July 6, 2012

Is the NGS market a duopoly?

There are plenty of examples of two organisations dominating a market: Airbus and Boeing in passenger aircraft, Pepsi and Coca Cola in soft drinks, Microsoft and Apple in operating systems, Democrats and Republicans in American politics.

In this post, I ask how close the next generation sequencing (NGS) market is to being dominated by the Illumina and Life Technologies duopoly.

The size of the NGS market in 2011 was around $1bn, according to several industry sources. There are six companies that are currently active in the market. In decreasing order of NGS revenues, these are Illumina, Life Technologies, Roche, Complete Genomics, Pacific Biosciences, and Intelligent Bio-Systems/Qiagen.

Three of those companies - Complete Genomics, Pacific Biosciences, and Intelligent Bio-Systems - have revenues that are negligible compared to the size of the overall NGS market. Their combined sales amount to less than 3% of the total, and current trends do not indicate rapid growth for any of them.

Estimating the market share of the other three companies is trickier, as they also have business outside of sequencing. Neither of them breaks out its NGS revenues in its financial statements.

Based on the financial information that is available, Roche probably earned revenues of less than $100m from its 454 sequencing technology in 2011. This would be equivalent to 10% of the market or less, and is set to decline even more if recent trends are anything to go by.

This leaves Illumina and Life Technologies commanding at least 87% of the market together. Illumina is the clear leader with a market share of around 60%, which leaves around 27% for Life Technologies.

Nevertheless, the dominance of Illumina and Life Technologies looks precarious. As I mentioned two weeks ago, there are a dozen companies scrambling to enter the market, and some of them are working on rather disruptive technology.


  1. Am wrong to suggest that improvements in existing sequencing technologies (or developments of new ones) get less a less important, considering the need to improve analytical software and statistical approaches/software in the realm of the existing hardware/storage and data handling volume/speed ?

    1. If the underlying sequencing technology itself improves - one can imagine very, very long reads with almost ne errors, for example - some of the analysis steps become much easier as well, especially the hardware/storage and volume issues you mention.

  2. You are 100% correct. Hardware is becoming futile. In fact the duopoly is simply putting out faster cheaper system all the time, slowly cutting out profit under their very own feet and killing each other from proper revenue. Remember Life, because it needs to slash so hard in its costs right now to make any kind of profit from IT.