personal Computers for Automotive

Other = 35.5 %
Leading Suppliers of Industrial Personal Computers for Aerospace & Defense

Other = 14.6 %
Leading Suppliers of Industrial Personal Computers for Semiconductors

Other = 32.3 %
Leading Suppliers of Industrial Personal Computers for Building Automation

Other = 31.7 %
Leading Suppliers of Industrial Personal Computers for Machinery Manufacturing

Other = 31.1 %
Leading Suppliers of Industrial Personal Computers for Electronics & Electrical

Other = 23.4 %
Leading Suppliers of Industrial Personal Computers for Robotics

Other = 21.5 %
Leading Suppliers of Industrial Personal Computers for HMI

Other = 40.6 %
Leading Suppliers of Industrial Personal Computers for Vision

Other = 7.1 %
Leading Suppliers of Industrial Personal Computers for Logic (Soft PLC)

Other = 22.1 %
Leading Suppliers of Industrial Personal Computers for Distributed Control (Soft DCS)
Other = 14.8 %
Leading Suppliers of Industrial Personal Computers for Motion

Other = 16.2 %
Leading Suppliers of Industrial Personal Computers for CNC

Other = 16.9 %
Leading Suppliers of Industrial Personal Computers for Data Acqisition

Other = 33.3 %
Leading Suppliers of Industrial Personal Computers for Communication Gateway

Other = 39.4 %
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, since overall demand for automation equipment has declined drastically.
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.
Additionally, the traditional suppliers of industrial PCs face increasing competition from low-cost Asian IPC providers as well as from operator panels, which are becoming more sophisticated. On the other hand, the need for improved monitoring of and increased visibility into a wide range of manufacturing production processes work to boost the market for IPCs.
Weve divided this chapter into five main sections that identify important trends for future market development. The first section summarizes recent global economic trends affecting the industrial automation market. The second describes different industries and the affects of the economic crisis. The third discusses the major geographical regions. The fourth section looks at PLCs and other automation markets. Finally, the fifth section describes developments within the market for industrial PCs.
The Global Economy and the Market for Industrial PCs

In adverse economic climates, a companys capital investments tend to be much more volatile than its actual production output. In the current economic crisis, a drop in capital expenditures negatively affected the market for industrial PCs after years of good growth above average.
Global Economic Development
The global economy began a steadily accelerating decline in about mid2008, the end of a string of boom years. The bubble economy, with massive consumption in many developed and developing nations, simply could not be sustained. 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. Huge investment fueled economic development further in Eastern Europe and the Middle East. Japan was recovering from its deflationary Lost Decade. For four years through the summer of 2007, the global economy boomed. Global GDP rose at an average of about 5 percent per year - its highest sustained rate since the early 1970s. Then things began to change.
As early as 2007, the global economy began to contract because of uncertainties in financial markets. This severely impacted the global automation market, with automotive and machinery market caving in during the latter part of 2008 and first half of 2009. Certainly, the discrete industries took the brunt of the economic downturn, particularly industries that serve markets with high income elasticity like the automotive industry. But spill-over effects have also affected process industries such as bulk and specialty chemicals and reduced capacity utilization significantly. The Economic Crisis An Overview The first phase of the economic crisis was the financial crisis, which started in early 2007 with the first collapses on the subprime market in the US. At first, this was not seen as an economy-wide crisis. Until the end of 2008, there were no signs of an industry-wide credit crunch. The situation then changed abruptly.
Figure 4-1 Timeline of the Economic Crisis
While bank loans for capital investments have to be available at reasonable interest rates, this alone does not necessarily trigger expenditures in automation equipment. Future spending in automation equipment depends not only on the ability of companies to get loans to invest in new capital equipment, but also on their willingness to borrow money. Economic Stimulus Packages Around the World Economic stimulus packages will have a clear impact on automation markets. In the US, infrastructure sectors such as power and water should benefit greatly, in addition to markets for advanced building automation solutions and alternate energy sources. Other countries have their own stimulus packages, some that more directly aim at industrial markets. China, for example, will speed the development of 40 petrochemical projects in that country from 2009 to 2011. Half are already under construction, while others are in the planning stage. Industries include oil refining, ethylene, other chemicals, and fertilizer. According to the plan, the petrochemical sector should see industrial added value growth of 15 percent from 2009 to 2011. A challenge will be that many industrial PC suppliers have only minimally developed sales and service channels for these markets. In Germany, two stimulus
packages aim to boost private consumption and raise government infrastructure. 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.
Figure 4-2 German Stimulus Packages
Impact of Natural Resource Prices From 2006 until the start of the financial crisis, skyrocketing prices of natural resources concerned economists, investors, and automation suppliers alike. While the prices of natural resources rose sharply (see Figure 4-3), the prices for industrial PCs and other automation equipment have remained relatively stable and even declined due to ongoing commoditization. As such, a rise in the costs of input goods did not heavily
influence selling prices. However, this trend will further erode margins if companies resort to securing market share through dumping strategies. Regarding production costs, the industrial PC market also benefits from decreasing prices for semiconductor intermediate products. Commodity prices are crucial for food & beverage, chemical, petrochemical, and pharmaceutical industries, since these sectors often require stainless steel housings. Rising steel prices diFigure 4-3 Commodity Prices (Copper and Crude Oil) Source: Fed and HWWA
rectly impact production costs. The price development will have a sustainable effect since, unlike during the
oil crises of 1973 and 1980, the commodity price shock was not induced by a supply shortage, but rather by rising demand. In the long run, prices will rise again (see Figure 4-3). This resource-effective production aligns well with the current emphasis on sustainable manufacturing - a topic of concern among executives at an increasing number of companies around the world. 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. Capital Investment and its Dependency on the Business Cycle Manufacturers typically borrow money from banks to invest in automation capital equipment. As such, real long-term interest rates directly influence the total cost of ownership for automation equipment. The central banks (such as the US Federal Reserve, the European Central Bank, and the Bank of England) establish the target interest rates. Individual commercial banks then incorporate economic risks when analyzing the rates they charge to manufacturers, thus these interest rates are above the central banks target rates. The lower interest rates, the less cash flow is needed to service the loan.
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.
Figure 4-4 Development of Interest Rates
Industry Trends
Every industry has its own changing visualization requirements and investment dynamics. Even though high-end automation equipment that allows flexible production partly decouples investment and production, consumer demand fundamentally drives both investment and production and thus the two are still connected. Industrial PCs are already well-accepted and widely used in many industries and applications. Here, the markets are relatively mature. In other industries and applications, 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. These represent growth markets for IPC suppliers. Unlike more traditional industrial automation technology, which often involves a steep learning curve for users, IPCs tend to be more familiar and easy to learn.
Figure 4-3 Volatility of Investments and Production
In addition to consumer demand, additional global factors play a role: Equipment and plant lifecycles: The longer the lifecycle of a machine, the smoother the annual investment over time Product lifecycles: Shortening of product lifecycles began in the 1980s in automotive and pharmaceutical industries. Shorter lifecycles lead to a higher volatility in investments, but also drive more flexible production Production flexibility: A trend since the 1980s (just-in-time, Kanban, etc.), flexible production de-couples production from investments. Intensity of service maintenance: The greater the investment in service and maintenance, the more stable the associated automation equipment spending, since service and maintenance depend on installed base. Length of contracts and planning: The longer the contracts and the planning, the smoother the production and capacity utilization. Regulatory framework: Regulatory changes increase investment volatility and tend to decrease overall investment.
Aerospace & Defense
The aerospace industry has grown at about twice the rate of world GDP for the last 30 years. Aerospace manufacturers employ advanced automation software and hardware to maximize planning accuracy and minimize waste. This increases demand for visualization in both the factory and the office. Here, visualization and open communication are key success factors for industrial PCs and PC technology in general. Currently, capital spending in aerospace is stable since military and commercial contracts are planned years in advance, but the industry faces order cancellations, customer failure to exercise options on orders, and fewer new orders in 2009. Many airlines are still in bankruptcy and simply cannot get loans for large orders. In the long run, a possible carbon tax and higher flight prices could diminish the demand for both airplanes and, ultimately, demand for IPCs in this industry.
Automotive
The regional revenue percentages of automotive manufacturers worldwide (Japan: 17 percent, US: 17 percent, China: 11 percent, Germany: 9 percent) highlight Chinas potential to stabilize the market, but the market nevertheless is volatile and depends heavily on the business cycle.
The current crisis overshadows many recent developments in the automotive industry. US automotive manufacturers have struggled since 2006, while Japanese and Korean automakers continue to outperform the Big Three in their domestic markets. Ongoing competition and cost pressures caused the tier 1 supplier market to consolidate considerably, forcing industrial PC suppliers to deal with a shrinking number of customers. The remaining customers search for solutions from system integrators and machine builders, which in turn, demand solutions from automation suppliers. Examples include single-source supply for automation products or existing combinations of mechatronics and automation equipment. In North America, two of Detroits Big Three automakers filed for ban kruptcy in 2009. While both emerged from Chapter 11 by midyear, the North American car industry still has a long way to go if it is to survive in the long term. In the past, profits for Detroits Big Three automakers were almost entirely attributable to the companies auto financing departments. IPCs were never successful in penetrating US car manufacturing and are predominantly used by automakers in Europe and Asia. The automotive industry is moving towards emerging economies, which offer consumer markets and low wages. General Motors, Toyota, BMW, and Ford have increased output in China. However, all this capacity buildup intended to win market share brings the risk of creating over-capacity (as recently experienced in the Chinese electronics industry). European carmakers continue to invest in Central and Eastern Europe by developing clusters of suppliers in the Czech Republic, Slovakia, and Hungary. The European automobile industry continues to suffer from over-capacity and high costs, resulting in difficult wage agreement renegotiations with labor unions.
Semiconductor
The semiconductor industry has strongly adopted PC technology, using the PC as a platform to integrate third-party I/O, motion control, and networking. Short product lifecycles, fast changing demand and price fluctuations, and rapid technology development characterize the highly cyclical semiconductor industry. The semiconductor industry follows three markets: consumer electronics, telecommunications, and personal computers. This industry is of interest to industrial PC producers as both a customer and a supplier, since it provides the chip sets and displays used in IPCs. Recent-
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
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.
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,
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 industrys 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.
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 economys 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.
In this market, industrial PCs and operator panels compete directly, especially since the less demanding, vibration-free environment lowers the technological requirements and thereby the price of the needed IPCs. Furthermore, customers are familiar and comfortable with the PC architecture.
Industry % of Panel Market CapEx Growth 2.3% Key Trends
Automotive
Consolidation of manufacturers rising demand of solutions Visualizations needs remain strong Falling prices, concentration on Asia, often use IPCs in manufacturing Consolidation, 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
3.8%
Electronics & Semiconductors Machinery Chemical and Petrochemical Food & Beverage Pharmaceutical & Cosmetics Pulp & Paper Mining & Metals
4.2%
8.1%
3.5%
4.2% 8.0% 1.4% 0.5%
Water & Wastewater
1.6%
Consumer Packaged Goods Other
5.1% 4.2%
Figure 4-3 Industry Growth and Market Shares Source for CapEx: OECD, Average Growth in Volume (1970 to 2007)
Regional Economic and IPC Trends

