A second year of strong growth: is this the exception or the new rule for the industrial PC market?

The industrial PC (IPC) market grew rapidly in 2014, faster than both the operator terminal and PLC markets. According to the latest figures from the free IHS Quarterly IPC Market Index the market posted strong double-digit growth in 2014. This comes despite declines in sales in EMEA and Asia Pacific in the third and fourth quarters. However these declines were more than offset by a strong start to the year in both regions.

George Dickinson, Analyst at IHS
George Dickinson, Analyst at IHS

This marks the second consecutive year the IPC market has grown strongly. In 2013, it grew by over 11%; recovering strongly from a slight decline in 2012, when the market struggled to overcome tough economic headwinds.

While two consecutive years of strong growth is not enough to be considered a trend, this is welcome news for suppliers. The IPC market is already over 60% larger than in 2009, when revenues declined by more than 11%; with a strong outlook at the start of 2015, the market is forecast to continue to grow.

Still, the question on many people’s minds will be; ‘is this level of growth sustainable?’ At first glance the answer might appear to be no. Similar markets such as the operator terminal and PLC market are growing more slowly, and it might be possible to write some of this growth off as being due to the market recovering from a previous weak year in 2012. However there is more to this picture than just these factors.

To answer this question properly, it is necessary to look at what is driving this growth. As computers continue to become more capable, more applications are created that industrial PCs can expand into. For example: single, connected IPCs can replace multiple PLCs. The PLC market is far larger than the IPC market, and many PLC users won’t even consider using an IPC; however, in some applications IPCs are beginning to displace PLCs, driving additional IPC market growth.

As IPCs continue to become more capable, however, there is always the danger that users will opt to buy lower-cost, lower-end IPCs that offer the same level of performance as would previously have been seen in a more expensive high-end IPC, which would result in falling revenues for suppliers. Fortunately for IPC suppliers, wider trends in industrial automation will help to drive demand for higher performance IPCs.

When trends such as Industry 4.0 are discussed, it is generally in terms of sensors, connectivity, and big data. This is all very well, but all this data that is being generated is of very little use in its raw form. Data needs to be analysed and then communicated to the correct machine or individual to be of use and to drive increased efficiency. This will place additional demands on industrial automation systems that, with their processing power and flexibility, IPCs will be ideally suited to meet. These additional demands will require considerable processing power and will mean that there will be strong demand for the new generation of powerful IPCs. This will help to drive strong revenue growth.

While these are far from the only drivers for growth in the IPC market, these factors indicate that there is potential for continued strong growth. While repeated double-digit annual growth rates might be the exception rather than the rule, it is highly probable that the quarterly measurements of the IPC market by IHS will continue to trend upwards for the foreseeable future.

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