Strategic Analysis of the Australian Uninterruptible Power Supply (UPS) Markets

Better Quality Products to Prevail over Imported, Inexpensive UPS Units

The increasing prevalence of inexpensive, non-branded, imported uninterruptible power supply (UPS) units is initiating price wars in the less than 3 kVA range market segment. The price-based competition is creating an adverse impact on the margins of market participants. However, in the higher-range kVA product segments, price does not have a similar influence over UPS purchase decisions. End users in these segments place greater importance on quality, reliability, and service, which are not provided by the non-branded products from countries such as China and Taiwan.

This Frost & Sullivan strategic analysis service provides an overview and outlook for the Australian UPS markets. The study has been segmented into products with less than 3 kVA, 3 kVA to 15 kVA, 15.1 to 100 kVA, and 100 kVA and above. Trends in market size and share are also included. This study enables the development of marketing and communication strategies to enhance companies’ market shares. It also allows for the development of effective competitive strategies across the low and high range kVA market segments.

Strong Economy and IT Sector Expansion Drive the Market

Australia’s robust economic growth is expected to continue through 2004 to 2008, at an average rate of 3.5 percent. Such sturdy development is set to translate into higher UPS unit sales, as businesses remain confident of the overall buoyancy of the Australian economy. Moreover, the IT sector is also likely to experience double-digit growth in the range of 12.0 to 15.0 percent. Although the majority of investment is likely to be in the IT services and software sector, investments in hardware can still have a positive impact on the demand for UPS units.

Apart from economic indicators, there appears to be an improvement in potential end-user awareness of the importance of UPS units for power protection. "End users such as government departments, financial institutions, and hospitals that operate critical systems are fully aware of the importance of a UPS unit to the continual functioning of their systems," says the analyst of this research. Even the small office home office (SOHO) and individual user market segments have recognized its benefits, and hence, sales in all these segments are likely to receive a huge boost.

Market Dominance in the Low kVA Range Does Not Translate into Success in the High Ranges

The success of even market leaders that hold significant shares in the less than 3 kVA and the 3 kVA to 15 kVA range is not replicated in the higher range of UPS units. In the lower ranges, channel partners dominate sales, whereas in the higher ranges such as 100 kVA and above, it is based on direct sales and UPS companies leverage on relationships developed by them with the end users.

"This suggests that market dominance and reputation in the lower kVA ranges do not guarantee market share and presence in the higher kVA ranges," notes the analyst.