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CT industry prepares for 2008 rebound after last year's rout

CT industry prepares for 2008 rebound after last year's rout

Shrinking prices for 64-slice products offer bargains in market about to be transformed by new offers
CT vendors had the worst year in recent memory in 2007, and this year was shaping up to be even worse. But that was before the Feds stepped in.

Fearing recession, the Federal Reserve drastically cut short-term interest rates and increased liquidity in the financial markets, making it easier for imaging centers and hospitals to borrow money.

"More and more hospitals are financing equipment, so the better rates they can get will be a benefit to us," said Joe Cooper, senior manager for the CT business unit of Toshiba America Medical Systems, whose dynamic volume CT is scheduled to begin shipping in summer.

"There is going to be a great opportunity for new technology, such as the Aquilion One, especially for the primary stroke centers across the country," Cooper said.

Toshiba execs are not the only ones excited. Rallied by the federal actions, CT vendors now are predicting at worst a flat market compared wtih 2006--or as much as a 7% or 8% gain. These gains may be more in units sold than revenue gained, however. And that is very good news for buyers.

Last year, lack of CT demand wore down the street price of new systems. The average price paid for a scanner last year was $874,000 compared with $941,000 the year before. Street price for superpremium CT scanners, dominated by the 64-slice systems but buoyed by prices paid for Siemens dual-source systems, dropped down $50,000 from $1.17 million to $1.12 million, according to vendor estimates. But don't feel too bad for
vendors.

They had been riding a wave of good fortune that carried them to nearly $1.8 billion in new unit revenues during 2006, an almost 50% jump from 2003. In 2007, CT makers took a double-digit hit, as demand for 64-slice scanners, which had accounted for much of the past three years' gain, took a nosedive to about $1.4 billion.

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