AutoID & Data Capture Blog

5G Edge Infrastructure Market Growing Rapidly Ahead of Standardization

A Picture’s Worth a Thousand Words, and More Margin…

VDC’s been bullish on imaging solutions for years.  Our estimates and forecasts have shown that this segment of the data capture market has grown faster than other segments, and with good reason: imaging solutions enable deploying enterprises to extend the value proposition associated with those applications they support, providing tangible benefits that resonate with users. 

Translation:  The intelligent application of imaging is making money for deployers. 

Each year we interview leading data capture companies about their performance in the previous year, and their expectations for the coming year in support of our AIDC segment offering analyses: Global Barcode Industry Business Planning 2010 Market Intelligence Service.  2009 was a challenging year for nearly all of the AutoID suppliers we’ve interviewed.  Stalled projects, store closings and enhanced supply chain capacity challenged suppliers and their channel partners like never before, creating a global contraction of 21% for the data capture device (scanner) category and unprecedented pricing pressure for those suppliers competing for large-scale deployments.  These challenges caused channels to offer pricing concessions on their core offerings that may take them years to recover. 

What’s surprising in the data we’re seeing is not that imaging solutions continue to outpace investments in laser technology (laser is still the dominant technology), but the pace at which investments in imaging solutions are scaling.

In fact, in the middle of the worst global economic crisis since the Great Depression, demand for imaging data capture solutions actually increased by 8.1% in 2009 compared to 2008.  That might not seem like impressive growth until you consider that investments in laser, linear imaging, and pen/wand devices were down 23.5% for period. 

This begs the question, what’s driving all that demand? 

Without question, increased usage of 2D/ matrix symbologies and associated standards like the UID mandate have a lot to do with it.  But we think the story is really about new benefits that can be bolted onto traditional scanning applications that dramatically extend the value proposition associated with these applications.  After all, not many enterprises were interested in or prepared for experiments in 2009. 

Think about the core value propositions of scanning in a traditional POS application: the elimination of manual data entry and real-time inventory management.  Now think about how these value propositions can be extended by signature capture, auto-forms population, age verification, merchandise returns, etc. 

What’s exciting about these application extensions is that they create opportunities for deploying enterprises to capture more information about more customers and prospects that, when applied intelligently, that can help them enhance their customers’ experiences, and gain share of their wallet. 

For suppliers, imaging solutions can help them grow their share of deployers related IT spend, including accessing demand for software and value added services.

Who will be most adept at riding this wave?  From our perspective, those suppliers supporting the following strategies and tactics may have access to the greatest potential:

1. Systematic cultivation of relationships with independent software vendors
2. Offerings supported by SDKs that a broad community of stakeholders can use
3. Dedicated product management teams, well integrated with vertical/ industry market teams and their programs. 

These companies and their qualified integration partners stand to grow the fastest. 

We’re excited by the promise of imaging and we love to see it scaling.  If your company is using imaging technology in new ways to address emerging opportunities, we’d love to hear about it, and so would our readers. 

Please share your perspective with us!