Every world region has its own peculiar business cycle and dynamics. The following section looks at the overall investment climate within each region and discusses the impact on the demand for industrial PCs.
North America Limited Acceptance of IPCs, Limited
Economic Growth
In North America, industrial PCs have had limited acceptance due to perceived complexity and hesitation based on questions relative to ruggedness, durability, and reliability versus PLCs. Another issue is the relative short lifecycle of Microsoft OS components (approximately five years) versus the 20+ years for PLCs, which do not have a Microsoft OS front end. The US entered the recession first: will the US be the first country to exit? So far, capital investment in manufacturing remains low, capacity utilization has dipped below 70 percent, and unemployment rose to 9.8 percent in September 2009. The downturn impacted nearly every sector in the US. 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). However, Chryslers, and to a lesser degree, Fords, futures remain uncertain. In addition, the situation of the many companies that supply the auto industry is unclear. The knock-on effects of an auto industry shakeup are widespread and profound. Economic activity in Canada suffered a setback, as slower growth in the US and the effects of past real currency appreciation sharply slowed net exports. Domestic demand growthinitially boosted by commodity-price gainscontinued but softened to more modest levels, and the housing market has been cooling from the highs reached in 2006 07. The recent decline in commodity prices weakened the Canadian dollar, bringing it back to the level of Spring 2007. Overall, vulnerabilities remain given Canadas financial and economic ties with the US. Four-quarter growth is projected to decelerate to 0.3 percent in 2008largely reflecting the negative outturn in the first half of the yearand recover to 1.7 percent in 2009, as the drag from net exports wears off. Average growth was estimated at 0.7 percent in 2008 and 1.2 percent in 2009.
Asia: Diverse Economies, Same Outlook?
Until recently, many (non-Japanese) Asian companies relied on automation equipment from Western suppliers because export-driven business demands high quality standards, which in turn demand high-quality production equipment. Therefore, Western suppliers for automation products, including IPCs, still dominate Asian markets. Certainly, Advantech is the largest domestic supplier in the region. Bottom line: the Asian industrial PC market is all about price. Examples are in the motion control world, where Bosch (Nyquist), ACS Motion, and Power Automation have concentrated on Asian markets and developed servo drives based on cost reduction where they leverage the PC platform. Many IPC suppliers seek closeness to their customers. 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, solutions providers follow. For automation suppliers, its important to be close to customers to better understand the changing requirements of tier one OEMs. While the installed base of machinery and the degree of automation in Asia have grown during the last years, the installed capacity has increased considerably. Demand for automation equipment is still at the low end of the segment (simpler, less solution-based, automation technology) and price is often the most important buying criterion. This leads to different buying habits compared to developed economies where long-term partnerships are formed to secure supply. Price competition opens opportunities for alternative automation brands. Large automation suppliers, like Omron and Siemens, have been established in emerging Asia for quite some time. They have both invested in product lines specifically for emerging markets, but profitability in these regions remains a challenge. Forecasts from the third quarter of 2009 suggest growth in Asia slowing sharply along with the global economy. Japan, Singapore, Hong Kong, Korea, and Taiwan are likely to record negative economic growth in 2009. Average annual GDP growth in Asia is projected to slow from 7.6 percent in 2007 to about 6 percent in 2008, and just under 5 percent in 2009. The key financial risks for Asia stem from volatile capital flows, tighter external fi-
The installed base of CNC machinery in China and India is insignificantly small compared to other developed regions. As such, typical buying habits in other regions are not transferred to this region.
nancing, and disruptive spillovers to domestic markets that could lead to a sharp credit squeeze and slower growth. In Australia, growth is slowing below potential because of tighter credit conditions and the easing in commodity prices. In New Zealand, 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.
China: Communists Saving Capitalism?
PC technology offers comparably low hardware prices, but requires integration. In addition, it differs from the classical PLC architecture and For these reasons, Eastern therefore needs different training for those who apply IPCs in manufacturing or integrate IPCs into their machines. of platform. China, with an overall GDP of $ 3.4 trillion, a labor force of nearly 800 million workers and even more consumers, has enjoyed GDP growth rates of
Despite aggressive measures, global uncertainty, a general bleak outlook, and lack of liquidity between financial institutions will drag Chinas growth figures.
Europe, Korea, Taiwan, India, and China are more likely to adopt this type
around 9.5 percent for years, making the country an important market for automation suppliers. China has a good business environment for manufacturing, and lucrative consumer markets. Many Chinese companies quickly adopt Western technology and seek to achieve Western productivity
benchmarks. Growth forecasts for China have been revised downward recently, with an estimated two million jobs on the line. In 2009, exports will likely fall sharply while the property sector weakens. Much will depend on the effectiveness of the policy response, including the large fiscal stimulus package. Many machine builders and automation suppliers are establishing subsidiaries in this region -- not simple distribution centers, but rather full-fledged assembly and manufacturing operations capable of producing machines and automation equipment for the local market. Many sales that would have originated in regions such as North America, Japan, or Europe now take place directly in China. While many non-PC-based automation equipment product lines are tailored to fit Chinese requirements, IPC suppliers usually leverage the modularity of their products to offer customization. Some machine builders, on the other hand, have reserva-
tions about establishing a business in China due to concern about loss of intellectual property. ARC believes that China will not only demand more automation equipment as wages rise, but will also shift towards more sophisticated systems with greater capabilities for achieving international quality standards.
Japan: Recession - Not Again!
As occurred during the downturn of 2001, Japans 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. The Bank of Japan, the countrys central bank, is likely to keep interest rates near zero and may have to expand its policy of quantitative easing if the recession continues. GDP will shrink by almost 7 percent in 2009, due to a collapse of investment worldwide - Japan is one of the largest machine tool markets. The recovery in 2010 will be modest, with GDP growth forecast to average 1 percent. 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. [Creative destruction is the process under which new innovative companies rise and prosper (creative), and older companies fail and disappear (destruction)]. In growth periods, everyone benefits from the good market development and, in downtimes, the government often bails out poorly performing companies. This leads to slow recovery phases and costly recessions. For example, a plan approved in May allocated $21 billion to prop up troubled companies. Pioneer Electronics, Elipda (a chipmaker), and Japan Airlines were among the first applicants. Unlike in earlier cycles, domestic consumption has been a driver of GDP growth since 2005 and many Japanese companies have improved their balance sheets since 2003, in spite of deflationary and low interest rates. Now, companies are holding back expenditures. The worlds second -largest economy reported a 0.1 percent drop in GDP in its third quarter, after a 0.3 percent fall in its second quarter of 2008. Japans GDP dropped by almost half a percent in 2008.
India: Strong Like a Hungry Elephant
During the last decade, the Indian economy became much more integrated into the world economy, resulting in robust growth. Still, India depends on the inflow of foreign capital to finance this development. Experts expect
growth in India to decline to about 6 percent in 2009, as tighter financial conditions weigh on domestic activity, particularly investment. 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. Machine builders tell ARC that they are more comfortable conducting business in India than in China, due to the increased protection of intellectual property. In addition, rising transportation costs due to commodity prices and the uncertainty of currency effects force companies to produce close to large consumer markets like India. Walmart, JC Penny, Target, and Carrefour are examples. Many manufacturers in the visualization-intensive food & beverage and fast-paced consumer goods sectors produce locally, making this market especially attractive for HMI software and IPCs. With an eye toward improving productivity, many companies selectively look at areas where they can replace manpower with robots. This will make India one of the main growth markets for mobile panels in the next five to ten years. Still, its important to remember that India is an emerging country, where the monsoon has significant impact on GDP (roughly 30 percent is produced in agricultural sector).
Asias Tiger States: Taiwan, Singapore, Hong Kong, South Korea
For IPC suppliers, these emerging markets are increasingly interesting, not only because they offer growth possibilities, but also because they themselves host a number of small, specialized suppliers for industrial PCs. Western competitors should not ignore the Taiwanese and Korean machine builders. These countries mirror Japans market entry strategy over 20 years ago, with the exception that they largely depend upon the Japanese CNC providers, Fanuc and Mitsubishi, to equip their machines. While the Koreans strengthened their automotive production capacity, they also strengthened the machine tool infrastructure to support this industry. Koreans and Taiwanese machine builders were primarily responsible for the large influx of low-price catalog machine tools that severely depressed prices in 2000. While establishing new price points for milling and grinding applications in the low-end machine tool business, these machines also brought credibility to this new class of producers.
Both Korea and Taiwan are experiencing high growth because of their relative position to China and their own burgeoning automotive industries. Many low-end and midrange machine tool builders outsourced production to these countries and enjoy a skilled, low-wage workforce. Furthermore, production in these countries enables end users to respond quickly to sales orders coming out of Asia. In addition, machine OEMs benefit from relatively good intellectual property protection. The Taiwanese market is the most vibrant PC market worldwide. Even Europe hosts many small, specialized PC players that offer solutions; the Taiwanese market is the fastest growing. (Intel earns roughly one-fourth of its revenue in Taiwan.) The table below analyzes the Taiwanese companies of the study sample. They account for 16 percent of the worldwide market and host a number of different companies. These range from component-driven companies that are moving up the supply chain, to established automation suppliers like Advantech. Chapter 3 includes a more detailed competitive analysis.
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%
Taiwanese suppliers have the benefits that industrial PCs are well-accepted in emerging Asia, there is less of a PLC legacy, and more young people are trained on PCs than PLCs. In addition, they could easily deliver to the booming emerging markets nearby. Around 50 percent of the revenue of Taiwanese companies comes from China (not counting exports of IPCs in machines).
Western Europe: Epicenter of Machine Builders & Automation Suppliers
For automation suppliers, the most important sub-regions in EMEA are Eastern and Western Europe. Western Europe hosts not only many automation suppliers but also a large amount of machine builders and system integrators. Germany, Austria, Switzerland, France, and Italy are the centers of automation and machine building. With the adjustment in the financial system likely to be arduous and protracted, experts dont expect a modest recovery until later in 2009. This long crisis affects the automation/machine building clusters since they focus on the discrete industries. Various factors cushion the current downturn: 1) the European Union is a diversified region and many influences balance out each other, 2) the housing crisis in France, Spain, Denmark, was less severe than in the United States, 3) European states have well-developed social systems that sponsor private
Figure 4-7: Economic Development in Western Europe (EU-15). Source: Eurostat
consumption
and
stabilize the economy, 4) not every countrys banks were heavily invested in
subprime markets, and, 5) financing of companies is more independent of capital markets. These five factors are the most relevant for automation markets. Machine builders continue to design some element of the automation for their machinery, such as custom servo drives in an embedded automation solution. However, the European OEM market is moving toward an out-
sourcing model in which increasingly more automation components and sub-systems are purchased from automation suppliers. This is because many machine OEMs can no longer afford to retain an engineering staff. Instead, they look for integrated automation solutions. In general, automation markets are growing faster than machinery markets. The current crisis will foster this development. 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. Even though many companies are financially well positioned, ARC predicts that between 15 and 25 percent of the German machine builders will face financial problems and eventually file for bankruptcy. Both Northern Italy, where PC technology is traditionally strongly used in the packaging industry, and France are also important markets for IPC suppliers.
Eastern Europe and Russia: The Wild East
Like in the emerging Asian markets, industrial PCs are well-accepted in emerging Europe, where there are fewer legacy systems in use. Following a prolonged expansion starting in the mid nineties, domestic demand and exports to Western Europe have started to moderate. Some countries even appreciated a slowdown to ease overheating pressures. However, many countries (Latvia, Belarus, Lithuania, Estonia, and Hungary) are experiencing not a slowdown, but rather a free fall. During the crisis it became evident that there is, in fact, not one Eastern Europe region. In contrast to the struggling countries mentioned above, some economies have developed well. These include Slovakia, Slovenia, Czech Republic, and Poland. Until the crisis began, Hungary and Slovakia suffered from a lack of skilled labor, driving production processes to become more automated and sophisticated. One reason for this development was the inflow of foreign direct investment (FDI), attracted by low corporate taxes, low wages, and a stable investment climate. A combination of dependency on FDI, a heavily exposed banking system, and large government debt resulted in financing problems that forced a bail out by the IMF, the European Union, and the World Bank. All Eastern European countries will have a large demand for IPCs in utility and infrastructure in the coming years.
Poland and the Czech Republic have also attracted huge FDI inflows since 1995. Both economies boomed after 2001, resulting in low unemployment, rising wages, and increased productivity. Rising wages have already forced companies, such as Leoni, to move its wiring harness production to Belarus, a neighboring country with even lower wages for labor-intensive production. Ex-emigrants returning from abroad partially cushioned the labor shortage, but also led to increasing automation of production. The Czech Republic was less affected by the financial crisis since it hosts conservative banks, but has faced an appreciation of the Czech Crown. Poland, in contrast, had to apply for a US$ 20.5 billion IMF loan to stabilize the economy. In general, Eastern Europe will drive growth of low-end CNC applications into Europe as the region continues to modernize. The modernization is driven by Western Europe outsourcing a tremendous amount of production across their neighbors borders. Some machine tool builders actually predict growth rates as high as 25 percent in this region. Forecasts indicate that Russias economy will contract strongly in 2009 due to lower commodity prices combined with increasing problems accessing global capital markets. The recovery is expected to happen in 2010, but at a low rate. The state already provides general help to avoid a repetition of the 2008 bail out, but Russian companies are already due to repay US$ 117 billion to foreign creditors. During the peak of the crisis, the central bank managed a gradual depreciation of the ruble, which is likely to continue its downward trend. This supports exports, but makes foreign debt more expensive. Russia has the Dutch Disease it is heavily dependent on the export of commodities. The symptoms are large trade volumes, a strong dependency on exchange rates, inflationary pressure, and tightening of investments in unproductive sectors. In this case, it also results in political tension. Russias process industries are important for au tomation suppliers. Oil is often produced in Siberia and the long pipelines needed to convey the oil to Western markets require pumps, valves, SCADA systems, and, ultimately, custody transfer systems. Europe is looking for alternative energy sources and large projects are likely to emerge in the future. These can include pipelines from the Caspian Sea or solar thermal generated electricity from the North African desert.
Middle East and Africa: Oil and the Forgotten Continent
The Middle East has continued to experience strong growth in 2008, outpacing global growth for the ninth year in a row. High commodity prices, strong domestic demand, and credibility of policy frameworks support this growth. A strong financial situation and little exposure to US credit markets has so far left the Middle East untouched by the international credit crisis, but the economic situation worsened since oil prices declined. The steady rise in oil prices since 2003 contributed to booming gross FDI inflows to the region, from US$ 18 billion in 2002 to US$ 94 billion in 2008. The largest share of these inflows is directed toward the oil sector in oilexporting countries. As oil prices rose, so did food prices, which created large risk for the entire region. Another interesting sector is building automation. While oil states seek new business opportunities, they invest in tourism and the related infrastructure. Outside of South Africa, Africa is nearly irrelevant for automation suppliers. However, possibilities exist in the Maghreb region of Africa if the countries can provide stability and manage to stabilize inflation and exchange rates.
Latin America
Global financial turmoil increasingly clouds the Latin American regional outlook. Growth is expected to slow markedly as the global slowdown and tightening financial conditions take hold. Downside risks to growth have also increased, given the uncertain outlook for world commodity prices and the possibility of further spillovers from the strains to global financial stability. For Latin America, the ongoing global turmoil represents a confluence of negative shocks: the freeze in global credit markets, weaker external demand, and lower commodity prices. These shocks can have strong negative impact on financing conditions. But the region is not yet at that point and recent scenarios point to growth of around 3 percent next year, close to the average for emerging market countries. The region is expected to deal with the current global shocks better than in previous crises. This reflects the progress many countries in the region have made in improving their macroeconomic fundamentals over the past decade. It is also questionable if Latin American states will react to the crisis with protectionism (e.g., Argentina) or liberalism (e.g., Brazil). Some states (e.g.,
Venezuela) now suffer from a drop in oil prices, whereas other states close to the US (e.g., Mexico) could benefit from US companies lowering their costs and shifting production to Mexico.
Trends in the Automation Market

