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Global Wind Industry Faces Policy Hurdles Ahead

Pallavi Madakasira
Tuesday, July 20th, 2010

 

There are a few key factors that could affect the growth of the global wind industry going forward, namely; (1) the proposed China wind power equipment manufacturing industry access standards draft that is expected to pass by year end; (2) proposed FiT reductions in the Spanish wind industry; and (3) developing trends in the US offshore wind industry.

 

The Chinese Wind Industry’s proposed access standards draft is likely to lead to industry consolidation in the domestic Chinese wind market. This could potentially provide a more profitable market environment for the leading domestic and international manufacturers as the draft will likely influence and stimulate M&A activity and regulate the wind market by clearly defining manufacturing requirements and influencing overall quality of products manufactured by domestic suppliers. 

 

Proposed FiT reductions in the Spanish wind market are also likely to affect the competitive landscape as domestic players like Acciona and Gamesa will find it challenging to enter new markets. That said, other emerging markets like the Middle East, India, South America etc. are, for the most part, expected to absorb any potential shortfalls in demand in countries like Spain. In the US, the offshore wind opportunity is a strongly debated subject and, although an important trend to monitor, is not likely to influence global markets substantially near term.

 

With regards to global installations in the wind market and breakdown by geography, the Chinese wind market is currently leading the pack accounting for approximately 39.6% of global installs in 2009; one of the reasons for this being that many wind farms in China are considered installed even though they are not connected to the grid. Approximately 38-40GW were installed globally in 2009 and the industry is expected to grow (low to high 40s GW annually) in 2010 and 2011 despite anticipated changes to policies around the world.

 

 

 

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IVIG Growth in Check, But Space Reeks of Anticipation

pgresearch
Thursday, June 24th, 2010

The IVIG/plasma marketplace seems relatively stable at this time, despite a history of supply issues, rampant off-label use, and attempts at consolidation within the space. The PGR network reports slow and steady growth across the major players - BAX, CSL Behring, and TLCR, although parts appear to be moving in the direction of a major ramp-up.

Of the products currently available, subcutaneous formulations continue to gain share, but the true potential for the market lies in the ability of these products to treat neurological disorders, such as Alzheimer’s. Until this indication is granted FDA approval, insurance companies will attempt to contain costs from high volume off-label use. BAX, CSL Behring, and Talecris/Grifolz have all made efforts to expand their sales forces and ensure that product is available in the hope that when it is approved for Alzheimers they will be able to reap the rewards.

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Intersolar Munich - Key Takeaways

Pallavi Madakasira
Wednesday, June 23rd, 2010

Top 6 Takeaways from Intersolar Conference, Munich:

1. Global Demand: We believe that the global demand for 2H 2010 based on responses from our experts could be anywhere between 5-6GW. Overall for FY 2010 it is clear that the year end rush in markets like Germany and Italy could swing the numbers between ~10GW on the low end up to 13GW. For 2011, our experts believe that it could be similar to 2010 or slightly slower. But if the global growth trends continue, 2011 could well be ~10-20% higher than 2010 global demand.

2. Demand From The Czech Republic, Benelux And The US: With great focus on countries like the Czech Republic, US and the Benelux nations in terms of global demand, we asked our experts about their expectation for these markets. Our experts seem to anticipate that the Czech Republic could be anywhere between ~700-800MW in 2010; Benelux nations to account for ~300-400MW and the US to account for as much as 400MW at the very least and up to ~900MW on the high end for 2010. As for the US market that is anticipated to be a growth market for PV in 2011 given the impending cuts in FiTs in other geographies, our experts believe that it could be ~1GW or higher in 2011.

3. New Application Status In Countries Like The Czech Republic And Italy: It appears that the Czech Republic is facing problems with regard to solar projects getting connected to the grid. But in Italy, new applications still seem to be accepted for solar project installations.

4. Pricing For Q3 and Q4 2010 For Wafers, Cells and Modules: As it regards pricing, it appears that prices for wafers, cells and modules are currently up. In Q3, cells and module prices are largely expected to be flat to slightly increase and in Q4, the expectation is that cells and module prices will be flat to slightly down.

5.Cell And Panel Cost Reduction: With regard to cell and panel cost reduction in Q3 and Q4 it appears that no significant cost reduction can be expected in Q3 or Q4 of this year.

6.Clarity Regarding A Possible National FiT In China: While it appears that our experts are anticipating a National FiT at some point in China to be announced, the time line for such an announcement seems unclear at this time. That said, it is evident that the domestic Chinese players stand to benefit the most if and when such an announcement is made.

