It is expected that the next three years will be the development period of smart meters.

Foreword: With the vigorous bidding of the national power grid for smart meters, the smart meter industry has ushered in a rapid development opportunity. It is expected that the next three years will be the golden period for the development of the smart meter industry. Major companies should enhance their strength and seize opportunities for development.

According to statistics, in December 2009, the State Grid for the first time tendered 2,943,400. Subsequently, the State Grid has increased the number of tenders. In 2010, it completed four smart electricity meter tenders and accumulated 45.37 million tenders.

National Grid plans to replace 300 million single-phase smart meters between 2010 and 2014. The tender volume for 2010-2011 is about 100 million. Therefore, there is still 200 million market space for the smart meter market in the next three years. With the maturity of the tendering system of the State Grid and the stabilization of the market competition, listed companies will continue to benefit.

However, once the State Grid has come to an end with the centralized bidding for smart meters, the market demand for the industry may shrink significantly. Although the smart meter market still has a three-year golden period, due to fierce competition in the industry, the gross profit margin of listed companies is declining year by year. Some listed companies choose to diversify their overseas markets or diversify their development. Ke Lu Electronics has begun to dilute the dependence on smart meters, and Samsung Electric also began to look for overseas markets.

Domestic smart meter companies should not only see opportunities for gold development, they should also plan ahead, thinking about how the market environment should develop after being “cold”, and perhaps diversification is a good choice.