Selling on fear is never a good strategy.

Several reasons:

• Modus Ponens (mode that affirms) – making such a statement requires an assumption that AVO does not have any cyber security risks. However, if/when a security issue arises with AVO software and hardware, not only would this make the statement null and void, but could also erode the integrity of future statements. After all, nothing is completely secure.
• If/when the Chinese companies fix and address their cyber security issues, this argument is no longer valid, leaving the market to go back to buying low-cost options. Selling on fear is short term.
• Buying is an emotional action. Buying on a bad feeling, such as fear, never leaves a positive experience for the consumer. This can decrease repeat business. The buying experience must be positive.

Suggestions for camera manufactures selling against the China imports:

• Focus on your own attention to cyber security and less on the competitors lack of cyber security. Tell your story on how your engineers spend considerable time testing against cyber security issues. It needs to be a positive story about your value, not a negative story about their issues.
• Sell on the value of the overall solution. Cameras are becoming a commodity, yes, but not all cameras in all applications. Focus on the value of the solution you are providing, a key part of that is support and the long term answer to the customer’s needs.
• Sell your support and service. Sell yourself, your integrator partners, the level of technical resources, the ability to help design a system that brings value in cost and performance.

There is nothing wrong in capitalizing on the weakness of your competitors, but do not make that the only story you tell. Tell your story on how you are delivering value and answering the growing risk associated with cyber security.

Selling on fear will only go so far.

I don't know what the percentage of Asian vs non-Asian manufacturers is, but I suspect there are a lot more Asian manufacturers in the security industry overall. If that is true, would it not also be true that we should expect to see them experience the majority of security vulnerabilities?

When it comes to cyber security, all are at risk. It looks like AVO have had a good run, but I doubt they have as broad exposure to the world as companies like HikVision. He is primarily attacking them, and there are some good reasons to do so. But rather than broadly claiming Asian manufacturers are bad at security, he would be better served by explaining what AVO does differently.

What are they doing from a cyber security approach to ensure their products are secure? Fear is a long used sales tactic, but I think the tactic is more effective when you do so in a positive way - highlighting your strengths. I couldn't find this statement in that 10-page transcript so maybe the excerpt is out of context and they did discuss their strengths? Not that they necessarily had to in an earnings call like this - they might take a different approach in a discussion with a customer.

This get me a bit inspired to walk into Avigilon's binaries and have a look, I'm sure there is something juicy too...

SECUIRTY BY OBSCUIRTY

In security engineering, security through obscurity (or security by obscurity) is the reliance on the secrecy of the design or implementation as the main method of providing security for a system or component of a system.

This don't fly no more but yet I see it everyday.   Like said above, stop worrying about what others do and evangelize how awesome your cyber awareness is. 

It's a hard argument to stick to.
Our company happily promoted how we had avoided security issues without resorting to pointing out others inadequacies.

1. Customers didn't change their opinion, cheap with security issues is still better than mid price apparently.

2. We were contacted by a cyber-security firm who pointed out major issues for us to rectify. In this case we quietly slid under the radar & fixed the problems, but if we had have been a higher profile company, I am sure we would have made news somewhere...

So in other words all manufacturers are vulnerable, it's just whether you are ahead of the baddies or not as to whether you can shine your light or play in the mud with the rest. It does not take much to trip & end up in the mud.
I hope for their sake that Avigilon manage to keep their shiny exterior.

With 100+ votes, Avigilon CEO has overwhelming support:

I prefer tech facts than commercial circus.

And I think this point "cyber security breaches and design weaknesses" is really powerfull if he points out his brand efforts in that subject and lists the weakeness his company found in others; not only asian.

I prefer this information in terms of percentages and saying no names, but relying on real data.

Using the term "Asian" is potentially problematic here. It could be helpful for Mr. Fernandes and all of us in the video surveillance industry to clarify the country of origin. Specifically in this case, everyone seems to be referring to products manufactured on Mainland China (People's Republic of China). As we all know, Asia is made up of many nations, and this broad stroke is especially a disservice to manufacturers in South Korea, Japan and Taiwan (Republic of China) that do not operate under the influence of a communistic regime.

Whether they're factually correct or not, it's important to weigh their statement with the realization that they're speaking about a competing manufacturer.

It's easier for Avigilon to poke at the lower budget cameras out of China, especially with the recent issues affecting Hikvision and Dahua. 

Note: Security vulnerabilities (and camera issues) can be remedied through firmware updates, you need the firmware and access to the firmware loader. So-and-so may have fixed the vulnerability with an appropriate patch, but the cameras should still be updated. 

For some brands, you have to log in to the web client to access a firmware update page. Other brands (sony, arecont, etc) have tools and firmware loading software that assist in bulk updating firmware files. Avigilon's VMS server will push firmware updates to all their cameras whenever the server software is updated.

I don't have very much experience with Hikvision cameras or software, but it does look like they have a firmware update tool or equivalent service. 

Dahua might have that service as well, but hunting down firmware for their cameras was like pulling teeth until they decided to provide better access to firmware files on their website.