The U.S. utility meter market is growing at a pace of about 3% ayear, rallied by innovative vendors who are winning market sharewith communication-enabled, low-priced meters that offset thesingle-phase residential meters, according to a new researchreport.

The report, by analysts Frost & Sullivan, based in MountainView, CA., estimates that electricity, gas and water meter segmentsof the meter market will generate $1.03 billion by 2006, up fromthe pace of $864.8 million this year. By the end of this year, themeter industry is projected to ship more than 11.2 million meters,up from 1999’s 11 million total.

“In the past, vendors have had the luxury of modeling themselvesaround captive utilities,” said Patrick Hodges, a Frost &Sullivan analyst who worked on the report. “With the guaranteedrate of return disappearing, the traditional price model is alsodisappearing.”

The report found that even though the U.S. market is now leadinga “protected” existence, that soon will change, with worldeconomies moving in and creating competition. Because of this, thereport suggests that U.S. companies may need to reassess theirmarketing strategies, which may include lowering prices and usingmore creative marketing. These emerging energy management services,aggregators and energy service markets expect to see low prices,said the report, and will strongly resist buying “yesterday’stechnology.” Because the meter market is not subject to widedemand, only “bad decisions” and “missed opportunities” will createa loss in market share.

Hodges said that partnership ventures with electricalcontracting firms, field services and heating and air conditioningcompanies may provide new growth areas for meter manufacturers.Other opportunities also will follow from companies that are ableto develop methods of net metering, prepayment metering anddistributed generation, said the report.

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