A rise in military spending, along with greater budget allocation for modernization of joint forces since 9/11, encourages the military power supplies market. Government knowledge of electronics in the battlefield increases and gives a significant boost to market growth.
New analysis from Frost & Sullivan (powersupplies.frost.com), North American Military Power Supplies Market, finds that the market earned revenues of $612.4 million in 2006 and estimates to reach $832.2 million in 2013.
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Following the decision to digitize the battlefield, radio communication equipment, night vision goggles and other electronic equipment become essential items in a foot soldier's backpack. The government is also likely to rely on alternate energy sources to save lives and costs.
"For instance, the U.S. Army is testing portable solar panels that can be layered on top of a tent and rolled up into backpacks," says Frost & Sullivan Research Analyst G. Vimal Krishna Kumar. "Tents using solar panels can provide up to 1 KW of energy, sufficient enough to power fans, lights, radios and laptops, and they can reduce the usage of diesel-powered generators."
The energy sources can be recharged using smaller flexible panels, which soldiers can unfold during the day to collect energy. This lessens the burden for soldiers since there is an increasing need to reduce the size and weight of electronic gear carried into battlefields.
"Increased use of light armored vehicles, tanks, fighter aircrafts, unmanned aerial vehicles, littoral combat ships and missile defense systems also expects to aid market growth," observes Kumar.
Despite these positives, the power supplies market will likely be challenged to widen its profit margins, as customized solutions in military applications see a fall in demand due to rising popularity of commercial off-the-shelf (COTS) products. This triggers price wars; users are content with the more proven COTS products than the lesser known customized ones.
This will adversely affect the power supplies market, as users will be reluctant to pay for the engineering cost involved in designing power supplies. This situation can be remedied to an extent by modifying COTS without compromising on military specifications and requirements.
"Major defense original equipment manufacturers (OEMs) begin to subcontract their power supplies from regular vendors, as it is a cost-effective solution and gives them exposure to a wide range of products," notes Kumar. "It also enables them to find manufacturers that could meet their custom design demands."
Since OEMs have to deal with specific requirements for various applications, they could do well to source the power supply from these niche participants.
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