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Latest Trends in Optical Networking: 100G & Next-Generation ROADMs

Rajan Varadarajan
Friday, June 18th, 2010

There has been a renewal of interest in optical networking companies recently with the anticipated shift to 100G technologies poised to happen soon. Various players are positioning themselves for this big industry shift. Along with this interest in all things 100G, there is also an industry evolution from the early generations of ROADM technology (Reconfigurable Optical Add Drop Multiplexer) to newer versions that provide a significantly higher degree of flexibility and reconfigurability.

Reconfigurable Optical Add/Drop Multiplexers (ROADMs) technically refer to a network element that has the capability of adding/dropping selected wavelengths for local traffic as well as redirecting express traffic to other directions in a multi-degree node. The “Reconfigurable” part in ROADM refers to the ability to do this local add/drop as well as the redirection of express wavelengths in a dynamic fashion from a remote network operations center and without manual re-fibers of line cards and with minimal pre-planning to account for uncertain traffic patterns. This reconfigurability is the key to efficient network adaptation to unforeseen demand patterns and customer connects/disconnects without costly service disruptions. The term ROADM, has been used more broadly than just the network element itself and has been used to refer to (a) an optical transport system that incorporates ROADM technology, and (b) optical components and sub-systems (made by companies such as JDSU) that form the building blocks of the ROADM system.

100G networking and associated optical products can be broadly classified into (a) client side, short-reach, standardized, pluggable optical modules that are used to connect short reaches between routers/switches and transport equipment or among switches, and (b) line side models, DWDM interfaces that are proprietary, vendor specific and cover distances of 1,000 - 2,000 km.

Early low-volume shipments of client side interfaces, which are standardized by IEEE, have commenced and the key players for these interfaces are Finisar, Santur and Opnext. The client side models have not yet reached attractive price points compared to 10G modules, hence slow uptake of the models is projected until the cost-volume positive feedback cycle kicks into higher gear. While early parts are sampling this year, rapid market adoption is highly predicated on the cost points of the modules.

On the DWDM line side that covers geographical reaches across regional, long-haul or ultra-long haul distances, there has been a concerted effort by all major optical equipment vendors to introduce 100G capable systems. The advantages of 100G on the line side are very compelling, as it increases the fiber capacity to 8 Tb/s and the preferred technology path using coherent optical transmission provides a number of additional advantages of simpler link design and inherent compensation of some fiber impairments such as chromatic and polarization mode dispersion. The advantages of 100G systems and reasonable price points relative to 10G systems will facilitate line adoption of 100G; it is expected to occur rapidly once systems are available in early to mid 2011. While early versions of 100G line side technology are available now, optimized and field deployable systems are expected in 2011. The major players in this space are Ciena/Nortel, Alcatel-Lucent, Nokia-Siemens, Huawei and Infinera. Each of the vendors has announced slightly varying flavors of the technology and approaches. With the R&D focus on 100G and coherent technology and the commoditization of 10G technology, it appears that 40G technology is being squeezed out in carrier applications (for both line side and client side applications). This was reinforced by Infinera’s recently announced decision to discontinue 40G non-coherent PIC (Photonic Integrated Circuit) and focus resources on 100G coherent technology in a PIC.

Along with the evolution from 10G to 100G discussed above, the other major area of interest in the optical networking space is the emergence and adoption of next-generation ROADMs that provide colorless, directionless and contentionless capabilities. The first generation of ROADMs introduced in 2003-2004 enabled the carriers to add/drop some wavelengths without disrupting other wavelengths. While this provided a huge improvement over the previous method of operation, it still had a number of limitations in terms of a fully automated reconfigurability. Newer optical building blocks and lower costs are enabling the realization of next-generation ROADM architectures which remove these limitations. Directionless ROADMs enable a common bank of transponders to connect to any direction in a multi-degree node. Colorless ROADMs enable a transponder to flexibly connect to any mux/demux port and contentionless ROADMs enable use of the same wavelength in different segments of a network with a common node. The key building blocks for these new levels of reconfigurability is higher port count WSS (Wavelength Selective Switches) and smaller, lower cost WSS switches. These advances are expected to catalyze the ROADM market and continue the high growth trajectory of this sub-segment of the optical component space and continue to benefit ROADM market leaders like JDSU.

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Ad Markets Strong in 1Q and Trend Continue to Improve in 2Q

Lloyd Walmsley
Wednesday, May 5th, 2010

PGR’s experts in traditional media ad buying saw strong 1Q result. Experts estimate an aggregate 5-10% growth in 1Q ad budgets and expect additional acceleration into 2Q. An increase in political advertising has fueled the acceleration of TV advertising and outdoor advertisers are hopeful that a new rating currency will boost their sales, but radio advertising continues to suffer from dwindling spending.

