NEW
YORK, July 29 /PRNewswire/ -- Are high prices a barrier
to nanotechnology commercialization? The answer is
yes, according to a new report from Lux Research entitled "Nanotech's Pricing Stalemate Ends." In
a remarkable disconnect, 75% of large corporations
that buy components based on nanotechnology believe
that they hold the pricing power in deals, while 70%
of sellers think that in fact they have the upper hand.
The result: Deals languish while corporate buyers use
delay tactics on overeager sellers.
"Pricing is cited by 45% of corporate buyers as
a major challenge that often impedes nanotech deals.
Buyers lament that sellers frequently pay attention
only to the cost of their own components, missing
the big-picture view," said Lux Research Senior Analyst
David Lackner. "Only 15% of sellers, however, see
pricing as a major problem. They have such faith
in their products' performance gains that they view
pricing as a minor issue that will work itself out."
To build a framework for assessing pricing strategies
in nanotech, Lux Research conducted 40 in-depth interviews
with executives on both sides of the nanotechnology
negotiating table - twenty small-cap and start-up
sellers that develop nanotech applications as well
as 20 large corporations that buy and/or license
them. The report finds that:
* Buyers and sellers agree on the big picture.
More than 70% of buyers and specialists alike say
that their ideal nanotech deal is a long-term relationship
that represents a win-win for both sides. Buyers
like long-term deals because they offer continued
access to innovation; sellers like the access to
distribution channels, marketing capabilities, and
knowledge of end customers that these deals bring.
*
However, buyers and sellers disagree on everything
else. Most buyers want sellers to manufacture and
support component products, while most sellers
would prefer to license patents and avoid manufacturing.
Buyers demand exclusivity from sellers, but sellers
would prefer not to offer it. And while buyers
do anything they can to avoid having a single source
for a component, specialists think the uniqueness
of their solutions should be the top factor in
setting prices.
The
report finds that within the next four years, the
tug-of-war between buyers and sellers will wind
down as the imbalances between buyers' willingness
to pay and sellers' expectations work themselves
out. Two sustainable long-term equilibrium points
are possible: Commodity supply, in which interchangeable
sellers can sell only on the basis of price and
availability, and win-win, in which sellers earn
long-lasting premiums. The report forecasts which
nanotechnology segments will end up in each equilibrium
outcome. "In commodity
supply cases, such as the crowded field of metal
oxide nanoparticles, where more than 110 companies
compete globally today, corporations should employ
tactical vendor/supplier relationships," said Lackner. "In
win-win segments, however, we recommend that corporations
secure option rights to collaborate with desirable
nanotech startups to prime the pump ahead of urgent
need."
The report provides a decision tool for corporate
nanotechnology executives to match their business
development strategies to pricing outcomes. The full
report is available immediately to clients of Lux
Research's Nanotechnology Strategies advisory service.
For information on how to become a client, contact
Rob Burns, Vice President of Sales, at (646) 723-0708.
An executive summary of the report is available at www.luxresearchinc.com
About Lux Research:
Lux Research is the world's leading nanotechnology
research and advisory firm. We help our clients make
better decisions to profit from nanoscale science
and technology, tapping into our analysts' unique
expertise and unrivaled network. Our clients include
top decision makers at large corporations, portfolio
managers and analysts at leading financial institutions,
CEOs of the most innovative start-ups, and visionary
public policy makers. To get connected and for more
information, visit www.luxresearchinc.com .
For early registration and event details for the
Lux Executive Summit, please visit www.luxexecutivesummit.com
Source: Lux Research
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