Demand for MS, which demonstrated robustness during the recession, is expected to maintain high single-digit growth in 2011. The continuing pipeline of new product introductions is helping to drive many segments of the MS market. All of the industries that contribute significant demand for MS are expected to experience at least modestly positive growth this coming year. The competitive landscape also looks significantly different now than at the beginning of 2010.

Every year seems to bring another generation of new instruments that supersede the previous year’s new products, which helps generate demand from leading-edge researchers. However, most end-users do not benefit greatly from these latest-generation systems. Of all the segments of the MS market, FT-MS continues to be the most dynamic as Thermo Fisher Scientific continues to introduce more new FT-MS-based models targeted at much broader customer bases. The fastest-growing segments in 2011 will be portable MS and TOF LC/MS.

Much of the MS market has benefited from stimulus spending programs that have made academic and government labs flush with funding to purchase the latest-generation, highest-performance analysis instruments. However, this surge of funding that helped maintain MS demand during the recession is now trailing off, and it will be a challenge for academic and government laboratories to significantly increase their budgets for MS and other high-end instruments in 2011.

While growth in academia and government will not be as spectacular as in 2010, demand from the life science industries should experience considerably better growth this year. Although demand from the larger biopharmaceutical firms was not as heavily impacted by the economic downturn as smaller companies, their confidence in the economy is gradually improving, which will mean more investment in R&D in 2011, and therefore more orders for mass spectrometers. Smaller pharmaceutical and biopharmaceutical firms have had more difficulty accessing credit and financing to pursue their projects, but with the improvement in economic conditions in 2010, there will surely be a significantly higher rate of growth in demand. The continued growth of the research markets for diseases and the drugs to treat them will lead to improved demand from contract research organizations (CROs) for MS as well, particularly for the purchase of higher-end and more costly systems, of which smaller firms have more trouble justifying. The continued evolution of food safety testing is increasingly relying on MS-based methods, while modern environmental regulations are being adopted by developing nations such as China, which is also supporting demand for more basic mass spectrometers, such as GC/MS.

There were two major business transactions that were completed in 2010 that further consolidated the MS market. Agilent finally completed its pending acquisition of Varian (see IBO 7/31/09), which also required the divestiture of some of Varian’s MS businesses to Bruker (see IBO 3/15/10). While greatly expanding Agilent’s MS business, making Agilent the clear number-two vendor in the market, the Varian transaction also now makes Bruker a major competitor in non–life science MS. The other major development of 2010 was the acquisition by Danaher of MDS Analytical Technologies and the Applied Biosystems/MDS Sciex joint venture (see IBO 9/15/09), which united the two closely related businesses under the AB SCIEX name.

 Mass Spectrometry 2010–2011

                            Market Share       Growth Rate

 Tandem LC/MS               33.8%                8.5%

 GC/MS                      18.4%                6.0%

 TOF LC/MS                  16.0%               10.8%

 MALDI-TOF MS               10.7%                6.6%

 FT-MS                       8.7%               13.2%

 Single Quad. LC/MS          6.3%                7.9%

 Magnetic Sector MS          3.8%                4.0%

 Portable MS                 2.4%               11.5%

 Total                     100.0%                8.5%

 Pie Chart: 2010 Mass Spectrometry Suppliers Market Shares

 AB SCIEX (Danaher)          22%

 Agilent/Varian              20%

 Thermo Fisher Scientific    18%

 Waters                      13%

 Bruker                       8%

 Other                       19%

 Mass Spectrometry Market Leaders

 Tandem LC/MS               AB  SCIEX (Danaher), Thermo Fisher Sci.

 GC/MS                      Agilent/Varian, Thermo Fisher Scientific

 TOF LC/MS                  Waters, AB SCIEX (Danaher)

 MALDI-TOF MS               Bruker, AB SCIEX (Danaher)

 FT-MS                      Thermo Fisher Scientific, Bruker

 Single Quad. LC/MS         Agilent, Waters

 Magnetic Sector MS         Thermo Fisher Scientific, JEOL

 Portable MS                INFICON, Bruker

 Pie Chart: 2010 Mass Spectrometry Market by Product Type

 Initial Systems            71%

 Service                    18%

 Aftermarket                11%

 Column Graph: 2009–2012 Total Mass Spectrometry Market

               2009      2010      2011      2012

 $ Millions    2,354     2,585     2,803     3,039