Industrial automation demand is primarily driven by business issues and so is the market for IPCs. That means that every IPC solution has to prove its advantages compared to embedded control solutions, or a PLC solution.
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, one stop shopping that aim to reduce Total Cost of Ownership (TCO) Support during all lifecycle phases Use of standards to promote choices, provide consistency and simplicity, facilitate a common environment, 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, 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, fieldbus real-time Ethernet communication diversity,
Merge of Layers and Functions
The classical automation topology has merged into a flatter, more integrated architecture, where one device incorporates functionality like logic, motion control, and visualization. While todays IPCs and programmable automation controllers (PACs) share many similarities, the intentionally closed (PLClike) nature of PACs tend to limit their use to single-vendor automation solutions. In contrast, the open (PC-like) architecture of IPCs supports more open, multi-vendor solutions and enables greater flexibility. The continued merging of automation layers will boost sales of both IPCs and PACs, cutting into sales of classical PLCs.
Ever-Increasing Global Competition
Global competition in the automation market will continue to increase, driving price pressure, the need for product differentiation, and pressure for suppliers to achieve operational excellence. This will have negative influence on the prices of industrial PCs and also on the prices of the intermediate goods like displays. Automation markets, in general, 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
tomers, which have to automate larger parts of their production to stay competitive. Even though the market for IPCs will face a downward price trend, it is not likely that the pric es for the end product IPC will decline as rapidly as the prices for intermediate products. In this case, the market will benefit through competition in general.
Customer Solutions Consolidation and Movements Demand for
The current economic situation resulted in consolidation among the companies buying IPCs. For example, in 1988 there were roughly 30,000 OEMs, machine builder, and system integrators delivering intermediate products to automotive manufacturers. In 1998, only 8,000 were left. By 2000, there were just 5,600 suppliers and one forecast predicts 2,800 remaining by 2015. Customer consolidation has various implications for suppliers. As the customer base gets smaller, the market power of the surviving customers increases. These machine builders and end users also have increasingly complex manufacturing processes, as more products are manufactured in more locations. Also, these customers are on the forefront to move production into regions representing the point of sale, which also creates advantages of component pricing and eliminates import taxes and any exchange rate fluctuations. demand. Increasingly, manufacturers prefer to have broader solutions packages from suppliers or third-party system integrators. This minimizes risks as interoperability and applicability responsibility lies with the systems supplier. This trend eliminates the need for specialists in manuf acturers organizations, which minimizes operational and maintenance training requirements for the entire system, as well as other significant cost savings. Many suppliers look to expand their offerings from components-only to a solutions business in markets such as steel processing, pulp & paper, and automotive. Components-only business provides lower value and consequently brings smaller margins and profitability, thus driving many suppliers to expand towards a solutions business.
IPCs and HMI Software Soft Solutions
In addition to these transplants from
industrialized nations, local builders are trying to capitalize on the surge in
HMI software continues to replace proprietary software embedded in devices such as operator panels. Increasingly, CE-based HMI software
deployed on numerous types of wireless devices, such as PDAs, tablet PCs, and mobile phones, replaces proprietary solutions. As a result, Windows CE is now the HMI software operating system in roughly a quarter of units sold. The trend towards increased production visualization benefits panel PCs that include control functionality, since automation tasks with high demand for visualization could be implemented cost efficiently with panel PCs.
Distributed Automation
There is a clear trend towards a distributed architecture in future automation topologies. Distributed control needs intensive cross-communication and interaction between systems and their dynamically changing environment. In practice, distributed automation often triggers the large number of different connected systems and is often more easily managed by a PLC/PAC than an IPC. However, IPCs will benefit from the increasing success of industrial Ethernet and real-time industrial Ethernet. Also, as the trend towards distributed architecture continues, the relative benefits of small PLCs with attached I/O decreases in favor of PLCs or IPCs with remote modular I/O.
Networks in Manufacturing Automation
Distributed automation is most powerful when combined with a powerful network like industrial Ethernet. Ethernets increasingly compelling value proposition in the areas of technological commonality, vertical integration, and global ubiquity is one of the most significant changes in automation. Ethernet can greatly enhance the data gathering from the plant floor. This becomes especially useful if the data is effectively evaluated using applications such as plant asset management (PAM). In the past, the benefits of physical layer commonality were often overwhelmed by Ethernets lack of real-time performance and determinism, use of a non bus-based architecture, higher incremental costs, and overall complexity when used in machine control and other device network applications. Many of these shortcomings have since been overcome. Device- 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. Ethernets penetration at this level is still in its early stages. The is due to the ongoing price premium associated with Ethernetcompatible I/O and devices, the continued use of multiple divergent industrial Ethernet protocols, and the inability to cost-effectively extend down to
the highest-volume items at the device level: low-cost sensors and actuators. Consequently, ARC expects industrial Ethernet to rapidly penetrate the markets for vision systems/cameras, automatic identification/RFID, and similarly data-intensive products. Remote I/O and motion control products will account for a majority of total nodes shipped. Recognizing the twin value propositions of commonality and ease of vertical integration, I/O manufacturers are already migrating their products to Ethernet. But while the business drivers are in place, the lag in technology and standardization development suitable to address discrete industry requirements results in a slower adoption rate compared to the process industries.
Ongoing Demand for More Information Handle, Store, and Use Data
Companies are increasingly interested in handling information, since this enables them to optimize their production process and accommodate regulatory requirements. Organizations will require even more information to make optimized business decisions. Sustainability will be part of all discussions and implementations. One example is the movement towards sustainable manufacturing to drive new growth and margin while responding to new retailer, regulatory, and green demands. For example, the food & beverage industry is one of the largest consumers of energy and water, and one of the largest producers of environmental waste product. Industrial PCs also enable easy connectivity between the production floor and office environments.
Increased Operational Visualization More Transparency
The food & beverage HMI software vertical, is one of the largest consumers of energy and
manufacturing industry, the largest
water, and one of the largest producers of waste product.
Manufacturers increase their operational agility by accessing and visualizing real-time information and applying it to speed up and improve operations, integrating business, manufacturing, and production. This focus is on continuous performance and agility improvement, visualization and control of production equipment, digitized manufacturing operations, and unified and standardized plant IT infrastructure. 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. The movement in this direction benefits automation panels and panel PCs that
are able to satisfy control and visualization needs with low investment and in one device.
Serving the Installed Base
Maintenance replacements and revamps, rather than greenfield projects, dominate the overall automation business. New projects, for example, only account for about a third of the DCS market. Suppliers need to continue to serve and evolve their installed base. Many end users may also take the opportunity of a quieter business environment, when there is not so much pressure on production, to reevaluate their overall automation and control system migration and evolution strategies. 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, 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. IPCs are valued for their flexibility and the possiFigure 4-6: Automation Topology and IPC vs. PACs
bility to leverage existing technologies that IT can more easily support. Negatives are ruggedness, durability, and reliability versus PLCs or PACs;
plus the typically short life cycles time of PC-based components and Microsoft-based operating systems. Automation users in some world regions also still resist using PC technology in mission-critical applications.
Trends in the Industrial PC Market

Various trends within the industrial PC market will affect future growth. These include the Atom processor, 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 0.65W to 8W (the Z series also offer s 2GHz model with 2.4W TDP). This development offers various pos-
sibilities to end users and machine builders. First, the low-cost, low-power Atom enables low-CPU power IPCs at a low price, low energy consumption, and low heat. In this regard, Atom-based IPCs directly compete with operator panels. Still, some suppliers are reluctant to use the Atom, since other products offer similar capabilities, especially if the motherboard is specifically designed for one IPC. In the long run, the Atom will be successful with small and large IPC suppliers.
Computing Power Gets Larger and Size-Independent
Many suppliers now put more CPU power in one PC and offer dual- or quad-core IPCs. More computing power enables an industrial PC to be used in additional applications, especially in visualization. However, since by our definition, embedded IPCs have fanless designs, high heat can be a problem. While in the general-purpose PC world, computing power no longer represents a constraint to compute-intensive software, this is not necessarily a given with small, fanless IPCs that must conform to environmentally hardened IP65 standards. The Atom processor now makes standard IPC computing power available in small fanless IPCs at low cost. With computing power increasingly becoming size and form factorindependent, new markets and applications will open up for industrial PCs, boosting demand. Size-independent computing power also offers new form factors. 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.
High Level of Customization
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, extremely small batch sizes and even custom board development are mostly found with suppliers that also sell chips (see Kontron, Advantech, etc.).
Increased Openness and Functionality
There is a clear trend towards letting the controller become the industrial blade server, combining both control and production management functions (historian, quality, OEE, downtime analysis) on the same platform and connected to distributed I/O. The IPC market clearly benefits from this development, since openness and commuting power are core advantages of industrial PCs.
Success of Microsoft Windows
For HMI software, Windows XP was the fastest growing operating system in terms of revenue, accounting for roughly 60 percent of the total HMI market. However, while Windows has had large success in the HMI area, many suppliers hesitate to use the Windows OS for control applications, due to Windows relatively large footprint and non-real time, nondeterministic nature. In many industrial applications, Linux is the number one operating system. This is especially true in the machine tool segment, where speed and accuracy are required.
PC-Based Safety Functionality
While safety is often an important issue, unlike PLC suppliers, many IPC suppliers do not offer safety functionality. Those suppliers that do, tend to integrate the safety as deeply as possible. Suppliers will increasingly explore development of failsafe IPCs that would enable an IPC to be used in some safety applications, predominantly in discrete industries.
More Real-time Applications
Real-time applications represent a rising market area. This goes hand in hand with the success of real-time Ethernet implementations, such as EtherCat, Powerlink, ProfiNet, and EthernetIP.
DIN Rail PCs
Beckhoff experienced strong growth in recent years, especially for its firstto-market DIN Rail PCs. Certainly, this segment will remain strong, but over the long run, the trend towards distributed control is likely to decrease the benefit of having I/O mounted on the PC.
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, most Asian suppliers have been more successful offering IPCs from large-scale production. However, the trend toward hardware commoditization drives more suppliers European and Asian alike to offer more software with their IPCs. Suppliers also see both software and services as a means to improve hardware sales.
Summary
This chapter attempted to unravel some of the mechanisms that drive the market for IPCs. A brief overview of the factors contributing to and inhibiting growth follows, while the previous paragraphs looked at a wide range of factors.
Factors Contributing to Growth
Numerous factors impact the future market size as well as the market potential. The factors contributing to growth presented here are limited to those that affect the market as a whole. Economic Recovery and Economic Stimulus Packages The economic crisis severely impacted the global automation market. Now, economic outlooks for 2010 have been corrected upwards. Economic stimulus packages will have a clear impact on automation markets. Around the world, governments launched stimulus packages that predominately pushed utilities and other infrastructure-related industries. 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. Hybrid Industries The hybrid industries represent a classical area for IPCs and also an area of stable demand for automation products. Especially in emerging economies, the demand constantly grows.
Building Automation The booming building automation market increasingly incorporates more classical automation technology. IPCs will increasingly be deployed, since customers are familiar and comfortable with the PC architecture and functionality. India and China ARC believes that China will not only demand more automation equipment as wages rise, but will also shift towards more sophisticated systems with greater capabilities for achieving international quality standards. Also, India became much more integrated into the world economy. With an eye towards improving productivity, many are selectively looking at areas where they can replace manpower with automated processes. Eastern Europe and Russia: The Wild East Many Eastern European countries (Poland, Czech Republic, Slovenia, 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. Merging of Layers and Functions The classical automation topology has merged into a flatter, more integrated architecture, where one device incorporates functionality like logic, motion control, and also visualization. This is especially the case in food & beverage, oil & gas, electric power, and water & wastewater industries. This will drive the demand of IPCs. Ever-Increasing Global Competition This will have negative influence on the prices of industrial PCs, but even stronger on intermediate goods like displays. Automation markets, in general, benefit from the increasing competition felt by their customers, who have to automate larger parts of their production to stay competitive. The Atom The low-cost, low-power Atom processor provides enabling technology for low-CPU power IPCs at a low price, low energy consumption, and low heat. In the long run, the Atom will open new field of application, since it helps to decouple computing power from physical size.
Factors Inhibiting Growth
Several factors can inhibit future market growth. In particular, a credit crunch could impact the market heavily. Current questions regarding an upcoming chip shortage could also inhibit growth. Capital Investment and Structural Effects Even though central banks (such as the US Federal Reserve, the European Central Bank, and the Bank of England) lowered target interest rates, interest rates for industry remain high and loans often remain difficult to obtain, creating a credit crunch. A sharpened credit crunch and possible structural effects in manufacturing could lengthen the crisis for IPC suppliers. Competition with PAC/PLCs While IPCs become increasingly more capable, so do PACs. As a result, IPCs face continuing competition from both PLCs and PACs in certain industries and global markets. Maturing Market As the market in general matures, market growth will constantly slow down, due to dropping prices and saturated markets. Especially a drop in display price will dampen the growth in revenue. Chip Shortage Beginning in late 2009 there are rumors about a possible chip shortage in 2010, when economy recovers. This could affect the market of IPCs badly, but the impact depends also on the extend of a shortage, if it happens at all.
Market Forecast Group Figure 4-1
Total Shipments of Industrial Personal Computers

