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How large is the PERS (Personal Emergency Response System) market and what is the growth (TAM and CAGR) for the next five years?
Hello and thanks for your question on the size of the Personal Emergency Response System (PERS) market in the U.S. in value and units, and its expected growth in 5 years.
In short, the U.S. Personal Emergency Response Systems (PERS) market is US$ 1.46 billion in 2017 and about 2.8 million units are expected to be sold this year. The market is expected to grow at a CAGR of 9.2% between 2016 and 2024 to reach US$ 2.26 billion in five years (2022) and US$ 2.7 billion by 2024.
METHODOLOGY
To find the size and growth of the U.S. Personal Emergency Response Systems (PERS) market, I began by looking for reports on the global market size and growth, which are readily available. Most of the accessible information on the U.S. was presented collectively in the North American PERS market. However, after sustained searching I was able to find information on the U.S market by value and by units sold to present the requested information. I made some assumptions in extrapolating the size of the market by volume/units, so the estimates provided should be considered indicative.
Below are my findings:
BACKGROUND
North America makes up 40% of the global Personal Emergency Response Systems (PERS) market and is expected to retain this 40% share by 2020. The U.S. is the largest market in the North America PERS market. The mobile PERS segment makes up 32% of the U.S. market and is growing at a compound annual growth rate (CAGR) of 4% to 2020, higher than the traditional landline market growing at a CAGR of 3.3%. The current penetration of the PERS market in the U.S. is about 5% and is expected to rise up to 24% by 2030. Some of the drivers of the market include: “rise in receptiveness to communication technologies by the elders, home-centered technologies, and use of different mobile form factors as part of daily living and healthcare services.”
There are over half a million new customer activations in the U.S. PERS market per year, up from 300,000 annual activations in 2011.
U.S. PERS MARKET SIZE BY VALUE
According to Frost & Sullivan the Personal Emergency Response Systems (PERS) market is expected reach US$ 1.46 billion in 2017.
U.S. PERS MARKET SIZE BY VOLUME/UNITS
According to Frost & Sullivan 2 million PERS units were sold in 2010 in North America. The same report states that the North American PERS market reached US$ 1.86 billion in 2017. This means that the U.S. PERS market in 2017, at US$ 1.46 billion, makes up about 78.5% (1.46/1.86 x 100) of the regional market. Assuming this was the same proportion in 2010 and that the percentage in value also applies in volume, then about 1.57 million (78.5% of 2 million) PERS units were sold in the U.S. in 2010.
From the Frost & Sullivan report, the U.S. PERS market was US$ 1.04 billion in 2013 and was forecast to reach US$ 1.46 billion in 2017. Using the formula provided in Investopedia to calculate CAGR, this means that the market grew by a CAGR of 8.85% between 2013 and 2017. As Frost & Sullivan also give a CAGR of 10.4% from 2010 to 2017 for the overall North American PERS market, I made the assumption that the CAGR of 8.85% could apply for a similar period of 2010 to 2017 in the U.S. PERS market. I made a further assumption that the CAGR can equally apply to the volume/units sold as it does to the value of the market. Based on this, the 2017 sales can be estimated at 2.8 million (1.0885^7 x 1.57 million) units.
GROWTH OF THE U.S. PERS MARKET
The PERS market in the U.S. is expected to grow at a compound annual growth rate (CAGR) of 9.2% between 2016 and 2024. As such in the next five years (2022) the U.S. PERS market can be estimated to be US$ 2.26 billion (1.092^5 x 1.46 billion) and US$ 2.7 billion (1.092^7 x 1.46 billion) by 2024.
Applying the same CAGR of 9.2% between 2016 and 2024 to the units sold, the U.S. PERS market by volume can be estimated at 4.34 million (1.092^5 x 2.8 million) annual sales in five years and 5.18 million (1.092^7 x 2.8 million) units sold annually by 2024.
CONCLUSION
In summary, the U.S. PERS market is US$ 1.46 billion in 2017 and is expected to grow at a CAGR of 9.2% between 2016 and 2024 to reach US$ 2.26 billion in five years and US$ 2.7 billion by 2024. In 2017, about 2.8 million PERS units are expected to be sold. This volume can be estimated to increase by the same CAGR of 9.2% between 2016 and 2024 to reach 4.34 million units sold annually in five years, and 5.18 million units sold by 2024.
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