Manufacturers of surveying equipment are pointing their scopes toward the horizon, and they see their world getting smaller.
Tudor Van Hampton
"Bubba" can survive a 2-meter drop.
Topcon's recent bid to acquire Sokkia for an undisclosed sum reflects a frenzied demand for high-tech gear that is forcing some positioning companies to team up so they can compete globally.
The two Japan-based manufacturers of total stations, global positioning systems and other survey gear say they are joining forces because demand for their specialty equipment is putting a crunch on their ability to meet sales and at the same keep up technically. In addition, low-cost Chinese suppliers are increasingly vying for market share, adding to competitive pressures.
"With the intensified competition if the company and Sokkia were to continue business independently, it will not be easy to maintain their current market presence," said Topcon in a March 16 press release. "Furthermore, with their limitation in investment in R&D, there is concern that they [Topcon and Sokkia] may lag behind the leading manufacturers in U.S., Europe and Asia."
Topcon is 35% owned by Toshiba Corp. and sold $871.6 million last year. Sokkia, owned 20% by a Japanese equity fund, sold $186.7 million last year. Topcon reached record sales for the past three years straight and projects Sokkia¹s annual sales to climb 36% through 2008.
In the U.S., Topcon is well known for its aggressive and irreverent marketing tactics. At this year's World of Concrete in Las Vegas, it unveiled a new GPS receiver that withstands a 2-meter drop onto solid pavement. Surveyors typically handle delicate GPS rovers, which cost around $25,000, like they are a piece of Waterford Crystal. Trying to beat the image, Topcon nicknamed the new magnesium-alloy antenna "Bubba."
The positioning market is an estimated $3-billion industry annually and is expected to keep growing exponentially. Sunnyvale, Calif.-based Trimble will most likely pass the $1 billion sales watermark later this year, having just closed a $493.1-million purchase of @Road Inc., a company that helps fleet owners track mobile equipment.
Last year, Trimble also bought Meridian Systems and XYZ Solutions, software providers catering to construction management and 3-D site visualization. Trimble picked up $940.2 million in revenue last year, a 21% annual jump. It initiated a two-for-one stock split on Jan. 17.
Much of the positioning segment's future growth will be fueled by automation of heavy equipment and digital construction-site monitors, predicts Ray O¹Conner, CEO of Topcon Positioning Systems Inc., a U.S. subsidiary in Livermore, Calif.
"Every jobsite will have automated equipment," said O'Connor on Jan. 24 in Las Vegas. "The amount of money that can be saved by a contractor using this will make it impossible for anyone to bid against him."