The market for uninterruptible power supply (UPS) in Southeast Asia was upbeat last year and this optimism is expected to prevail up to 2016, according to market analysts Frost & Sullivan.
However, while UPS service providers are also expected to benefit from this market demand, Frost & Sullivan also warns of risks due to economic realities and competition.
The UPS market generated US$82.3 million last year, according to Frost & Sullivan's news analysis titled 'Analysis of the Southeast Asian Uninterruptible Power Supply (UPS) Services Market'. This market is expected to increase to US$117.6 million in 2016 due to an increasing awareness among customers of the need for UPS.
The winners in this upbeat UPS market are actually the service providers as purchases of UPS units are usually accompanied by annual service contracts which are often extended. "These contracts keep the existing client base active and guarantee a continuous inflow of revenue," said Frost & Sullivan.
But the forecast is not all rosy as the market trend can be affected by the prevailing economic volatility and increasing market competition, which has led to a price war.
"Apart from original equipment manufacturers, several third party service providers are entering the market with competitive pricing," said Suchitra Sriram, program manager, Frost & Sullivan. "Nevertheless, the gradual rise in the spending capacity of customers have eased price pressures and enhanced the demand from large-sized banking and IT sectors."
Last year, the industrial UPS service market accounted for a sizeable revenue share compared to the commercial market. But the consumer market is also catching up.
The demand in the region for superior power quality and efficient systems has also boosted the sales of UPS, noted the Frost & Sullivan analysis.
"Almost all infrastructure designs factor in the need for back-up power and incorporate at least the most vital back-up power system that can enable an orderly shutdown of all essential systems," noted Sriram. "Further, the overall increase in production capabilities, especially in high-technology applications, has spawned significant demand for UPS systems and thereby, UPS services, keeping the market vibrant."
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