TV Recovery in Full Steam: Experts report tighter TV inventory and fewer cancellations and CPM increases in 1Q in both broadcast and cable TV advertising. Since auto advertisers roared back into the market late last year, ad buyers have reported broadcast and cable TV networks are demanding higher prices and offering less flexibility. Experts note scatter pricing is up between 8-40% over the upfront, depending on the network.  Experts look for higher upfront and scatter market prices this Fall. Fierce political elections also bode well for political spending, which is already adding inventory constraints to the networks. Among specific networks, experts see strength in broadcast networks CBS, ABC (DIS) and Fox (NWS) and cable networks TNT (TWX), USA (CMCSA) and Discovery (DISCA). Given the TV ad market’s notable weakness in 2009, expert reports point to strong year-over-year revenue growth in TV in 1Q and 2010, especially in broadcast given easier comparisons. National CineMedia (NCMI) may be best positioned to capture the tight TV scatter market given it sells less inventory on a forward basis than TV networks and some of its forward-sold inventory of automatic CPM inflators cushioning the company from last year’s market woes.

Political Advertising Heating Up: Ad buyers report political dollars flowing into advertising, starting to put pressure on inventory and support prices. Most experts see this situation intensifying with the approach of fall elections and following the Supreme Court decision to lift corporate spending limits on political campaigns. This is likely to benefit local broadcast TV in particular (CBS, DIS, GCI).

Outdoor Improving Slowly but Lagging: The tone from billboard advertisers was less enthusiastic than that of TV or Internet ad buyers, with some Outdoor experts reporting an improvement in the market while others noted ongoing weakness. Outdoor is likely to be a later cycle recovery than other media. Expert reports on the new EYES ON rating system rolling out this year suggest outdoor could address broader ad budgets and see new growth in 2011 and beyond. That said, the new rating system is unlikely to be fully rolled out until the end of 2010 at earliest and may be susceptible to delays in full implementation. (See the Network View on EYES ON for further color).

Radio Continues to Languish: Experts report that radio spending has continued to drop. The lower PPM ratings have led radio companies to increase their spot loads and require ad buyers to purchase more inventory to hit the same campaign goals. As a result, buyers seem less inclined to spend in radio.

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Challenges Continue for Global Financial Exchanges

Evan Reich
Monday, April 26th, 2010

Looking at the current state of the market, our experts see challenges affecting the global platforms, MTFs and exchanges. From 2006 to 2008, there was an explosion of mergers and acquisitions intended to consolidate volume and capture economies of scale and of new entrants to the global trading platform and exchange space with the goal of stealing volume from the biggest players through improved execution, smarter routing, more efficient large block trades and lower costs.

However, active M&A and new entry has come to an end as capital has become scarce with the cooling of the market.  In all likelihood, we are looking at a status quo situation until capital is available to properly integrate the previous wave of acquisitions. But it is worth noting that there are some major players who largely sat out the last round may be well positioned to take advantage of the next wave, namely the Deutsche Borse and Asian exchanges.

At this time, the biggest issue is the continued fragmentation of liquidity, which has made best execution elusive and efficient matching difficult to achieve for large blocks, even through the use of dark pools and other crossing networks.  This challenge has made post-trade reporting and accounting a more vital function, but one which the exchanges and platforms are ill-equipped to invest in as their limited funds are already devoted to fighting for improved trade processing speed and other underlying technologies. Meanwhile, start-up platforms continue to rely on the exchange to benchmark trades as they remain without the ability to establish reference prices. Efforts to integrate the two, as in LSE’s acquisition of Turquoise, remain perilous. Previous acquisitions, such as CME’s takeover of NYMEX, have demonstrated that it is one thing to acquire a platform, but it is quite another to hold onto trading volumes post-merger.
 
 
 

 

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Eyes On Outdoor Advertising

Lloyd Walmsley
Wednesday, April 21st, 2010

 

Experts are optimistic that Eyes On, the billboard advertising industry’s new rating system, will draw dollars into outdoor advertising but the impact will not be apparent until 2011 or beyond. The Eyes On rollout is moving slowly but it will soon replace the current standard of DEC numbers. We queried our network of outdoor advertising experts to better understand how the new ratings system could drive more dollars to the medium.

 

Eyes On versus DEC: Eyes On is used by some outdoor companies alongside the historical Daily Effective Circulation (DEC) measurement system. DEC ratings multiply traffic data by an estimate of people per car to measure the “opportunity to see” a billboard. Eyes On supplements traffic count and regional demographics with discounts for view obstructions, road type, and ad proximity, size, and angle to measure those “likely to see” a billboard. Eyes On provides a more reliable measure of audience and an improved level of demographic targeting that can be compared to other forms of broadcast media, including TV and radio.