Figures in Millions of US Dollars, Total Market CAGR = 8.8%
Total Shipments of Industrial Personal Computers for North America

Total Shipments of Industrial Personal Computers for EMEA

Total Shipments of Industrial Personal Computers for Asia

Total Shipments of Industrial Personal Computers for Latin America

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 265.0 850.2 672.4 16.1 1,803.8 2010 263.2 855.1 675.5 16.2 1,810.0 2011 274.6 916.6 730.1 17.1 1,938.4 2012 299.7 1,014.2 809.4 18.4 2,141.7 2013 336.3 1,150.6 915.0 20.2 2,422.0 2014 377.1 1,312.9 1,036.8 22.1 2,748.9 CAGR 7.3% 9.1% 9.0% 6.5% 8.8%
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% 265.0 850.2 672.4 16.1 1,803.8 14.7% 47.1% 37.3% 0.9% 100.0%
2014 Revenues 2014 Revenues% 377.1 1,312.9 1,036.8 22.1 2,748.9 13.7% 47.8% 37.7% 0.8% 100.0%
CAGR 7.3% 9.1% 9.0% 6.5% 8.8%
Total Shipments of Industrial Personal Computers by Revenue Category

Figures in Millions of US Dollars Revenue Category Hardware Revenues Software Revenues Total 2009 1,686.8 116.9 1,803.8 2010 1,684.5 125.5 1,810.0 2011 1,799.5 138.9 1,938.4 2012 1,983.7 158.0 2,141.7 2013 2,238.2 183.9 2,422.0 2014 2,536.3 212.6 2,748.9 CAGR 8.5% 12.7% 8.8%
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 1,572.5 114.3 1,686.8 2010 1,572.9 111.5 1,684.5 2011 1,682.9 116.6 1,799.5 2012 1,852.5 131.2 1,983.7 2013 2,085.6 152.6 2,238.2 2014 2,359.7 176.5 2,536.3 CAGR 8.5% 9.1% 8.5%
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 85.2 17.1 14.6 116.9 2010 92.4 18.5 14.6 125.5 2011 102.1 20.7 16.1 138.9 2012 115.7 23.9 18.4 158.0 2013 133.7 28.2 22.0 183.9 2014 153.6 33.0 26.0 212.6 CAGR 12.5% 14.1% 12.2% 12.7%
Total Shipments of Industrial Personal Computers for Chemical

Total Shipments of Industrial Personal Computers for Oil & Gas

Total Shipments of Industrial Personal Computers for Food & Beverage

Total Shipments of Industrial Personal Computers for Pharmaceutical & Biotech

Total Shipments of Industrial Personal Computers for Pulp & Paper

Total Shipments of Industrial Personal Computers for Electric Power

Total Shipments of Industrial Personal Computers for Water & Wastewater

Total Shipments of Industrial Personal Computers for Cement & Glass

Total Shipments of Industrial Personal Computers for Automotive

Total Shipments of Industrial Personal Computers for Aerospace & Defense

Total Shipments of Industrial Personal Computers for Semiconductors

Total Shipments of Industrial Personal Computers for Building Automation

Total Shipments of Industrial Personal Computers for Machinery Manufacturing

Total Shipments of Industrial Personal Computers for Electronics & Electrical

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 61.7 196.2 81.7 69.5 168.7 102.5 8.9 136.7 23.9 177.5 138.6 255.2 117.0 189.4 1,803.8 2010 68.6 58.4 205.0 81.2 82.4 192.7 106.9 8.3 119.2 21.0 167.8 150.2 217.3 116.9 214.3 1,810.0 2011 73.0 63.5 217.0 85.3 88.8 204.6 111.8 8.8 125.1 22.2 177.6 159.8 235.9 127.8 237.2 1,938.4 2012 80.5 70.4 238.5 93.8 98.5 222.4 120.5 9.6 137.1 24.3 194.1 175.1 264.0 143.8 269.2 2,141.7 2013 90.8 79.7 269.2 105.8 111.6 248.0 133.1 10.6 156.1 27.2 215.9 196.3 301.5 163.8 312.2 2,422.0 2014 102.3 90.2 305.3 119.7 127.3 277.0 147.7 11.9 180.5 30.5 241.1 220.8 345.3 187.6 361.6 2,748.9 CAGR 6.1% 7.9% 9.2% 7.9% 12.9% 10.4% 7.6% 6.0% 5.7% 5.0% 6.3% 9.8% 6.2% 9.9% 13.8% 8.8%
Total Shipments of Industrial Personal Computers by Industry

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% 76.2 61.7 196.2 81.7 69.5 168.7 102.5 8.9 136.7 23.9 177.5 138.6 255.2 117.0 189.4 1,803.8 4.2% 3.4% 10.9% 4.5% 3.9% 9.4% 5.7% 0.5% 7.6% 1.3% 9.8% 7.7% 14.1% 6.5% 10.5% 100.0%
2014 Revenues 2014 Revenues% 102.3 90.2 305.3 119.7 127.3 277.0 147.7 11.9 180.5 30.5 241.1 220.8 345.3 187.6 361.6 2,748.9 3.7% 3.3% 11.1% 4.4% 4.6% 10.1% 5.4% 0.4% 6.6% 1.1% 8.8% 8.0% 12.6% 6.8% 13.2% 100.0%
CAGR 6.1% 7.9% 9.2% 7.9% 12.9% 10.4% 7.6% 6.0% 5.7% 5.0% 6.3% 9.8% 6.2% 9.9% 13.8% 8.8%
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 938.5 686.5 15.3 163.5 1,803.8 2010 934.7 697.4 15.2 162.8 1,810.0 2011 1,005.9 743.1 15.9 173.5 1,938.4 2012 1,131.0 802.7 16.8 191.2 2,141.7 2013 1,305.7 881.8 18.1 216.5 2,422.0 2014 1,512.5 971.3 19.3 245.8 2,748.9 CAGR 10.0% 7.2% 4.8% 8.5% 8.8%
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 523.1 941.5 339.2 1,803.8 2010 560.0 899.9 350.2 1,810.0 2011 617.2 953.8 367.4 1,938.4 2012 693.8 1,051.1 396.8 2,141.7 2013 798.1 1,185.4 438.6 2,422.0 2014 921.2 1,341.4 486.3 2,748.9 CAGR 12.0% 7.3% 7.5% 8.8%
Total Shipments of Industrial Personal Computers for Robotics

Total Shipments of Industrial Personal Computers for HMI

Total Shipments of Industrial Personal Computers for Vision

Total Shipments of Industrial Personal Computers for Logic (Soft PLC)

Total Shipments of Industrial Personal Computers for Distributed Control (Soft DCS)
Total Shipments of Industrial Personal Computers for Motion

Total Shipments of Industrial Personal Computers for CNC

Total Shipments of Industrial Personal Computers for Data Acqisition

Total Shipments of Industrial Personal Computers for Communication Gateway

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 64.7 598.0 64.4 193.4 92.9 62.5 72.9 330.1 166.9 157.8 1,803.8 2010 57.7 621.9 65.1 187.8 94.8 55.7 63.6 343.4 167.0 153.2 1,810.0 2011 58.0 695.8 69.4 194.5 100.2 56.5 65.8 359.2 178.2 160.8 1,938.4 2012 61.5 789.0 76.6 214.4 107.3 62.3 73.3 384.7 196.4 176.2 2,141.7 2013 67.3 905.4 86.2 246.1 117.4 71.5 84.9 417.0 227.5 198.8 2,422.0 2014 74.1 1,046.0 96.9 281.6 128.1 82.6 98.9 450.5 265.2 225.0 2,748.9 CAGR 2.8% 11.8% 8.5% 7.8% 6.6% 5.8% 6.3% 6.4% 9.7% 7.3% 8.8%
Total Shipments of Industrial Personal Computers for 19" Rack Mount

Figures in Thousands of Units, Total Market CAGR = 7.8%
Total Shipments of Industrial Personal Computers for Box PC

Total Shipments of Industrial Personal Computers for DIN Rail

Total Shipments of Industrial Personal Computers for Panel PC

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 184.5 341.5 51.4 306.4 30.3 914.1 2010 210.3 309.6 41.5 337.3 31.0 929.8 2011 221.9 335.5 44.6 375.2 33.5 1,010.7 2012 232.9 375.0 50.7 427.0 36.7 1,122.4 2013 248.8 426.8 57.9 495.9 41.0 1,270.4 2014 268.4 488.7 65.2 577.1 46.0 1,445.3 CAGR 7.8% 7.4% 4.8% 13.5% 8.7% 9.6%
Shipments of Standard 19 Rack Mount Industrial PCs

Shipments of Standard Box Industrial PCs

Shipments of Standard Panel Industrial PCs

Figures in Millions of US Dollars, Total Market CAGR = 10.6 %
Shipments of Standard Industrial PCs by Type

2009 19" Rack Mount Box PC Panel PC Other Total 276,7 350,6 590,2 41,1 1.258,6
2010 269,5 344,8 608,6 41,0 1.263,9 2009 Millions of Dollars
2011 280,1 369,2 664,3 43,7 1.357,4
2012 292,4 408,8 742,5 47,7 1.491,3 2014 Millions of Dollars 332,8 523,0 977,2 59,3 1892,3
2013 310,6 460,3 851,8 53,0 1.675,7
2014 332,8 523,0 977,2 59,3 1.892,3 CAGR
CAGR 3,8% 8,3% 10,6% 7,6% 8,5%
Percent 22,0% 27,9% 46,9% 3,3% 100,0%
Percent 17,6% 27,6% 51,6% 3,1% 100,0% 3,8% 8,3% 10,6% 7,6% 8,5%
19" Rack Mount Box PC Panel PC Other Total
276,7 350,6 590,2 41,1 1258,6
Shipments of Embedded Industrial Din Rail PCs

Shipments of Embedded Industrial Box PCs

Shipments of Embedded Industrial Panel PCs

Shipments of Embedded Industrial 19 Rack Mount PCs

Shipments of Embedded Industrial PCs by Type

2009 DIN Rail Box PC Panel PC Rack Mount Other Total 36,1 133,4 100,1 31,2 13,2 313,9
2010 34,2 127,4 103,3 31,2 13,0 309,1
2011 35,8 132,2 111,4 32,4 13,7 325,5
2012 40,1 145,3 126,0 34,6 15,1 361,1
2013 45,7 164,1 145,1 37,9 17,0 409,8
2014 CAGR 52,2 185,3 168,6 42,0 19,3 467,4 7,6% 6,8% 11,0% 6,2% 7,9% 8,3%
2009 Millions of Dollars DIN Rail Box PC Panel PC Rack Mount Other Total 36,1 133,4 100,1 31,2 13,2 313,9
Percent 11,5% 42,5% 31,9% 9,9% 4,2% 100,0%
2014 Millions of Dollars 52,2 185,3 168,6 42,0 19,3 467,4
CAGR Percent 11,2% 39,6% 36,1% 9,0% 4,1% 100,0% 7,6% 6,8% 11,0% 6,2% 7,9% 8,3%
Shipments of Industrial PC Subcategories

2009 IPCs without Rotating Parts and NV Ram Other Total 200,5 1.372,0 1.572,5
2010 191,7 1.381,2 1.572,9
2011 203,3 1.479,5 1.682,9
2012 227,8 1.624,6 1.852,5
2013 261,1 1.824,5 2.085,6
2014 CAGR 300,7 2.059,1 2.359,7 8,4% 8,5% 8,5%
2009 IPCs without Software Other Total 680,1 892,4 1.572,5
2010 646,9 926,1 1.572,9
2011 684,0 998,8 1.682,9
2012 744,1 1.108,3 1.852,5
2013 827,9 1.257,7 2.085,6
2014 CAGR 925,5 1.434,2 2.359,7 6,4% 10,0% 8,5%
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. These profiles analyze the total business of each company as well as the IPC-related portion. Information is provided regarding current model numbers, associated components, communication protocols, and system-level offerings. Information on served markets and alliances is also provided where appropriate. This information was derived from company annual reports and in-depth discussions with senior company officials.
Company: Aaeon
Web: http://www.aaeon.eu/
Key Products
AEC series (embedded box), AOP series (embedded panel), and APC series(panel PC); Embedded Single Board Computer, Fanless Embedded Controller, Panel PCs
Regions
North America; Europe, Middle East & Africa; Asia; China;

