Automation World: In interviews with end-users and others, the subject of pricing for wireless instrumentation and devices has come up. People have stated that the prices on these wireless products are too high to support a large market. One user even said that the price of a wired solution is less expensive, in some cases, than installing a wireless solution because of the high cost of wireless devices. Another said that for applications such as tank level and temperature measurement and control, for example, the best, most accurate RTD device is not what is needed, but rather something economical...and yet, only the top-end, most expensive devices are available with the wireless option.
Please address this issue. Is it correct that only high-end, more expensive devices from your company are available with wireless today? What is your company’s philosophy and game plan on wireless pricing? Will wireless pricing come down? When and how fast?
Bob Karschnia, Vice President, Wireless, Emerson Process Management: In terms of supporting a large market, that all depends on how you define your markets. We have seen that in our base markets (oil & gas, refining, chemical, power, mining and others), the pricing is well accepted due to the large cost savings you can achieve. For industries that do not have needs for hazardous area approvals or lesser environmental needs, then that benefit is reduced. This is true for a lot of our products, not just wireless.
In general, we don't provide product roadmaps without a nondisclosure agreement due to the competitive nature of the industry. I can, however, help with this a little bit by saying that pricing for most new technologies starts out high and as volume increases, prices drive down naturally. Additionally, Emerson has a strategy of tiering products so that there is a better price/benefit curve for customers with less demanding requirements. Wireless will follow that same trend over time.
Jeff Becker, Global Wireless Business Director, Honeywell Process Solutions: It's a good question. It is true that many of the industrial wireless field instruments on the market today are more expensive than their wired counterparts. If you think about it, a wireless field instrument needs everything a wired field instrument does, plus a battery, radio, antenna and an enclosure large enough to hold all the extra components. That said, the installed cost is generally substantially lower.
The exact pricing comparison between a wired and wireless installation naturally varies depending upon the specific installation. Varying factors include the distance to the nearest junction box, availability of wire pairs (and associated elements like junction boxes, cable trays, FTAs, I/O and the like), whether or not a hazardous area is involved, whether or not trenching or obstacles are in the way, the cost of labor, and the material standards for the site. What I can say is that, generally speaking, we have seen wireless installations to be significantly cheaper. There are other benefits to wireless beyond up-front capital cost savings as well, things like speed of implementation and flexibility.
To give a concrete example, we recently quoted a complete tank farm gauging project to a customer in the Houston area, about 60 tanks. While the wireless hardware was more than the wired hardware, the total turnkey cost to implement the project using wires was roughly double the cost of a wireless approach.
That said, the Honeywell philosophy is to use the right tool for the right job. We don't sell a single line of wireless sensors; we actually have three different families (with different performance and price points) to meet different needs. Our XYR 6000 family is our high performance line, giving wired performance in a wireless world. Our XYR 5000 line is somewhat lower performance that is more suitable for monitoring-only applications, but at a lower cost. Finally, our XYR 3000 line of wireless I/O allows wireless communications at an extremely compelling price point. So we have flexibility in terms of being able to offer the customer several different solutions depending on their budget and performance requirements.
Related Feature - Wireless Control in the Process Industries: Blasphemy or Common Sense?
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