LEADING INDUSTRIES FOR HARD-WIRED SURGE SUPPRESSORS IN NORTH AMERICA

Government facilities, particularly military and scientific, must be protected as they also contain electronic equipment that must be protected to insure the continued operation of their local, state, and federal level operations. The emergence of home networking is also influencing growth as homeowners seek whole house protection for their computers, audio/video/satellite devices, and home appliances. VDC believes that the residential market will provide hard-wired vendors with significant growth opportunities in the near future.

Natick, Massachusetts - February 24, 2003 - Over the past two years, the North American market for hard-wired power line surge suppressors has leapt to new heights, averaging 9.8% annual growth. According to recent analysis by Venture Development Corporation (VDC), this market growth rapidly abated in 2001 and is expected to decline in 2002. Setbacks in the North American economy, especially that of the U.S., have significantly impacted the hard-wired surge suppressor market, though this is not a long-term trend. Deregulation, grid reliability, and power quality issues are beginning to affect the bottom line of companies in a variety of industries. As these companies realize the benefits of surge suppression and slowly recover from a recessed economy, they will create demand for the hard-wired market.

Shown below is consumption of hard-wired surge suppressors segmented by major industry. VDC determined that the largest markets for hard-wired surge suppressors were the same as in 1999: industrial, education, and telecom. The telecom sector was devastated in 2001, but nonetheless, these companies must protect the very expensive equipment that operates their networks. These companies spend a great deal on hard-wired surge protection since they realize that the impact of a catastrophic failure on the general public would be disastrous. In addition, the costs associated with surge protection are most certainly passed on to the end user.

Education was also a large industry segment as many schools and universities possess a large number of electronic equipment such as PCs, faxes, and other equipment which require surge protection. Users at these facilities deem it vital to protect this equipment for both safety and public concerns. Government facilities, particularly military and scientific, must be protected as they also contain electronic equipment that must be protected to insure the continued operation of their local, state, and federal level operations.

The emergence of home networking is also influencing growth as homeowners seek whole house protection for their computers, audio/video/satellite devices, and home appliances. VDC believes that the residential market will provide hard-wired vendors with significant growth opportunities in the near future.

North American Hard-Wired Surge Suppressor Consumption Segmented by Industry/Applications (Percent of Dollars)

2001 Total: $232.1 Million

Industrial: 26.00%
Education: 12.90%
Telecom: 11.80%
Government/Military: 8.70%
Datacom/Networking: 8.00%
Retail: 7.10%
Medical: 6.80%
Utilities: 5.70%
Financial: 5.40%
Internet: 4.10%
Residential: 3.50%

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To view the entire press release including charts go to
http://www.vdc-corp.com/power/press/03/pr03-16.html

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VDC believes that future growth opportunities can present themselves to vendors that target and expand their penetration into other industries such as banking and financial, medical/health care and retail. Any business that depends on sophisticated electronic equipment, and experiences downtime due to surges or spikes presents devastating economic costs, is a potential target for vendors.

ABOUT THE STUDY

This report, "The 2002 Power Protection Market Intelligence Program: Volume IX & X North America & Europe Power Line Surge Suppressors", is a multiclient study designed to provide subscribers with relevant and up-to-date market intelligence to support strategic marketing and product planning decisions. This report includes:

- Forecasts by product categories, major applications, major industries, country, channels of distribution, product features, etc.;
- Major issues, technology trends, and end-user needs that affect the future of this market;
- Discussion of the industry structure and the influences generated by the various types of participants;
- North American and European vendor shipment levels and market share data by product categories;
- Detailed profiles on the leading North American and European suppliers of power line surge suppressors; and
- Recommendations providing insight into current and future market opportunities in this highly competitive marketplace.

Venture Development Corporation, a technology market research and strategy firm, was founded in 1971 by graduates of Harvard Business School and MIT. Over the years, VDC has developed and fine-tuned a unique and highly successful methodology for forecasting and analyzing dynamic technology markets. VDC has extensive experience in providing analysis in electronic components markets. This includes multiclient and custom consulting engagements in a broad spectrum of related topics including switching power supplies, uninterruptible power supplies, fuel cells, static transfer switches, and others.

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Report Availability
http://www.vdc-corp.com/power/annual/02/br02-39.html

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For further information about "The 2002 Power Protection Market Intelligence Program: Volume IX & X North America & Europe Power Line Surge Suppressors", contact:

Matthew Goodwin, Project Manager - mattg@vdc-corp.com

Marc Regberg, Senior Vice President - msr@vdc-corp.com

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