Description
Aaeon was established in 1992 in Taiwan and first focused on single board solutions, before they converted the product lines to Compact Boards, HalfSize CPU cards, and Full-Size CPU cards. In 1996 Aaeon already employed over 100 employees and opened an office in New Jersey. 1998 a Chinese and European Sales office were established. 1999 AAEON introduced new the SMT series and was the first Taiwanese IPC manufacturer that went public. In 2000 Aaeon began to complete the IPC and Opertor Terminal Line offering to Industrial Workstations, Panel PCs, 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. In 2008 Aaeon opened an office in Germany. Aaeons key product still remains embedded single board products, so far, but continuously broadens their portfolio. Fanless Box, Panel, and Rack Mount Industrial PCs. In terms of industriel PCs there are three series that are relevant for this study: The AEC series, which is a embedded Box PC, the AOP series, which are embedded Panel PCs, and the APC series, which are Panel PCs. The AOP-8070 is excluded, since it is an Operator Panel.
Partnerships and Acquisitions
Key Partnerships: Kontron, Aaeon, Advantech, Adlink worked in the nanoETXexpress form factor (84 mm x 55 mm) to improve transparency, Blue Chip Technology Key Acquisitions: In 2000, AAEON acquired Astech Inc., a leading Panel PC manufacturer.
Strengths and Challenges
Top strengths: Fast growing and clear development into industrial environemnt, based in Taiwan, already internationalized Top challenges: become accepted in as a supplier for operator panes and IPCs for manufacturing in Europe
Company: Adlink
Web: http://www.ad.siemens.com
Key Products
Industrial PCs, PC components, PCI Cards, Motherboards

Regions
Asia; China;
Description
Adlink was founded in August 1995 in Taipei, Taiwan and has operations in America, Singapore, Beijing, Shanghai, and Shenzhen (China). Adlink currently has 600 employees and was able to nearly double ots revenue from US$ 57.5 million in 2006 to US$ 93.7 million in January 2009. One reason was the acquisition of Ampro Computers, Inc. in 2008. The development during the last years was to move up the value chain in IPC production, which included the acquisition of Ampro Computer, Inc., the development of the DPAC and the opening of offices in Europe (2008 in France and 2005 in Germany). The majority of ADlinks business is selling IPC cards and components dor Industrial PCs. Those components range from small cards, to motherboards to IPC housings. Only recently the DPAC was launched and Adlinked entered the area of finished IPCs. Adlink also offers PC cards for motion control, logic control, or SCADA applications. If Adlink pushes further in the direction they started with the DPAC, they will be a strong competitor to the established IPC suppliers in Europe. Adlink is only represented in this study with a small number of their products. Namely the DPAC, milsystem, ruffsystem, and readysystem series that are all embedded box PCs.
Key Partnerships: joint-venture with ITX-EG in Japan, Toshiba Teli Corporation to provide vision platform solutions, with Kontron to Deliver New microETXexpress platform Key Acquisitions: Ampro Computer, Inc.
Top strengths: Large portfolio of Components for industrial PCs, modular design to fit user needs, 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
Company: Advantech
Web: http://www.advantech.de/eautomation/
Key Products
Automation Software, Panel PCs, Box PCs, Din-Rail Mounted PCs, PC based controllers, Rackmount PCs, Industrial communication equipment Variety of no-industrial products
Regions
North America; Europe, Middle East & Africa; Asia

Description
Advantech was founded in 1983 by three former Hewlett Packard engineers in Taiwan. Advantech expended rapidly and focused more than most other Taiwanese IPC suppliers on automation and industrial needs. Advantech is a Premier Member of the Intel Embedded and Communications Alliance, a community of embedded and communications developers and solution providers. Advantech covers a wide array of applications in diverse industries, offering products and solutions in three business categories: Embedded ePlatform, eServices & Applied Computing, and Industrial Automation groups. In 2008 Advantech had 3731 employees thereof 1330 are located in Taiwan. In 2008 the annual revenue was USD 523 million. Thereof 31 percent were earned in China and Taiwan and 46 in Europe and North America. The industrial Automation revenue was USD 115 million, the embedded and industrial computing revenue was the largest section of Advantech with USD 184 million. Advantechs strength is certainly the rapid expansion to Europe and the US, where it is already an established brand, a status many other Taiwanese suppliers till have to work on. Advantech offers system integration hardware, software, design services, global logistics support, and a front and back office e-business infrastructure. For continued growth, Advantech is reorganizing into two major businesses: One focused on its embedded, "design-in" activities, and the other on its branded products and solutions activities. Regarding solutions activities, Advantech will put investments on several high-growth sectors,
such as: Medical, Power & Energy, Intelligent Transportation; Intelligent Life, Factory and Machine Automation, and Telecom & Network Security. Embedded Box IPCs are the ARK-1300 ultra-compact series, the ARK-3300 Compact Box Series, the ARK-3400 expansible compact series, and the ARK-4000 Series PC. Industrial Box PCs include the ARK 5280 series, which offers PCI slots for expansions, the compact fanless Box UNO-2000 series, the high performance fanless Box PCs UNO-3000 series. Rackmout industrial PCs are the UNO-4000 series, which is also available as an embedded version. Din Rail: UNO-1000 and UNO-1100. The Din-rail models also consist of several industrial controllers: The Micro Pac and the ADAM-5000 series are logic controllers. Advantech offers centralized and decentralized motion control solutions. Centralized solutions include the PEC-3240 and offer the capability to control up to 4 axis. The AMAX series are decentralized motion controllers, that are also able to handle up to four axis. In addition to the classical motion controller housing and design, Advantech also offers motion controllers as PCI cards. These are excluded in this study, since PCI cards are excluded in General Advantech offers a large range of Panel IPCs, including a number of touch panel computers. Embedded Panels are the following models: TPC 120H, TPC 660G, TPC 662G, TPC 66SN, TPC 66T, and the TPC 30 series. Industrial Panel PCs are: TPC 870 H, TPC 660E, TPC 1261H, TPC 1270 H, TPC 1770H , and TPC 1750 H. The AWS and IPPL series are also Industrial Panel PCs. The PWS series is a rugged portal industrial PC.
Key Partnerships: Advansus/Taiwan/Motherboard design & Manufacturing Key Acquisitions: None to report
Top strengths: Branding, broad product range, global presence, Established provider for Panel and Box PCs, well present in emerging economies, combining western quality standards with Asian production costs
Top challenges:
Dealing with increasing labor costs in Asia, increasing
competition from commercial vendors in Taiwan, core regional markets begin to mature, get established as a provider for logic and motion control.
Company: ASEM
Web: http://www.asem.it
Key Products
Industrial PCs
Regions
Europe, Middle East & Africa

Description
ASEM was founded in 1979 in Buia (UD). Since ASEM. designs and manufactures its own Industrial PCs, around 30 percent of the total staff (120) is employed in technical and R&D departments. ASEM is dedicated to the design, 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. ASEM S.p.A. portfolio is basically divided into 4 product lines: Embedded & industrial PCs, professional computers, POS & retail systems, and custom-oriented solutions. In contrary to many IPC suppliers in Europe ASEM S.p.A. does not total rely on motherboards from Taiwan, and is therefore offering 100 percent industrial components. ASEM offers the CoDeSys soft PLC runtime system for Windows XP (C oDeSys SP RTE) and Windows CE (CoDeSys SP) Embedded Box (SMARTBOX, PB1300, PB1200, PB1000, and PB800), embedded Panel PCs (OT600, OT800, OT1000, OT1200, OT1300) the embedded Panel PCs eDOMO and DOMO1000 are specifically designed for building Automation. Standard IPCs are available as Rackmount IPCs (PR90xx and PR40xx), as Panel PCs (PB500, PB600, PB70xx, HMI600, and RV500), and as Box PCs (WS500, WS500, WS500-TE, WS600, WS600-TE, FT500, FT500-TE , FT600, FT600-TE).
Key Partnerships: CoDeSys Key Acquisitions: None to report
Top strengths: All is designed and manufactured of one company. Top challenges: Limited global presence
Company: Axiomtek
Web: http://www.axiomtek.com/
Key Products
Embedded PCs and embedded computing products

Regions
North America; Europe, Middle East & Africa; Asia; China

Description
Axiomtek was founded 1990 in Taipei , Taiwan and first positioned itself as an automatic test system integrator. In 2008 Axiomtek already had 570 employees and USD 53.8 million revenue. employees are located outside of Taiwan. The companys portfolio now includes single board computers, industrial & embedded PCs, industrial automation products, touch panel computers, network technologies, and display solutions. Axiomtek also offers Software for industrial PCs (e.g. SCADA). Embedded box PC (eBOX series, ICO-200 and ICO-100), embedded panel PC (VTA Series, GOT Series,PANEL2000 Slim Client Panel Computer ), standard rack mount IPC (IPC423, IPC421, IPC221, IPC220, IPC121, and IPC120),standard Box IPC (Vertical Purpose Embedded System), standard panel IPC (PANEL1000 Series).
Around 30 percent of the
Key Partnerships: None to report Key Acquisitions: None to report

Top strengths: already started to develop solutions out of hard- and software Top challenges: develop solution business
Company: Beckhoff Automation

web: http://www.beckhoff.de
Key Products
CX series (Din Rail embedded PCs), standard Industrial PCs (19Rack: C51xx, Box: C61xx to C66xx, and Panel PCs: CP series, C33xx and C36xx series), TwinCAT PLC, Bus Terminal Controllers (mini PLCs)
Regions

Description
Beckhoff is a USD 400 million company that is based in Verl, Germany. Beckhoff implements open automation systems based on PC Control technology. The product range covers industrial PCs, I/O and fieldbus components, drive technology, and automation software. Products are designed to be used as separate components or can be integrated into a control system. The Beckhoff New Automation Technology philosophy stands for universal and open control and automation solutions for a wide variety of applications. Beckhoff supplies industrial PCs for control requirements and has a strong focus on building automation. Like all industrial PC suppliers Beckhoff leverages the modularity of the product, but there are still some holes to fill like embedded panel PCs. The concept of a black box through software eliminates the advantages of the modularity offered by the technology. Beckhoff offers system solutions in different performance classes, enabled through scalable technology. TwinCAT automation software integrates real-time control with PLC, NC, and CNC functions in a single package. All Beckhoff controllers are programmed using TwinCAT in accordance with the IEC 61131-3 programming standard. TwinCAT PLC running under the Windows NT/2000/XP/Vista operating systems includes both the programming environment and the run-time system, so that an additional programming device is not required. Conceived as a pure software PLC, TwinCAT PLC allows up to four virtual PLC CPUs, each running up to four user tasks on one PC. The PLC pr o-
gram can be written in one or more of the languages provided for in the IEC 61131-3 standard. The embedded PC line only includes the CX models, which are Din rail embedded PCs - a product Beckhoff is famous well known for. The IPC lines C61xx to IPC C66xx include box PCs that are primarily designed to be mounted in a control cabinet. Many offer modular design to include a individual number of PCI cards. 19Rack Mount industrial PCs consist of one series, the C51xx. All of Beckhoffs control Panels are in fact no Oper ator Panels in the classical terms, but touch/function key monitors for industrial 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.
Key Partnerships: Alber Weber GmbH, Artis, Microsoft, mer Key Acquisitions: None to report
ASF
Schir-
Top Strengths: Open automation systems based on PC-compatible control technology. Top Challenges: Rapid growing competition in the core market from diverse suppliers, very focused portfolio, black box concept, holes in product portfolio, growth via acquisitions is hardly possible
Company: BEG Brkle

Web: http:// www.beg-buerkle.de
Key Products
Industrial Box PCs (Femto and Pico line) and Rack Mount IPCs (Ecoline and Proline)
Regions
Europe, Middle East & Africa

Description
BEG Brkle is a small industrial PC manufacturer located in the area of Stuttgart. Brkle currently employs 60 people and has an annual revenue of approximately USD 14 million. Around 8300 industrial PCs are manufactured. BEG Brkle is now changing the focus towards more solution based business. To achieve this they integrate a lot of functionality into a small motherboard to leave room for customization. The share of custom IPCs is currently at around 80 percent. While they have a 1 year innovation cycle for chips and processors, they have a 2 to three year innovation cycle in housing and other parts of the product. A large share of the PCs delivered are ready to run. The box PC lines (FemtoBox PicoBox NanoBox* CompactBox) are available as embedded and standard industrial PCs. The ECOline and PROline series are standard rackmount industrial PCs.
Key Partnerships: Partnership with panel producers panel pc available after the study was published Key Acquisitions: None to report
Top strengths: Specialized in box IPCs, focused on customer needs, high degree of customization Top challenges: Explore new markets (products and regionally)
Company: Boser
Web: http://www.boser.com.tw
Key Products
Industrial PCs and single board computers

Regions

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, Panel, and Rack mount PCs. IN addition to the finished products from the end of the IPC value chain, Boser still provides Industrial Single Board Computers, Chassis, Passive Backplanes, Power Supplies, Mini PCIs, and Peripherals. What is important is that BOSER has kept much of its old cusomter, meaning that BOSER is now providing complete IPC to e.g. European IPC suppliers, that brand label these products. The products included in this study are an Embedded Box(BBS 2xxx and BBS 3xxx series), embedded Panel PCs (BPF series), standard rack mount PCs (BBS 1xxx), standard Box PC (series dard Panel PCs (BPC series)
BBS 4xxx series), and stan-

Top strengths: good balance of price and quality, top supplier for IPC products and boards for European/US suppliers. Top challenges: Establish own brand,
Company: B&R
Web: www.br-automation.com/
Key Products
Embedded box PCs (PC620) and embedded panel PCs (Powerpanel 100 and 300 Bios; Panel PC 300). The standard IPC (Box: PC 820 and PC 620,and Panel: Panel PC 400,Panel PC 700)
Regions
North America; Europe; Asia; China; Latin America; India

