Abstract
Market Saturation affects Demand for POS Systems
Manufacturers of point-of-sale (POS) systems in the U.S. are currently
experiencing demand saturation across major end-user segments such as the food
and grocery stores and supermarkets. The boom of the early nineties - mainly
attributed to a healthy economy and preparation for Y2K that led to a manic dash
to replace terminals - has given way to a gloomy phase. Post Y2K, sales tapered
off and the market has slumped further in recent years, unable to withstand the
aftermath of global economic recession.
Frost & Sullivan examines the U.S. market for POS systems and discusses
various drivers, restraints, and pricing trends that are influencing market
growth. The research also provides unit shipment and revenue forecasts and
competitive analysis besides highlighting current and future market trends that
will enable companies to evaluate their growth potential.
Cyclical Replacement to Revive Demand for POS Systems
Undermined by a flat demand over the past few years, terminal manufacturers
are pinning their hopes on replacement sales to revive their sagging fortunes.
"Many installed terminals have nearly completed their average life cycle
period of seven years and this is likely to trigger a flurry of mandatory
equipment replacement in the near future," says the analyst. Additionally,
many of the older POS systems were introduced prior to the launch of Pentium
processors and hence, lack capacity for technological upgradation. The fact that
older terminals are incapable of supporting latest technical features such as
cathode ray tube (CRT) monitors and the Internet increases market opportunities
for terminal manufacturers.
Focus on Value-added Services to Boost Sales
Major terminal manufacturers such as Dell and Hewlett-Packard (HP) have
entered the POS arena with lower-priced terminals in an effort to drive sales.
However, other market participants are apprehensive of this strategy as it might
reduce the 'dollar value' of sales. "The possibility of revenue decline is
compelling terminal manufacturers to focus on improving the overall return on
investment for clients by providing compelling value propositions in terms of
software and services," says the analyst. "This is most likely to
increase their market share rather than metronomic equipment price
reductions."
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