Scanner prices determine MRI market segmentation

February 13, 1991

Following the precedent of computed tomography, the magnetic resonanceimaging market has become price-segmented, said Surya N. Mohapatra,vice president and general manager of Picker International's NMRdivision. There are--particularly in the U.S.--three

Following the precedent of computed tomography, the magnetic resonanceimaging market has become price-segmented, said Surya N. Mohapatra,vice president and general manager of Picker International's NMRdivision. There are--particularly in the U.S.--three basic MRImarket segments:

  • the premium-image market, where scanners sell for $1.8million and above;

  • the best-value-for-the-money, mid-tier segment, withan average price of $1.4 million; and

  • the economy segment, which requires a price of $1 millionor less.

"All three of these segments are going to grow, independentlyof each other," Mohapatra told SCAN. "Although peopleare trying to say (MRI market segmentation involves) field strength,this has very little to do with it."

While Picker was a pioneer in the low- and mid-field MRI markets,the Cleveland vendor decided several years ago to focus its R&Defforts on high-field MRI scanners. The 1.5- and 1-tesla Vistaunits now constitute most of Picker's MRI sales. Both units aresold with Oxford's active-shield magnets (see story, page 2).

"There was a conscious decision to tackle the technologicalproblems at 1.5 and 1 (-tesla), and we have done that. We havebeen able to sell effectively to those groups in the high-performancesegment," he said.

Picker has about 300 fixed and mobile MRI scanners installedin the U.S. and about a 16% annual market share. Mohapatra, whowas placed in charge of Picker's MRI business last year, hopesto boost that market share to over 25% in two to three years.

The MRI market has room for both 1.5- and 1-tesla high-fieldsystems, Mohapatra said. There will always be demand for the 1.5-teslaunit because it provides the image quality and thin slices demandedby high-standard research sites. The 1-tesla unit, on the otherhand, fits into the mid-tier segment, providing high-field imagesat a lower price.

Although Picker still sells its 0.5-tesla, mid-field MRI scanner,the vendor's MRI customer mix has evolved from primarily private-practiceusers to more research-oriented radiologists. The vendor's technologicalimage is burnished as these research customers write papers andpresent results using Picker equipment, he noted.

Eventually, Picker will be able to apply the basic MRI knowledgeand applications software gained from research with premium scannersinto new lower cost products. The company has an ongoing researchprogram to develop a low-cost MRI unit, although it has not decidedon an appropriate field strength, Mohapatra said.

A lower cost MRI system will help Picker improve its positionin Japan, where its expensive scanners are not competitive. Toshiba,Hitachi and Instrumentarium compete for share in the U.S. economyMRI segment, which is not large in terms of units sold, he noted.

"There are a number of scanners, irrespective of fieldstrength, that companies are getting into for below $1 million,"Mohapatra said. Part of the impetus for this market segment comesfrom several states' certificate-of-need rules, which place a$1 million cap on MRI prices.