Global CT revenues surpassed $4 billion in 2018, growing 7.5% year-over-year. Growth was driven by healthcare providers upgrading existing installed systems, which shifted the product mixture toward higher slice equipment. GE Healthcare remained the top supplier of CT equipment despite increased competition due to bulk buying and widespread cost-containment. All CT manufacturers were affected by price pressure, and average selling prices declined despite the increased uptake of more expensive high-slice systems.
Features that improve return on investment (ROI) became increasingly important to CT purchasers, and several artificial intelligence (AI) solutions were launched in 2018 to increase ROI by streamlining workflows and improving diagnostic accuracy. From a regional standpoint, Chinese healthcare investment continued to drive CT market growth, but the US market was mostly flat. Market performance in EMEA was split. Europe was strong, but instability in the Middle East plagued the region’s CT market in 2018.
Demand for high-slice equipment and AI solutions accelerated
In the years leading up to 2018, providers were focused on upgrading CT equipment to comply with new dose reduction standards. Now that the deadline for compliance has passed, the focus has shifted toward increasing equipment slice count. The highest slice equipment segment (more than 128 slices) grew 10% year-over-year. Higher-slice equipment offers superior image quality and enhances diagnostic capabilities, and healthcare providers purchased these systems to upgrade existing equipment.
Despite the trend of buying higher-slice equipment, other features like workflow and ease-of-use solutions heavily influenced purchasing decisions. Reimbursement rates for CT declined and return on investment (ROI) became increasingly important. Solutions powered by AI were incredibly popular to improve diagnostic capabilities and increase workflow speed. The top three CT suppliers launched AI-powered solutions in late 2018. Siemens Healthineers launched the AI-Rad Companion Chest CT that uses AI technology to automatically perform measurements, prepare results, and highlight abnormalities. GE Healthcare debuted its Deep Learning Image Reconstruction (DLIR) engine on its premium CT system. The DLIR uses a dedicated deep neural network to generate higher quality images and improve diagnostic confidence. Canon Medical introduced the Advanced Intelligent Clear-IQ Engine that produces CT images through a deep learning reconstruction algorithm, improving image quality, reducing patient dose, and streamlining workflow.
GE Healthcare and Siemens Healthineers continued to fight for the top market position
GE Healthcare maintained its position as the top supplier of CT equipment in 2018 thanks to its strong sales network, portfolio, and reputation. Siemens Healthineers was the second largest supplier in 2018, and the company gained share in the highest slice segment. GE and Siemens will continue to battle for CT market supremacy in the coming years. Combined, the two companies accounted for more than 60% of global revenues in 2018.
Canon was the third-largest supplier of CT equipment in 2018, but the company accounted for less than half of GE's or Siemens's revenues. Canon Medical expanded its international sales and launched three CT systems in 2018 and the first half of 2019, but the consistently poor performance of the Japanese CT market shrunk Canon's market share. Philips Healthcare's CT business had a relatively quiet 2018 and remained the fourth largest global CT supplier. It reorganized its imaging group, which created some challenges that were offset by the launch of a new spectral CT product.
A positive year for the European market was dampened by delayed purchases in the Middle East
The European CT market was strong in 2018 due to pre-Brexit purchases in the United Kingdom and large tenders in several countries. The market outlook for 2019 is positive, but CT manufacturers will be increasingly pressured to lower prices to win major tenders, and "Hard Brexit" concerns will continue to cast a shadow over the European economy and healthcare industry. In the Middle East, political instability and economic difficulties delayed purchases of CT equipment in 2018, and this trend has continued in 2019. The entire medical imaging market is underperforming, but the Turkish market is especially struggling. The controversy over the Turkish election results of 2019 threatens to derail the government's economic reform agenda, and an impending diplomatic stand-off with the United States further complicates the political and economic landscape.
American growth was driven by North American replacement purchases and expansion of the installed base in Latin America
The US CT market was mostly flat in 2018, but some manufacturers won large public tenders. The best opportunity for growth during the next five years will come from selling high slice systems to upgrade the existing installed base. In Latin America, investments to modernize and improve healthcare drove CT equipment revenue growth in 2018. Most Latin American governments will not backtrack on their respective economic reforms but instead will continue the trend toward greater openness, deregulation, and privatization. This will gradually increase demand for CT equipment in the region.
Mainland Chinese growth remained strong despite impending challenges
The mainland Chinese CT market was the largest in the world and revenues grew more than 16% in 2018. Government reform policies promoted growth and sustainability in the healthcare system, but the Chinese CT market is expected to cool in the coming years. The release of pent-up demand for healthcare, alongside China's slowing economic growth, is putting a strain on provincial government finances. There are concerns regarding the long-term sustainability of the country's health-financing strategies. The health reforms are moving to address more entrenched problems, including changing hospitals' funding models and reallocating resources toward grassroots healthcare institutions to reduce the rural-urban divide.s work to prevent United Imaging from gaining a stronghold in the US market.