Market niche affects imaging product design
Market niche affects imaging product design
Andy Wilson
Editor at Large
Systems integrators often build image-processing systems by incorporating off-the-shelf OEM products such as motherboards, frame grabbers, image processors, cameras, and other peripherals. This approach helps to reduce development time and lower the cost of the final machine-vision or image-processing design. Moreover, the recent price reductions of OEM products have meant that vision-system prices can now be further reduced, which should help suppliers sell more products. Under these market dynamics, however, vision-system vendors are finding that although product shipments are increasing, product prices and profits are dropping due to competition and increased customer service and support.
Challenge the establishment
To compound the problem, the imaging capabilities of new VLSI devices are enabling new companies to enter the vision marketplace at little cost. And, with no previous product lines to support, such companies are forcefully challenging well-established vision-system vendors. Whereas in the past many hardware vendors looked at software products as something that should be offered below cost, they have now been forced into the realization that they must team with or purchase software vendors to add value to their hardware offerings. At the same time, manufacturers are rapidly abandoning complex processor programming and integration in favor of easier-to-develop hardware and software combinations.
Such moves, however, can hardly be called proactive. Short of closing an established vision-system company and starting a new one, the market problems of price reductions and increased competition must be met head-on. Simply bundling hardware with software and offering such a package at a reduced price is not, in the long term, a viable solution.
Find a niche
In image processing, it seems, the secret to success may be finding a market niche and sticking to it. Many analysts cite Cognex Corp. as a good example. By focusing on machine vision for semiconductor inspection, Cognex has grown into a multimillion-dollar company in five years. Another imaging company, Videology, has also found a market niche. By integrating low-cost broadcast-quality cameras into systems, the company has accrued multimillion dollar sales.
Unfortunately, many companies that have focused on specific image-processing markets have not fared as well. Markets such as automated highway inspection and biometric identification have yet to materialize in a big way. Other markets, such as medical image compression, which use proprietary hardware or off-the-shelf image-compression ICs, have all but evaporated due to the increased processing capability of the personal computer. Rapidly changing market factors and technological changes will determine the success of an imaging product.
Consequently, vendors must find a specific market niche for their products. More important, though, they must perform focused market research to meet the key product features, prices, and services wanted by their customers. And before vendors build products, they should make sure that their market research reveals a reasonably large and valuable niche. In this way, vision-system vendors can ensure market success in a highly competitive field.