UPS Hardware Revenues Down, but Services Continue to Grow, Says IMS Research

Dec 2, 2009 17:03 Nikkei Electronics Asia

The difficult year for uninterruptible power supply (UPS) hardware revenues continued in the third-quarter of 2009 (3Q 09) with global revenues down more than 20%; by contrast, UPS service and support revenues are forecast to actually increase in 2009 by over 5%, according to IMS Research.

3Q 09 marks the fourth straight quarter in which UPS hardware revenues have declined year-on-year. Some glimmers of nascent recovery were noticeable as UPS hardware revenues grew quarter-on-quarter at a rate of 7%. Jason dePreaux, senior research analyst at IMS Research, remarked, "Geographically, the UPS market recovery is predicted to begin first in the Americas next year to be followed by EMEA and Asia, though it will be several years before demand returns to 2008 levels."

Compared to the volatile performance of the hardware market, UPS service revenues have fared far better. Preliminary data from an upcoming study of this market shows that UPS service revenues grew at a double-digit rate in 2008 and continue to expand amidst the recession. There are several reasons for the strong performance according to dePreaux. "Perhaps most importantly is that the number of UPS active in the field continues to grow. More UPS units mean more service opportunities. To ensure maximum uptime, UPS must receive regular maintenance attention, which is even more critical as new equipment purchases have been put on hold and UPS service lives extended. Moreover, service providers have been increasingly aggressive in promoting maintenance contracts to end-users as hardware sales have slowed."

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