 

Attract Ad Dollars: PGR experts on the Outdoor Advertising sell-side are cautiously optimistic that Eyes On can tap into new ad budgets that previously spent little on Outdoor due to its relatively unsophisticated measurement system. More dollars stand to be allocated to Outdoor with this deeper integration into the media budget process. After all, Outdoor still compares favorably to TV and radio on a cost per mille basis in key demos. This increasing drive for efficiency and metric driven advertising could lead Eyes On to favor Outdoor.

 

Expect Lower Ratings: Eyes On ratings, because of the discounts, tend to run approximately 30% lower than DEC ratings and experts note the lower ratings are exacerbated on highway billboards further from the road. While the Outdoor advertising sales process is not done strictly on ratings, one wonders if more accurate ratings could lead to budget shifts away from higher priced boards.

 

Limited Market Impact: Clear Channel Outdoor is the only company, according to experts, currently using Eyes On.  Some experts have yet to see Eyes On ratings in the market at all. Mom and pops and smaller regional players are likely to be slow to make the transition.

 

Stronger Outdoor Market: Experts indicate the Outdoor market has begun to see the impact of an improving economy. However enthusiasm in the Outdoor space appears muted, especially when compared to excitement for a rebound in online advertising (display and search) as well in TV advertising - PGR experts report strong 1Q trends and further tightening of inventory and rising prices into 2Q. Outdoor is improving but appears to be lagging other advertising.

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Search for Advertising Dollars

Lloyd Walmsley
Tuesday, April 20th, 2010

PGR experts in online advertising report strong growth in 1Q and signs of further improvement in 2Q. While marketers report clear growth in ad budgets, they note that clients continue to show signs of hesitancy with short notice on requests for proposals, heavy reliance on the spot market and a vigilant focus on ROI and metric-driven forms of advertising.

Experts indicate that search advertising is leading the way out of the recession, and Google continues to hold/gain share of search spending.  SEMs expressed a positive reception to Yahoo’s new network distribution tool and some shift in budgets away from Yahoo affiliate sights towards Yahoo O&O sites, a clear positive from a margin perspective.  That said, no marketers report spending more ad dollars on Yahoo Search in aggregate. Furthermore, many experts postulate Bing will continue to seize search advertising market share and the prevalence of this view could impact how marketers are inclined to allocate search dollars.

In online display advertising, PGR experts report a firming marketplace, higher prices, and increasing interest in tight integration of ad units with premium content sites. Experts are upbeat on the Google display product over the long-term, but there is a mixed reaction at AOL as some experts note continuing unrest among sales representatives, which may reflect the ongoing challenges within the business.

But change is ahead.  Increased smartphone penetration and media consumption from industry leaders Quattro (AAPL), AdMob (GOOG) and JumpTap is driving experts to predict increased investments in mobile advertising for the year ahead.

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SAP As Expected

Laxmi Poruri
Monday, April 12th, 2010

PGR experts report that their System Analysis and Program Development (SAP) has been in line with expectations. Experts are still seeing slow growth in the Enterprise Resource Planning (ERP) sector, but some more bullish European experts believe the recovery of IT spending in Europe will contribute to solid pipeline.

Experts report that HR and CRM modules continue to lose out as cost considerations drive customers toward SAAS players like CRM and ORCL PSFT.  Experts also found that flexibility on maintenance pricing is still aggressive.  Some resellers think this will help close more deals relative to last year at the expense of margins.  Other resellers cite an increase in upgrades and strong demand for ERP Central Component (ECC) 6.0.  Overall, most agree that growth for SAP is tied to a slow economic recovery and not product cycle.

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Peripheral Atherectomy Industry: CSI’s Diamondback 360 still gaining on ev3’s SilverHawk

Allison Hsieh
Wednesday, April 7th, 2010

PGR network indicates that while the SilverHawk is still the market leader in the peripheral atherectomy space, physicians often choose the Diamondback over the Silverhawk, particularly in cases below-the-knee.  The SilverHawk, EVVV’s pioneering endovascular surgical device from its acquisition of FoxHollow, has been facing competition from new players in the market over the past few years, most notably from Cardiovascular Systems, Inc.’s (CSII) Diamondback 360 and Pathway Medical’s Jetstream G2.  The Jetstream does not seem to be making an impression on the market, but the SilverHawk and Diamondback continue to carve out their respective niche markets, further shifting market share.

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