Description
B&R offers a modular control philosophy to create platform independent applications to meet OEM requirements. throughout all product portfolios. B&R focuses on automation products for general motion control, visualization, and process control for a variety of industries in machine and plant control. This focus, and a network of 155 offices (most of them fully owned subsidiaries) in more than 60 countries, enables them to support global end users and OEMs. B&R manufactures different types of automation controllers with full user software compatibility throughout their range. Besides conventional operator panels B&R offers PLCs, industrial PCs (IPC), slot-PLCs, soft-PLCs, and a full range of a slice I/O-line. This strategy helps them adapt their automation configurations and provide optimized solutions. B&R has grown rapidly over the past years. The company claims that private ownership synergizes with their specialized focus and offers an environment for quicker decisions, 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. B&Rs embedded IPC product line focuses on box (PC620) and panel IPCs (Powerpanel 100 and 300 Bios; Panel PC 300). The standard IPC line also focus on these areas (Box: PC 820 and PC 620,and Panel: Panel PC 400,Panel PC 700). One of B&R strength is the modular design, which is a key feature throughout any product line. For example panel PCs could be purchased with the PC 620 series core. The variety This philosophy is appluied
based on modular design is a key strength that gives the customer great variety of choice.
Partnerships: With automation manufacturers on the open Ethernet Powerlink network technology; Partnership with ALSTOM for the energy sector and Bombardier for the train sector. Acquisitions: None to report
Top strengths: Offering innovative automation solutions by incorporating new technologies, while maintaining compatibility to protect users software investment. Top challenges: Getting more into field building automation; Continue to achieve growth in regions where large global suppliers command significant market share.
Company: Contec
Web: http://www.contec.com/
Key Products
Measurement and Control, Networks, IPCs (embedded and standard Box and Panel PCs) and other IPC related automation products (Single Board Computers, Flat Panel Displays, Multi-Programmable Display, and Silicon Disk Drives)
Regions
Asia, Japan
Description
Contec is based in Osaka, Japan and had annual sales of 11.3 billion Yen ($99 Million US Dollar sales) and 670 employees in the financial year that eneded on March 2009. Contec has alliances with Intel, Nexcom, and RMI. Nexcom itself is also offering industrial CP, but also motherboards and other mezzanines. RMI provides chip solutions for communication and media and delivers chips to Advantech, Lanner, Nexcom or Contec, to name some examples. The Product portfolio covers measurement and control products and industrial PC products. The first category includes analog input/output, counter & motion controller, digital input/output, bus expansion systems, serial & GPIB communication, and accessories & cables. The second category includes box computers, single board computers, panel computers, flat panel displays, and multi-programmable displays. Contec also offers network and wireless products. The product portfolio in industrial PCs focuses on fanless and embedded products. Contec leverages modular design extensively. Panel PCs are nearly exclusively offered with Windows CE, while Box PCs are available in a greater combination with operating systems.
Key Partnerships: Intel, Nexcom, RMI Key Acquisitions: None to report
Top strengths: Established in Japanese Market, economies of scale for limited products Top challenges: develop solution business, enlarge product portfolio, develop more industry and application specific know-how
Company: Eurotech
Web: http://www.eurotech.com/
Key Products Regions
North America; Europe, Middle East & Africa; Asia; China; Japan
Description
Eurotech was founded in 1992 developed into a multinational company with offices in, with offices in North America, Europe, China, and Japan. The headquarter is in Amaro (Italy). In 2008 Eurotech earned revenue of USD 135 million (80percent earned with Nano PCs and twenty percent with high performance capaciticy PCs). Eurotech employed 586 people in 2008. The revenue is not focused geographically on the home market, but is spread out: 40 percent of revenue derive from business in the US, 25 percent from the EU, and 31 percent from Japan. 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 focused on growth markets like pervasive computing but also offers products to more established markets like manufacturing. Eurotech offers two distinct products: Nano PCs and High Computing Capacity PCs. The product line includes compact and industrial computers, panel computers and monitors, networking, and wearable PCs. Eurotech has comparably little revenue in manufacturing and a traditionally strong focus on transportation, surveillance applications, and products for security, defence and aerospace markets. Products range from highly reliable single board computer (SBC), data communications, and I/O cards to complete rugged mobile computer systems, IP networking equipment (switches, routers) and rugged flat panel displays. Eurotech offers standard (VX series) and embedded (ICE-VIEW) panel PCs. Eurotech also offers operator panels based on RISC architecture (VH-50R and VX-50R), these are excluded in this study. The embedded box PC line includes the VIPER ICE, the Pegasus ICE, and the Bx-400F-N270. Standard box computers are offered with the VULCAN ICE, the BX-400F, and the BX-400P. The Rack mount standard IPCs include the following products:
GEMINI ICE 1U, APOLLO ICE 1U,vAdRC-EXP1, and APC-INDUSTRIAL PC. Next to the IPC line, Eurotech offers industrial monitors
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, Japan, in 2006 Eurotech acquired the Arcom Group, Applied Data Systems Inc., Kurchatov Research Holdings, Chemonol, Remptech
Top strengths: deep production depth, customization Top challenges: strong competitors in the embedded boards and system business (Kontron and Taiwanese suppliers)
Company: EVOC
Web: http://www.evoc.com/
Key Products
Industrial PCs, PC components and mezzanines, Kiosk, and OTC systems.

Regions
Asia; China
Description
EVOC Intelligent Technology Co. Ltd. was founded in 1993 is a supplier of embedded & industrial computing. The revenue in 2008 was approximately 175 Mio. USD. EVOC provides embedded products and system-integrated solutions for various applications, such as traffic system, electric power, telecom, sports, banking, gaming, medical care, energy, manufacturing and networking. EVOC experienced 15 years of strong growth benefitting from the general growth in the home mare China. Now, EVOC is penetrating emerging economies and is trying to get into the market of industrial automation. In 2003, one of EVOC' s subsidiaries was successfully listed on the Hong Kong Stock Exchange. Still the main revenue of EVOC is outside this study scope and is to be found in non-industrial applications, as well as in the field of PC components. 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. In this movement EVOC became a member of ECA (Intel Embedded and Communications Alliance) in Mainland China and is also cooperating with Microsoft, HUAWEI, ZTE, GE, SINOPEC, and Lenovo, among others. The Product line of industrial PCs mainly consists of standard IPC, while the embedded PC line only consists of Box PCs. The standard IPC line includes a wide range of Panel, Box, and Rackmount PCs.
Key Partnerships: Intel, Microsoft, HUAWEI, ZTE, GE, SINOPEC, Lenovo Key Acquisitions: None to report
Top strengths: Well established in Asia, especially in China. Top challenges: get established in Europe as a supplier for industrial PCs.
Company: Flytech
Web: http://www.flytech.com.tw/
Key Products
Panel PCs K790 and K870, line of customized IPCs

Regions
North America; Asia; China

Description
Flytech was founded in 1984 and is a Taiwan based supplier for industrial PCs. Flytech sells and manufactures industrial PCs, POS, and KioskIn 1989, Flytech systems. In 2008 its revenue was USD 73 million. Flytech US was responsible for more than 50 percent of the total revenue. on in terms of variations and computing power. Flytech offers a product range that includes a POS and a kiosk series, which are not included in this study. The panel PCs K790 and KK870 are included and are both standard panel IPCs. The OEM&ODM business from Flytech Flytech OEM / ODM business provides customized hardware and manufacturing for computer based niche products
announced the first book size PC-8000 series and expanded this series later

Top strengths: Established in the POS and kiosk market, experienced in IPCs, high production depth with own producing facilities. Top challenges: get established in other markets beside POS and kiosk
Company: Hitachi
Web: http://www.hitachi.com/
Key Products
HF-W series, the HW-W7500RM, the HF-W7500, the HF-W6500, and the HF-W2000.
Regions
North America; Asia; China

Description
Hitachi was founded in Japan in 1910 and currently earns total revenue of 10,000 billion yen(USD 91.2 billion), as reported in March 2009, about one third (USD 23 billion)is earned with the industrial and power sector. Hitachi, one of the world's leading global manufacturing companies, manufactures and markets a wide range of products that includes consumer products, electronics, information systems, and power and industrial systems. Industrial automation and process control products such as drives, field instrumentation, DCSs and PLCs, along with hydroelectric, nuclear, and thermal power plants, are included in the power and industrial systems division. Industrial PCs are no key product for Hitachi. Hitachi is known for its prowess in power plant construction, especially in the field of nuclear technology. Other products in the industrial segment include compressors, rolling mill equipment, elevators, and chemical plants. Hitachi maintains research and development departments in all branches of the company, which continually work on the improvement of products and technologies. Synergy effects are specifically considered in product policy. As a result, many components for Hitachi products are produced within the company. Hitachis medium-term management plan aims at providing total solutions to customers. Hitachi Industrial Equipment Systems Co., Ltd. was established in April 2002 by the consolidation of the Industrial Components and Equipment Group of Hitachi, Ltd.; Hitachi Drive Systems, Ltd.; Hitachi Nakajo Technology, Ltd.; Hitachi Service & Engineering (East), Ltd.; and Hitachi Service & Engineering (West), Ltd. Hitachi IES (known as Hitachi Sanki in Japa-
nese) is also targeting new business areas, such as remote monitoring services for factories, the environment, entertainment, and IT. The IPC models include the HF-W series, the HW-W7500RM, the HFW7500, the HF-W6500, and the HF-W2000.
Key Partnerships: Hitachi has a partnership with Fuji Electric Systems on high power motors Key Acquisitions: None to report
Top strengths: Power modules and modular design Top challenges: Implementing growth strategies in the face of fierce competition
Company: ICP Electronics

Web: http://www.icpems.com/en
Key Products
Regions

Description
ICP Electronics was founded in 1997 on Taipei, Taiwan and developed quickly to a company with over USD 100 million revenue. From January 2002 to January 2009 the revenue rose from USD 97.7 million to USD 143.7 million. ICP Electronics focused on boards, mezzanines, chips, and industrial panel PCs. ICP conducted re-organization in 2004. The main business of industrial PC was divided into IEI and ICPEMS. The IEI becomes marketing and branding for the industrial PC business while unique electronic manufacturing service becomes ICPEMS core. ICP Electronic operates in the electronic manufacturing services industry. It offers electronic, mechanical, and industrial design services, as well as provides software/firmware development and design assurance services. The company also provides various supply chain management services. Products offered include motherboards, LCD Products, panel PCs, workstations, chassis, network, power supply, and accessory. Their customers are worldwide and even though factories are concentrated across Taiwan and mainland China, ICP Electronics has sales channels in almost 100 countries.

Top strengths: Electronic manufacturing services (EMS) for automation suppliers, strong growth through 2009 Top challenges: moving up in the supply chain
Company: Kontron Elektronik

Web: http://www.kontron.de/
Key Products
Industrial PCs,
Regions

Description
Founded in 1962 Kontron is headquartered in Eching near Munich (Germany); further important locations are Kaufbeuren and Deggendorf (Germany), Pittsburgh and San Diego (USA), Montral (Canada), Taipei (Taiwan), Moscow(Russia), and Beijing(China). The Kontron Group employs a workforce of over 2,500 persons, and is listed in the TecDAX 30 Index. Kontrons sales structure is present in approximately 20 countries. During the current crisis Kontron benefits from the business in telecommunications and infrastructure, this stabilizes the automation business. Total revenue in 2008 was around USD 700 million, thereof 43 percent were earned in America, 46 percent in Europe, and the remaining 11 percent in emerging markets. Roughly a quarter in revenue results from industrial sector. In order to guarantee consistent product quality, Kontron Elektronik applies extensive quality assurance measures in the fields of design, development, production, assembly and service, which conform to DIN ISO 9001 accreditation. For many years, the company has been developing its range of products in line with DIN and EN regulations. By 1994, equipment and systems were already being supplied in accordance with the requirements of CE certification. Kontron Elektronik sells its industrial computers directly as well as via leading OEM partners, system houses as well as the company's own sales forces in France, Singapore, Spain, Switzerland, the UK, and the USA. As a result of the partnership formed with Thomson CSF at the end of 1995, the company now supplies the largest range of computer products in France. A worldwide consultancy and service network comprising the company's own subsidiaries and technical representatives guarantee proximity to the
customer. All computers are supplied with a 3-year guarantee which ensures safe operation. guaranteed.
A 7-year product availability period is also

Top strengths: high production depth, customization, active in stable markets beside manufacturing, premium partner of Intel Top challenges: Taiwanese companies at the chip markets, maintain market leadership in the robotic market
Company: Micro Innovation

Web: http://www.microinnovation.com/
Key Products
SystemP (industrial PCs), SystemN (Modular IO), SystemY (oparetor panels)

