Hope for Nanotechnology as New Nanotech-Based Products Enter the Marketplace

PALO ALTO, Calif.--(BUSINESS WIRE)--June 8, 2005--With its potential to make substantial improvements in the general quality of life, nanotechnology is drawing the attention of entrepreneurs and investors. Recent product launches such as transparent sun blocks, stain-free fabrics, golf balls designed to fly straight, and nick-proof trims on hummers clearly demonstrates the enormous potential of this technology to provide superior medical treatments, better production processes, faster computers, and smaller memory devices.

While more nanotech-based products, currently in their developmental stage, are expected to launch within the next few years, the nanotechnology industry is currently in the late introduction or early growth phase and hence faces numerous challenges.

“For every nanotechnology company that is expected to yield multi-fold benefits to investors, there are at least five or six companies that may not exist in the market 10 years from now”

New analysis from Frost & Sullivan (www.frost.com) U.S. Nanotechnology Industry: Investment Analysis and Growth Opportunities reveals that the 16 surveyed nanotechnology companies earned $1,722 million in revenue in 2004.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants an overview of the latest analysis of the U.S. Nanotechnology Industry: Investment Analysis and Growth Opportunities, then send an e-mail to Tolu Babalola, Corporate Communications, at tolu.babalola@frost.com with the following information: your full name, company name, title, telephone number, e-mail address, city, state, and country. The brochure will be e-mailed to you upon receipt of this information.

While development of technologies is an important factor for an industry in its growth phase, the lack of real products in the market is likely to be a deterrent for the required fundraising for commercializing products. Companies dedicated to nanotechnology are unable to sustain research and development activities solely based on their revenues, and funding is vital to further these activities.

There is also a lack of sufficient knowledge among consumers about the benefits offered by nanotechnology and the complex nature of such products. "Initially, nanotechnology products are expected to be more expensive than traditional products," notes Frost & Sullivan Industry Analyst, Kirti Timmanagoudar. "Convincing the customer that the added value is worth the additional cost will be a key determinant of the growth of this technology."

Frost & Sullivan found four out of the 16 companies generated 100 percent of their revenues in 2004 from product sales. There were three companies that had no revenues from product sales in 2004.

"For every nanotechnology company that is expected to yield multi-fold benefits to investors, there are at least five or six companies that may not exist in the market 10 years from now," adds Timmanagoudar.

Despite the challenges, there are more nanotech-based products in development that are likely to be launched within the next five to six years. All indicators point to a bright future for nanotechnology.

U.S. Nanotechnology Industry: Investment Analysis and Growth Opportunities, a part of Water and Aerospace Financial Benchmarking and Analysis subscription services, provides an overview and financial benchmarking for the nanotechnology industry. This study is segmented into Chemicals & Materials, Healthcare & Biotech, Electronics & Computers, Tools & Equipment, and Defense & Security. This research includes funding opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews are available to the press.

Frost & Sullivan's Business and Financial Services group serves clients around the world in all aspects of financial analysis, market research and monitoring, due diligence, idea generation, opportunity analysis, investment valuation, and other proprietary research.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit www.frost.com.

U.S. Nanotechnology Industry: Investment Analysis and Growth Opportunities

F175-F1