More thoughts from Wall Street on the global CAD/CAM market

In the last Proofs e-newsletter, we published an article on the bright future predicted by analysts for the global CAD/CAM market. As a follow-up, I asked my friend and regular Proofs contributor Jeff Johnson, a Wall Street analyst with RW Baird, for his thoughts on the future of the CAD/CAM market.

"CAD/CAM and digital imaging are no doubt the fastest growing segments within the worldwide dental equipment market, with the CAD/CAM market expected to have at least low double-digit growth over the next three to five years. In the U.S. and several international markets (specifically Germany), we'd expect that growth to come from new system sales and upgrades to new technologies. In many developing markets, we'd expect it to come primarily from unit sales.

"While new market entrants are expected near-term (Glidewell's TS150 in the U.S.) or at IDS 2013, high barriers to entry – including a strong reputation for current market leader Sirona and an uncertain and potentially costly distribution strategy (given that HSIC (Henry Schein) and PDCO (Patterson) already have established CAD/CAM distribution relationships) – will likely make it hard for new entrants to succeed.

"Pricing is the one area where we admittedly see risk over the intermediate to longer term, especially in the in-office market. However, our survey work over the years has typically shown price to be less important than a system's clinical capabilities, the manufacturer's reputation, or the re-seller's after-market support capabilities, all of which seem to suggest an advantage for CEREC and, to a lesser extent, E4D."

Related information: Wall Street's final look at dentistry's second quarter of 2012