Regions
North America; Europe, Middle East & Africa

Description
Micro Innovation AG is located in St. Gallen, Switzerland, and manufactures industrial PCs, Modular IOs, and operator panels. The Micro Innovation AG was formed in 1990 and 50 percent of the share are owned by Moeller, a company owned by Eaton. In 2001 Micro Innovation had 140employees and annualrevenue of Euro 27 Million. While Moeller concentrates more on the classical automation, Micro Innovation is focusing on PC based automation and high end equipment that reflects the merge in automation layers. Micro Innovation also represents the solution business. Micro Innovation uses the Moeller distribution channels. While this clear split was announced before Moeller was acquired by Eaton, Moeller and Micro Innovation are working closely together for 15 years. Moeller itself was acquired by Eaton on April 4, 2008 and is now a 100 percent Eaton company. At this point of purchase Moeller had an annual revenue of about USD 1.3 million. The synergy effects are largely in distributing, where Eaton in the US and Moeller in Europe. In addition Moeller (Easy Relay) manufactures the Eaton Intelligent controller and the Allen Bradley Pico. The operator panel line from Moeller consists predominantly of smaller operator panels with text and graphical display. 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.
Micro Innovation benefited strongly from the 2007/2008 boom phase and partly grew with 20 percent per annum. The IPC product range consists of XP500 embedded panel PC, and the XP700.
Key Partnership: Eaton/Moeller, Turck Key Acquisitions: None to report

Top strengths: Innovation, substantial funding, comprehensive product range, small fast growing innovative company, collaboration with Moeller Top challenges: Turck could get a competitor in the long run, develop a broader portfolio, leverage economies of scale, dependency on Moeller
Company: NEC
Web: http://www.nec.com
Key Products
PC technology, commercial and industrial

Regions
Asia; China;
Description
NEC Corporation was founded in 1899 and is based in Tokyo, Japan. The consolidated net sales for the fiscal year ended March 31 st 2009 were 4,215.6 billion. The main operating units of the NEC Group IT Service,IT Products, Network Systems, Social Infrastructure, Personal Solutions, and Electronic Devices. NEC was heavily affected by the poor overall economic performance of its home market in 2008 and 2009. Even though NEC is a globally oriented company they focus their IPC business in manufacturing nearly primarily on Japan. NEC represents a large part of the supply chain in silicon products. They not only offer silicon products like Chips, e.g. for IO link or consumer electronics, but also products and systems for e.g. visualization in manufacturing plants.
Key Partnerships: Oracle, Microsoft, bea, hp, EMC, Cisco Systems, Foundry Key Acquisitions: None to report
Top strengths: high production depth, focus on silicon, Asian markets Top challenges: price pressure
Company: Nematron
Web: www.nematron.com
Key Products
Rack (RM1400), box (nPC200 Series, SB600/800 Series), and panel (ePCSeries, ePC-Plus Series) industrial PCs.
Regions
North America; Europe, Middle East & Africa; Asia; China; Latin America; India
Description
Nematron designs and manufactures PC-based industrial automation products that include software for logic control, process visualization, SCADA, process control and data acquisition. Nematron products cover a broad spectrum from low-end operator inter-face to Windows based control software. During the 1990s Nemarton grew strongly and aggressively acquired a couple of companies to form an integrated supplier for Hard- and Software for automation. Nematron designs and manufactures open, PC-based industrial automation hardware products. Nematron products are designed for reliability in the harshest operating environments and are easily serviceable using standard tools for minimum downtime. Nematron was one of the founders of the Industrial PC movement. Nematron has outsourced manufacturing of all its computers to Solectron of Columbia, S.C. The company itself shall focus on hardware and software design, not manufacturing. Solectron, a multi-billion dollar global electronics manufacturing service provider, assembles computers for IBM, HewlettPackard and Dell Computer. Nematron has also cut a deal with AT Computers in the Czech Republic to make its products under license in Europe. The line of products include standard industrial PCs in various housings: Rack (RM1400), box (nPC200 Series, SB600/800 Series), and panel PCs (ePC-Series, ePC-Plus Series) are available.

Top strengths: tradition in PC based control business Top challenges: regaining technological and market strength
Company: Pepperl + Fuchs

Web: http://www.pepperl-fuchs.de
Key Products
Complete set of factory and proximity sensors. Instrinsically safe isolators, zener barriers, signal conditioners, Fieldbus infrastructure, remote IO systems, HART interface solutions, level measurement, visualization, Sensors for hazardous areas.
Regions

Description
Founded in 1945 and privately held, Pepperl+Fuchs has an overall revenue of around USD 490 Million, 1/3 is created in process automation and 2/3 in factory automation. 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). In their factory automation business the main products are: AS-Interface, Barcode & Camera Systems, Capacitive Proximity Sensors, Inductive Proximity Sensors, Industrial Vision, Photoelectric Sensors, RFID Systems, Rotary Encoders, and Ultrasonic Proximity. One of the technological leaders, build most of their own sensors and have own distributor network, Pepperl+Fuchs stra tegy is to offer sensing solutions. During the last years their growth was mainly driven by acquisitions. To compete in the sensor business Pepperl+Fuchs is cutting production costs, so they moved to Singapore in 1989 and to Indonesia in 2000. Further penetrating the market for process automation and made panel PCs a key product. In this process Pepperl + Fuchs acwuired a company called Extec, Germany and Christensen Display Products, US to achieve a fast market entry. Christensen was acquired in late 2008 and is a suppler of industrial monitors. Extec is a supplier of panel PCs and operator panels for explosion areas and was acquired in 2005. The acquisition of Extec Oesterle GmbH was Pepperl + Fuchs reaction to the merge of automation layers. Panel PCs are a strategic product, even though they are not representing the major part of revenue. At the time of the acquisition Extec barely had thirty employees and no chance to enter the world market anytime soon.
Pepperl + Fuchs is leveraging it sales network to provide Panel PCs worldwide. The products included in this study are all standard panel PCs and include the following product series: VisuNet GMP, VisuNet, IPC-Ex. Panel PC VISUEX. The overall topic of intrinsically safe and Ex area automation is strong within Pepperl + Fuchs.
Key Partnerships: Partnerships: Partnership with GE Fanuc Automation. The partnership includes the delivery of Schnittstellen-Komponenten and focuses on Profibus technology. 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, Germany, from Cooper Crouse-Hinds, a division of Cooper Industries. The products manufactured by ISB including Remote I/O, Din Rail devices and Zener-Barriers components VMT Vision Machine Technology: Supporting growth, in the year 2006, P+F took over VMT Vision Machine Technic Bildverarbeitungssysteme GmbH located in Weinheim. VMT GmbH supplies turnkey solutions for the field of robot vision, robot guidance and machine vision, this extended the Factory Automation product range by high-end image processing systems.
Top strengths: strong positioned in process industries and discrete industries, focus on explosive areas Top challenges: leverage synergies between process and discrete business, leverage synergies between acquired companies, enlarge IPC business from explosive areas to other control applications
Company: Lanner
Key Products
EM- and LEC-series, ODM for other IPC suppliers, intermediate PC products
Regions
North America; Asia; China;

Description
Lanner Electronics Inc. was founded in 1986 and is a publicly listed company based in Taiwan and has additional offices in mainland China, and US. The company was formerly known as GES Taiwan and changed its name to Lanner Electronics Inc. in 1993. Lanner Electronics Inc. is a designer and manufacturer of frontline network security, network video and embedded computing platforms. Lanner faced a decline in revenue that started in 2008 (revenue in million USD: 29.0 in 2005), 38.2 in 2006, 63.5 in 2007, 56.0 in 2008) and continued through 2009. Lanners business model is to supply intermediate products to IPC and operator panel manufacturers. It also provides ODM services, which include engineering and manufacturing services; custom design and manufacturing services; and technical support services As products the company offers network application platforms (including x86 network appliances), network processor platforms, and network accessories. In this market research only the embedded and industrial computing products, including fanless computers, industrial control systems are included. Lanners line of slot cards, SBC backplanes, and embedded and industrial motherboards is excluded in this study.
Key Partnerships: Strategic alliances with Intel, Microsoft, Cavium Networks, Beijing L&S Lancom Platform Tech.Co.,Ltd, RMI Corporation, 6WIND, Storage Bridge Bay Working Group (SBB), and Stretch Inc. Key Acquisitions: None to report
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.
Company: Rockwell Automation

Web: http://www.rockwellautomation.com/
Key Products
Embedded box and panel IPCs, standard panel, box, and rack mount IPCs; SoftLogix5800 Controller Complete line of PLC products: Nano PLCs (Pico controller), micro PLCs (MicroLogix and CompactLogix), small PLCs (ControlLogix and SLC 500), large PLCs (ControlLogix and PLC), and PanelView series of operator panels
Regions
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. The company focuses on addressing customers business needs to form automation solutions through partne rships with a large network of local companies in distribution, services, and software around the world. With headquarters in Milwaukee, Wisconsin, Rockwell Automation has two major product lines, Allen-Bradley and Rockwell Software, which offer automation solutions that include control and information platforms, industrial components, intelligent motor control and global manufacturing support services. 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, systems, and services in North America. In addition, around 50 percent of the companys total revenue is now coming from their non-US operations. Having a strong financial position, Rockwell Automation continues to acquire expertise and invest in innovation and aggressive research and development. Through a global transformation of its business processes and the underlying information systems that support them, the company has simplified and increased collaboration to better serve its customers and
achieve its growth goals. The companys long-term strategies include providing business-driven solutions, Six Sigma practices, and a performancedriven culture to solve customer challenges. Rockwell Automation offers the complete range of PLCs. The Logix control platform, which is classified as a Programmable Automation Controller (PAC), provides a single control platform for discrete, drives, motion, and process control systems. The ViewAnyWare visualization software could also enable the PAC to be used for visualization. The complete PLC line pushes the Operator Panel business, since they are often sold in a bundle. The PanelView Standard operator terminals offer the classic operate and monitor functionality. PanelView 'e' Operator Terminals are graphic Operator Panels, the PanelView Plus series adds functionality to the e and standard series. The PanelView Plus CE series adds the open platform flexibility of Microsoft Windows and is an Automation Panel. The complete Rockwell Automation advantage includes seamless integration with the full suite of Rockwell Software solutions, including Integrated Architecture and FactoryTalk View software. Combining Rockwell A utomation hardware with its software assures comprehensive application support from an industry leader. 6180P Integrated Keypad is and embedded panel PC that either functions as an operator panel or an IPC. 6181 P/F (performance and standard option) are standard panel IPCs and are both using Windows XP Professional as an operatong system. 6155R/6155F 200R is a box PC that has the option to be Din Rail mounted and also embedded. 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. Rockwell offers the 6181H, 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 Automations PAC line. IT is classified here as an embedded panel PC. Rockwell Automation offers a large line of accessories that include monitors, industrial keyboards and mice, and mounting hardware.
Key
Partnerships:
OSIsoft,
Samsung,
Omron,
Weidmller,
En-
dress+Hauser; Relationships with Intel, IBM, Moeller, and Cisco for collaborative manufacturing solutions. Key Acquisitions: Xi'An Hengsheng Science & Technology Company Limited, a privately held engineering firm. Xi'An Hengsheng Science & Technology delivers automation solutions to the electrical power and other heavy process industries in China. CEDES' Safety and Automation Business, Incuity Software, Inc., (Enterprise Manufacturing Intelligence (EMI) software), Pavilion Technologies (model predictive control), ICS Triplex (process safety, ISaGRAF), ProsCon Holdings Ltd., (process industry solutions); Datasweep and Propack Data (manufacturing solution software), the controller business of Samsungs Mechatronics division, Tesch GmbH (saf ety relays), EJA (safety products), Entek IRD (condition monitoring), batch software business of Sequencia (RPM Series), SMC (shop floor scheduling and simulation), PowerAutomation GmbH, Interwave Technology. Rockwell Automation recently acquired Rutter Hinz Inc., an engineering company with expertise in industrial automation, process control and power distribution, specifically for the Oil & Gas industry, in addition to the pipeline, utility, mining, forestry, and food and beverage sectors. The acquisition accelerates the growth in Canadas heavy industries and oil and gas market, enhances Canadian oil sands opportunities, and strengthens global project management and engineering solutions delivery capabilities.
Top strengths: Broad range of products, Logix PAC platform, good strategic focus and aggressive execution of strategies Top challenges: Penetrating the European market.
Company: Schneider Electric

