Minnesota Micromotors Essay example

2490 Words Apr 5th, 2016 10 Pages
June 12, 2014

The Orthopedic Motor Market: Minnesota Micromotors, Inc. and
Brushless Motor Technology
Minnesota Micromotors, Inc. (MM), based in Minneapolis, was a manufacturer of brushless, direct current (BLDC)1 motors used in orthopedic medical devices. Devices utilizing MM’s motors were typically used by orthopedic surgeons in large bone surgery, reconstructive surgery, trauma surgery, and sports medicine procedures. MM sold approximately 97,000 motors a year and had a 9% share of the $137 million U.S. medical motor market for orthopedic and neurosurgery devices. (See Exhibit 1A.)
MM was a division of privately held Fractional Motors Limited, which had revenues of $350 million
(just over $12 million, or 3%, generated by MM)
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Manufacturers were divided into three tiers: vertically integrated, multinational tier 1 companies that produced many types of motors; tier 2 companies that specialized in either brushed
DC, BLDC, or universal motors technology; and small, privately held tier 3 companies that were niche providers like MM and that produced only BLDC motors for orthopedic uses. Smaller motor manufacturers like MM sought to distinguish themselves from their competitors by offering original equipment manufacturer (OEM) customers domain knowledge, customer service, product functionality, and compatibility with other automation products. In 2009, one of MM’s major tier 3 competitors introduced a high torque, BLDC motor line. These multilayer coil BLDC motors were precision-engineered to reach higher temperatures without compromising motor function. The industry average net price of the competitors’ motors was $118.

Orthopedic OEM Market and Purchasing Criteria
1 MM produced fractional horsepower motors, which had a power (machine strength) rating between 1/200 and one horsepower

(1 HP). The fractional horsepower DC motor market was divided into brushed and brushless DC motors. Brushed DC motors used a mechanical system of stationary metallic contacts (“brushes”) to transfer electrical energy. By contrast, brushless DC motors used an electronically controlled commutation system.

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