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China MeterNet News According to Frost & Sullivan, the global smart meter market has grown steadily in recent years. The total market size in 2012 exceeded US$3 billion and is expected to maintain a compound growth rate of more than 10% in 2017. Annually achieved more than $5 billion in total revenue. The steady development of the North American market will be the main driving force for the growth of the global market, and the European market will also be more mature.
The smart meter business is mainly divided into three pieces, which are instrument manufacturing, instrument data management, and instrument installation. Instrument manufacturing is mainly concentrated in developed regions, and some suppliers in developing regions provide lower-priced products. The price of meters ranges from $40 to $80. The business market for meter data management is relatively decentralized. The software and hardware in the management system often come from different suppliers. The average price per unit for data management services is between $10 and $20. The average price per meter of instrument installation is between 75 and 150 US dollars.
In general, as people pay more attention to the sustainable management of water resources, advanced water metering technologies are receiving more and more attention. The application of smart water meter technology is not limited by region, but the driving factors and limiting factors in different regional markets are not the same. At present, the main market for this technology is concentrated in developed regions such as North America and Europe. In developing regions, the application of smart metering equipment is generally still in the pilot phase to test the effectiveness of the technology. However, with the strong investment potential in the Asia-Pacific and Middle East regions, its smart meter market is expected to achieve further development. In order to be successful, market participants must have a thorough understanding of the market dynamics of each region and formulate development strategies that are appropriate for the region’s market based on corresponding characteristics.
Driver Analysis First of all, the loss of tap water is mainly caused by water theft and water leakage. It has always been a major problem facing tap water companies in various regions. As the terminal of the tap water system, smart water meters can closely monitor the details of tap water consumption and effectively reduce the loss of tap water.
Second, compared to conventional water meters, smart water meters can effectively improve the accuracy of metering and provide billing information to customers in a timely manner. For tap water suppliers, the remote metering capability of the smart meter can effectively shorten the meter reading cycle, thereby helping to improve the company's cash flow stability and promote the development of the company. For users, intelligent water meters can identify faults such as water leakage and metering errors in a timely manner, thereby effectively protecting the interests of consumers.
In addition, through the monitoring of water supply lines, the smart water metering system can help water suppliers fully and clearly grasp the water supply information and improve their overall level of water resources management. From a long-term perspective, with the continuous growth of population, smart water meter technology is of great significance for the sustainable management of water resources.
Finally, as an important component of the water supply monitoring system, smart water meters can effectively cooperate with other regional equipment such as water meters, water pressure control valves, and water pumps to help companies achieve comprehensive real-time monitoring of water supply networks. The company can thus adjust the parameters such as water flow and water pressure in a timely manner and optimize its water service.
Limiting Factors Analysis First of all, the biggest difficulty facing the smart meter industry is financing. Most of the waterworks are not well funded and usually a large part of their budget is spent on maintenance of the water supply network. To invest in new technologies, it is difficult to allocate funds or finance from the budget. Before investing heavily in the introduction of smart water meters, companies often start small pilot projects first, and the development of the smart meter market is affected.
Second, because smart water meters still belong to emerging industries, many aspects of their markets are still immature. Therefore, investing in this new technology poses certain risks to the company. For example, due to the current lack of understanding of smart water meters and the lack of authoritative relevant research, companies often have doubts about the profitability of products.
In addition, as the driving force of the development of the smart meter industry comes mainly from the market itself, rather than the needs of the water plant or government regulations, there are few industry materials issued by third parties in the market, such as technology assessment, supplier assessment, etc. Information often has a significant guiding significance for demanders.
In the end, despite the increasing attention given to technological advancement and operational automation by water companies in various countries, due to the fact that the overall distribution of the smart meter market is quite fragmented, companies will encounter difficulties in selecting suppliers and solutions. From the planned introduction of technology to the final signing of the contract to implement the project, it often takes a lot of time and effort for the enterprise.
Market Forecast It is expected that by 2017, the global smart meter market will show strong growth momentum. Its main driving force comes from the instrument production business, because the smart meter market is far from saturated, and the application of this technology will become more popular. However, the long-term strategic growth will be in the direction of meter data management and water integration. The increase in production and installation of new water meters will gradually weaken, but the demand for corresponding data management services will increase and the market will further develop.
During the forecast period, the prices of various products or services including water meters, installations, and data management will remain stable. In the future, with the gradual expansion of the production scale of smart water meters, the installation efficiency of meters will gradually increase. And large-scale production centers will be more evenly distributed around the world, thereby reducing transportation costs. The emergence of China's smart water meter suppliers with lower production costs will not have much impact on the market. Because the market as a whole is still in its infancy, it can accommodate more competition.
So far, the sales of large-scale smart water meters have been mainly concentrated in North America and Europe, and other areas are still in the pilot phase of the project. The successful experience in developed regions has increased people's attention to smart water meter technology, but sales in other regions have not yet seen significant growth. It is believed that in the future, with the major water supply suppliers in the developing regions successively taking the lead in introducing smart water meters, the technology will be more affirmed and its sales volume will be greatly increased.
Although the markets in Asia Pacific and the Middle East are still immature, they have great potential for development in the future. In particular, China and India, their policy support and asset privatization process are very beneficial to the development of the industry. Countries such as Indonesia and the Philippines also have considerable demand for advanced water supply technologies, and their smart meter market will continue to expand.
Global smart meter market analysis: Regional strategies determine success or failure
Introduction: The global smart water meter market has grown steadily in recent years. In 2012, the total market size exceeded 3 billion U.S. dollars, and it is expected to maintain a compound growth rate of more than 10% in five years, and to achieve a total revenue of over 5 billion U.S. dollars in 2017.
Figure 1 Global smart meter market revenue, 2010-2017E
Source: Frost & Sullivan