Web: http://www.schneider-electric.com/
Key Products-
Schneider Electric Brand Name Pro-Face Brand Name: Digital Electronics brand name:
Regions
Description
The revenue and products reported here include the products from telemecanique, Pro-face, Digital Electronics, and products that use the Schneider electric Brand name. Schneider has a strong corporate geographic balance to support its long history of success and concentration in the industrial automation market, Schneider Electric continues to invest in its automation business. Since Schneider Electric invented the PLC in the late 1960s (Modicon), 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. Schneider Electric organizes its automation business to assure focus on its customers business success. Schneider Electric will marshal its resources to help enable customers to reduce engineering costs, increase real-time operating efficiency, increase flexibility, and safety, and continuously improve productivity. In that respect, Schneider Electric has developed collaborative automation as a differentiating value since the early 1990s. 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. Schneider Electrics bias toward open technology choices is evident in the industrial communications area, where Schneider Electric has been the first mover with Ethernet for communications fieldbus as widely implemented
through Modbus/TCP. Soon thereafter, Modbus was released as a public standard (www.modbus.org). With a strong solutions orientation as the guiding principle, 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. Schneider Electric also carefully handles the migration path for Schneider Electric automation and control products and solutions among existing Schneider Electric customers. Digital Electronics Osaka, Japan was founded in 1972 as digital Electron Corporation and named itself digital Electronics since 1973. Digital Electronics employs over 1100 people and has estimated annual revenue of USD 280 Mio. Since 2002 Schneider Electric controls this company and owns 98.7 percent of all shares since December 31 st 2003. Operator Panels with the Pro-Face brand name are produced in Wuxi, China. Xycom is also a part of Digital Electronics and after the acquisition adopted the Pro-face brand name. ProFace was the first company on the market with operator panels and has been the market leader for a long time. Still ProFace is internally more focused on panels than on industrial PCs, which are also part of its portfolio. The magelis IPC series from Schneider is reduced to some core products, especially Panel PCs. In addition to the Panel PCs, Schneider Electric also offers a Box PC (Control box 102 and 402) that could be used as a stand alone PC, or be combined with a screen to a modular panel PC. 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.
Key Partnerships: Sun Microsystems, Toshiba, Clipsal Industries, Tatung, Brooks Automation (semiconductor wafer fabrication solutions), Gira for Building Automation. Key Acquisitions: Intelligent Motion Systems (IMS), Pelco, Citect (HMI/SCADA, production management software), Crouzet Automatismes, SIG-Positec (Swiss), Square D, Modicon, Telemecanique, Merlin Gerin, Elektropstroj Psek (Czech), SIG-Positec & Berger Lahr (stepper motors), TAC AB (building automation systems), Kavlico (Sensors), Nu-Lec, ELAU
(packaging machinery controls), Lexel Concern (electric installation material), Digital Electronics (Japan), Conlog (South Africa), Crompton Greaves (India), Samwha SEOCR (Korea), Andover Controls (Building Automation Systems), VA TECH ELIN EBG (Austria).
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, sensors, PLCs, HMI/SCADA, drives; 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
Company: Siemens
Key Products
Embedded PCs (Embedded Box PCs: SIMATIC IPC427C, and embedded Panel PCs: SIMATIC HMI IPC477C), standard IPCs (Rack Mount: SIMATIC IPC547C, SIMATIC Rack PC 647B, and SIMATIC Rack PC 847B , Box: SIMATIC Box PC 627B, SIMATIC Box PC 827B, and Panel: SIMATIC Panel PC 577B and SIMATIC Panel PC 677B series). SIMATIC family: S7, WinAC, WinCC, PCS 7, SIMATIC IT, ET 200, LOGO!
Regions
Description
Siemens AG (Berlin and Munich) is a global provider of electronics and electrical engineering, operating in the industry, energy and healthcare sectors. The company has around 430,000 employees (in continuing operations) working to develop and manufacture products, design and install systems and projects, and tailor a wide range of solutions for individual requirements. In fiscal 2008, Siemens had revenue of 77.3 bil lion and a net income of 5.9 billion (IFRS). The Siemens Industry Sector (Erlangen, Germany) is the worldwide leading supplier of production, transportation, building and lighting technologies. With integrated automation technologies as well as comprehensive industry-specific solutions, Siemens addresses the productivity, efficiency and flexibility of its customers in the fields of industry and infrastructure. The Sector consists of six Divisions: Building Technologies, Drive Technologies, Industry Automation, Industry Solutions, Mobility and Osram. With around 222,000 employees worldwide Siemens Industry posted in fiscal year 2008 a profit of EUR 3.86 billion with revenues totaling EUR 38 billion. Siemens has long been is the leading PLC supplier worldwide. 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. Siemens sheer size, combined with a comprehensive range
of products and solutions, provides Siemens with a unique competitive position. Siemens strategy is to offer customers the benefits of dealing with a single, financially secure supplier for all electrical products including automation, drives, switchgear, control gear, and motors. Siemens Industry sector is responsible for the design and production of a wide range of automation products, including controllers, industrial PCs, Operator Panels, drives, an array of low voltage products and peripheral products, and software ranging from configuration and programming to PLM systems. The key concept behind this is called TIA: Totally Integrated Automation. To keep this concept up to date Siemens acquired the software companies UGS and Innotec. Siemens provides a line of embedded PCs (Embedded Box PCs: SIMATIC IPC427C, and embedded Panel PCs: SIMATIC HMI IPC477C), standard IPCs (Rack Mount: SIMATIC IPC547C, SIMATIC Rack PC 647B, and SIMATIC Rack PC 847B , Box: SIMATIC Box PC 627B, SIMATIC Box PC 827B, and Panel: SIMATIC Panel PC 577B and SIMATIC Panel PC 677B series). In contrast to many other suppliers Siemens offers decentralized architecture as a product (those products are therefore also Panel PCs). One of they key advantages is the modular design that Siemens leverages to provide custom solutions in small batches. 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. 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. In addition to the extensive line of industrial PCs, Siemens is providing operator and automation panels. Siemens automation panels (Multi Panels) are very open and merging in capabilities with embedded Panel PCs.
Key Partnerships: Yaskawa, Fuji Electric Key Acquisitions: Flender, Robicon, Orsi, VATech, Moore Products, Milltronics, Flow Division of Danfoss, US Filter, UGS, Innotec
Top strengths: Broad automation portfolio, a strong identity as a discrete controls company with a growing presence in process automation, and a significant presence in fast growing markets, such as India and China Top challenges: Maintain a strong position in fast growing markets such as China, India, and Russia
Appendix A
Appendix A: Methodology
Over the past two decades, ARC Advisory Group has become the leader in providing in-depth and accurate market intelligence for the industrial automation marketplace. From the beginning, our corporate goal has been total client satisfaction. We have continuously strived to refine and improve our vision of future plant automation systems. To meet the growing need for global market intelligence, we have recently expanded our services to cover the international marketplace. ARCs research database is based on thousands of user surveys, telephone interviews, plant visits, and in-depth profiles of hundreds of suppliers and users. Our extensive network of industry contacts has been an invaluable asset in filtering out long-term trends from fads. Our consultants are skilled in analyzing and forecasting the impact of new technology and products on plant automation systems. We systematically study each market segment before developing specific recommendations for our clients. ARC consultants follow technology and industry events on a daily basis, and have a broad range of expertise in all areas of industrial automation, including sensors, control systems, networks, computers, software, and services. We are experienced in working with all types of manufacturing processes including continuous, batch, discrete repetitive, and job shop. Each year, ARC consultants attend the most important trade shows around the world. In addition, ARC consultants attend press conferences held by most major suppliers and review hundreds of news releases each year. ARC consultants then sort out real and long lasting trends in the marketplace. ARC uses a five step approach to conduct global market research for the industrial automation marketplace. This approach provides our staff with a solid framework to formulate meaningful strategies for our clients. 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. The following contains a brief description of how we conduct each of these five steps.
Copyright 2009 ARC Advisory Group ARCweb.com For Internal Use Only A-1
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. Key secondary sources researched include the following.
ARC Database
ARC maintains a proprietary database on the industrial automation marketplace. This database provides our staff with a solid base to start their research project. 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, as well as an extensive library of directories and books. We are on the news and product release mailing lists of every key user and supplier in the marketplace today. We sort and file important news and articles for future use. 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, catalogs, data sheets, application notes, and price lists from all known or potential manufacturers and suppliers of products pertinent to a study. We also request the following financial reports when needed: Annual reports
A-2 Copyright 2009 ARC Advisory Group ARCweb.com For Internal Use Only
Appendix A
10K statements Prospectus and investment analyses Our studies evolve rather than being forced. This assures you that the results are accurate, up-to-date, and meaningful.
Step 2: Identify Key Issues

After discussions with clients and a careful review of all secondary information, ARC developed a list of key issues concerning both users and suppliers. In terms of elapsed time, ARC spent several weeks discussing issues pertinent to this study with the leading suppliers. We also capitalized on information contained in our previous market research reports and seminars on process control.
Step 3: Gather Primary Data

Supplier Survey and Interviews
First, 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. Then we conducted telephone interviews with key individuals at all major suppliers. Where possible or necessary, we interviewed more than one person at each company to verify the accuracy of the information. 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. 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. Open systems implementation plans and preferences of the company.
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, sensors, computers, software, and systems integration. Enterprise-wide integration plans and strategies of the company by geographic region. Company preferences for different types of control systems, computers and software.
Step 4: Data Analysis

We organized and entered all gathered data into a computer database. The data was verified, sorted and cross-tabulated in numerous ways to filter out industry trends and answers to the key issues identified earlier. After analyzing all market data, we prepared preliminary market forecasts. At this time, we considered many alternative scenarios and tested them against some key criteria. Finally, we chose the most accurate scenario.
Step 5: Prepare Final Report

After finalizing market forecasts, we drew charts and graphs to get further insight into user needs and wants. We spent a considerable amount of time and effort to draw conclusions and sort out long-term trends from fads. Finally, after we considered many different strategic alternatives, we developed recommendations for the industry participants.
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. Our staff members do all our research work. The ARC staff has firsthand industry knowledge and experience. Our staff's average level of industry experience is over twenty years. ARC actively solicits inputs from suppliers and users throughout the duration of a project. Our experienced staff conducts all interviews - not someone with absolutely no knowledge of the industry. We encourage independent thinking by our staff members.
A-4 Copyright 2009 ARC Advisory Group ARCweb.com For Internal Use Only
Appendix A
We can identify key individuals for interviews quickly and accurately through our extensive network of industry contacts and data base. We can complete each task very efficiently through our use of automated resources.
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, 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, Tobacco, & Firearms Available-to-Promise
Copyright 2009 ARC Advisory Group ARCweb.com For Internal Use Only B-1
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, Own, Operate, 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 Indias Central Drugs Standard Control Organization Compact Disk, Read Only Memory Committee Draft Vote
B-2 Copyright 2009 ARC Advisory Group ARCweb.com For Internal Use Only
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 Committe 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, 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, 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
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, Measure, Analyze, Improve, Control Microsoft's Distributed iNternet Architecture Domain Name Service U.S. Department of Defense Design of Experiments U.S. 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
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, Middle East, Africa Electro Magnetic Interference Energy Management System Economy of Scale U.S. Environmental Protection Agency Electronic Product Code OR Engineer, 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. Federal Communications Commission Field Control System
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.S. 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
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, Ventilating, 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, Systems, 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
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, 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
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, 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, Inc. 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
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
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
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
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. 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
Appendix B
TL TM TMS TOP TPM TQC TQM TREAD TV 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 berwachungs Verein (Technical Inspection Association) Total Value of Ownership Unified Architecture Unified Application Framework Uniform Code Council Universal Description, Discover, 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
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, 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

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Industrial PCs Worldwide Outlook

MARKET ANALYSIS AND FORECAST THROUGH 2014

Project Team: Florian Gldner David Humphrey Paul Miller

Industrial PCs Worldwide Outlook Table of Contents

Industrial PCs Worldwide Outlook Table of Contents

Industrial PCs Worldwide Outlook Table of Contents

Industrial PCs Worldwide Outlook Table of Contents

Company: Company: Company: Company: Company: Company: Company: Company: Company:

Appendix A: Methodology Appendix B: Common Industry Terminology and Abbreviations

Industrial PCs Worldwide Outlook List of Figures

Industrial PCs Worldwide Outlook List of Figures

Industrial PCs Worldwide Outlook List of Figures

4-51 4-52 4-53

THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN

ARC Consultant Biography

Working with the Automation team on various studies and reports.

DEDHAM MA 02026 USA

THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN

ARC Analyst Biography

DEDHAM MA 02026 USA

Computer & Automation, Monthly ARC Essay

About ARC Advisory Group

DEDHAM MA 02026 USA

THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN

ARC Consultant Biography

Senior Editor/Analyst ARC Advisory Group 781-471-1141 pmiller@arcweb.com

Paul earned a B.A. degree from Emerson College in Boston, MA.

DEDHAM MA 02026 USA

Other Published Work

DEDHAM MA 02026 USA

Continuous Advisory Services

Market Intelligence Services

Investor Information Services

Merger & Acquisition Services

Partner Search Services

Industrial PCs Worldwide Outlook Executive Overview

Chapter 1 Executive Overview

Indicator Market Maturity Revenue 2009 Potential to 2014 Prices

Trend Slowly aging 8.8 % CAGR

Competitors Technical Change

Figure 1-1: Industrial PCs a Brief Market Overview

Industrial PCs Worldwide Outlook Executive Overview

three categories: embedded PC, standard IPC, and peripheral hardware.

Industrial PCs Worldwide Outlook Executive Overview

Market Size and Forecast

Industrial PCs Worldwide Outlook Executive Overview

Figure 1-4: Factors Determining Competitive Environment

Industrial PCs Worldwide Outlook Executive Overview

Figure 1-5: Full line Automation Suppliers

most diverse group in this analysis.

Figure 1-6: Focused Automation Suppliers

Industrial PCs Worldwide Outlook Executive Overview

IPC Portfolio Regional Spread Industry Split Examples Market Share

Several focus industries B&R, Beckhoff, National Instruments 23 percent

Figure 1-7: PC-based Control Suppliers

Taiwanese and Chinese PC companies are also trying to establish them-

Figure 1-8: Pure IPC Suppliers

Industrial PCs Worldwide Outlook Executive Overview

Figure 1-9: Specialized in Silicon

Industrial PCs Worldwide Outlook Executive Overview

% of Top Player 12%

% of Top 4 Player 42% 71% 52% 39% 14%

27% 19% 18% 14%