Disclaimer: Non of the below is comment on HikVision or any specific OEM; but on the general issue with Surveillance, there are so many manufactures from China & Taiwan with price points, which are unreasonable.
A 3Mega FishEye Camera at 140USD is the latest Offer from One of the OEM's.
WOW, this challenge is faced by all OEM's, IBM had to get out of laptop business; sold it to Lenovo, Two year back IBM got out of Server Business; "IBM is not able to Differentiate our product offering"
Business Models are ever changing and as the price of the product goes lower and lower, the support for the products moves way from Reseller to the OEM.
You can buy a printer / PC / TV / Fridge online or from a store, call a toll free number for Installation and another toll free number for service. (btw most of the toll free numbers land in India - :-).
Its clear the margin expectation of the SI is limited to sales, let me explain this..
Dealers for EMC or HP or HITACHI storage can buy the solution from VAR but the service contract is with Other Companies which provide FMC (Facility Management Services) or Product Support. The VAR does not provide the service support, unless they are themselves VAR + Service Agencies.
Take Netgear, provides net day service with 5 year warranty of some of their products, but this warranty & service support is not with the VAR.
Coming back to the question of CCTV from China, why the cost is lower
a) Cheap or Free Land + Cheap Finance + Free Power + Tax concessions + Constant Exchange Rate (CNY to USD) : provided by Govt.
b) Lower Labour cost + Limited Quality Control + No Enviromental Cost + Scale of Production
c) R&D : ?? today the IP camera are nothing but Embedded Linux. hence they just require to port & harden the firmware to their Platform.
MotherBoard: Most of the OEM's provide a test board and necessary support; the connectivity of the boards to Sensors / Memory is standard, I2C, SPI, USB etc etc. and drivers to these are available from the OEM's.
Sensor..: CMOS is driven by the Mobile Phones, more and more sensors are coming; the scale of consumption of mobiles allow Sensor OEM's to do the R&D. today You have a sensor for a price, I see thermal Sensor for less than 50USD.
OS: Linux : There are many open source platforms on features of camera, "ffmpeg", etc & for VA; "OpenCV" or "SimpleCV", many developments are on ARM & Raspberry PI development boards. (I have worked on many of these as a hobby)
VMS:
Even open-source VMS like ZoneMinder, is quite easy to MOD. and
the Master Stroke by AXIS, SONY & Bosch "ONVIF" is now rocket engine for everybody.
Die Making:
with 3D printers, this is now Computer Game.
It cost nothing to make a die in China, it cost a small fortune in US and Large Fortune in Germany.
Trail Production / failed designs: there are enough third world countries where the waste / sub standard product are sold in bulk, "as is"
d) Sales Cost: ha ha.. yes, start with paying what the market demands, but once they dominate the market, then its a diff. story.. wait and watch, In India, today we have campaign "Sell 10: Win IPAD" or "Sell X before Dec; Win all paid trip to Thailand".
also many OEM's claim to have their own R&D team but guess what? of course they do have team porting and building from open-sources.? I full agree there are exception to this.. a few OEM's are into R&D but we can count them on fingers...
the technology snapshot: what an IP Camera or Solutions or OpenFirmware
Due to ONVIF, no OEM's can claim to be different hence the Surveillance market has become commodity, is this good for the industry......?