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Mountain View, CA, United States, 2009/12/30 - The biochip industry comprises an integration of various platforms, including microarrays, microfluidics, and biosensors, which converge because of the fundamental principle of economies of scale.
The economies of scope merge well with the massive biological information that is available at the genetic and protein level. Taken together, the biochip industry has a lot to offer in terms of being an effective support function for basic research. Economies of scale are of great consequence for the biochip market considering the competitive nature of the technologies in this space.
New analysis from Frost & Sullivan (technicalinsights.frost.com), Assessment of Innovations in Biochips, finds that in recent times, there has been a clear directional shift toward point of care diagnostics and multiplexing of biological reactions, which has given rise to the development of intelligent diagnostic systems. The biochip space is an emerging area and in a sense, an outcome of the need among life scientists to possess competencies that would allow effective experimentation and thereby work around obtaining results rapidly.
If you are interested in a virtual brochure of this study, please send an email to Sarah Saatzer, Corporate Communications, at sarah.saatzer[.]frost.com, with your full name, company name, title, telephone number, company email address, company website, city, state and country.
"The scale of reactions that can be carried out on a biochip clearly has a dominant appeal in terms of acquiring popularity among users, and that in essence, affects the pricing strategies of companies in this arena," notes Technical Insights Senior Research Analyst Bhuvaneashwar Subramanian. "Users are looking at increased scalability of technology and who ever is able to match the competency in scalability with effective pricing strategies would emerge as a winner."
Biochip manufacturers are differentiating themselves through technology with the emphasis revolving largely around the size of the chip, number of genes that it can accommodate, and throughput time. Costs escalate with the coverage of the technology. This affects manufacturing costs and the utilization of resources.
It is critical for companies to ensure optimum use of technology to reduce manufacturing costs. Companies must resort to competitive collaboration to garner useful benefits from the technology. Acquisitions are appropriate in an industry where products are standardized and companies are vying for market share.
"In the wake of economic recession, it is important for biochip companies to position and employ their resources accordingly," says Subramanian. "Given that acquisitions are rampant in the space and funding around emerging technologies is largely limited, it is important for companies in the space to consolidate and focus on key business areas that can lead to marketable products in a short span of time to gain fiscal support."
Differentiation in technology through healthy competition among rivals is going to be vital for the creation of diverse options for the customer. Eventually, while all companies strive to achieve monopolistic control of the market, from a technology perspective, it is likely to limit consumer choices. This is because it can create indiscriminate pricing and redundancy of technology with increased barriers of entry, which are expected to be the eventual fallout of stiff competition.
To sustain in this scenario, companies must pay more attention to strategic alliances and partnerships, which can expedite the overall penetration of the technology and enhance growth. At present, entry into the biochip industry may not be advisable because of poor funding for new projects. The focus must be around strengthening core innovation capabilities and more importantly, engaging in extensive university collaboration to build upon strengths and eliminate weaknesses. Pursuing such initiatives can ensure better acceptance of the technology once the economy recovers sufficiently to support the growth of new industries.
Assessment of Innovations in Biochips, a part of the Technical Insights subscription, analyzes the economic scenarios for biochip applications and the key driving forces and challenges and provides a comprehensive overview of solutions and technologies being developed in this domain. Further, this research service includes detailed technology analysis and industry trends evaluated following extensive interviews with market participants.
Technical Insights is an international technology analysis business that produces a variety of technical news alerts, newsletters, and research services.
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Assessment of Innovations in Biochips / D19B