IP Camera Vs HD Analog Manufacturer Cost Difference

Why is IP Camera more expensive than Analog? Has anyone compared the bill of materials to see components used in a 1.2MP camera to a 1080p HD camera? What's causing the big price difference - I understand that analog systems has centralized encoding whereas IP cameras have their image processor chip onboard - but is that the only reason? Are these SoC chips by Ambarella/TI/Hisilicon really that expensive?

Nic, good question.

I asked Michael Archer who did our How a Security Camera is Made video, and he commented:

"For IP camera the SoC is more expensive, absolutely, it’s got an ARM chip inside for starters. All IP cameras pretty much now have an ARM on the silicon. So you have in essence a Linux based mini Computer running which needs, flash memory for Firmware, you need static memory also.

There is also things like PoE interface board all needing a few $$ cost. Interface connections. Battery backup. Network interface. And support for sub systems, if using all those extra things.

And someone somewhere has spent time money and effort to programm an IP camera and wants his ~50 cents for sure. And you bet there is license fees on the silicon to pay for any patients on any elements, which are built into costs of the device.

At best an IP board as seen on the IPVM making a camera video shows a single 38x38mm board, but additional the PoE board is separate. And the complicated board has both sides populated pretty packed."

The other thing I would add is that almost manufacturers recognize that IP camera buyers are less price sensitive than analog so they tend to markup prices higher.

Thanks John and Michael!

John, I think you're right about the higher mark-up on IP cameras as the cause of the price gap.

I think the SoC cost doesn't explain the price difference. Doing a quick search online you can find $4 (720p) $5-6 (1080p) SoC from players like Hisilicon, Novatek, Geo Semi, Grain Media. At the high-end, Ambarella charges $9 for their 720p and maybe $10 for 1080p. I can't find prices for PoE interface board, but I think it should be quite cheap since it's mass manufactured. Do you know if the same imager chip is used for analogue and IPcam?

I'm curious to see what is the price gap between HD analogue and IP cameras, and whether it is narrowing rapidly with the Chinese entering the market. Any idea what's the price for the most common Dahua HDCVI vs IP camera at similar resolution (and IR range)? I tried using the camera price comparison tool but no luck because the prices are not available.

On a similar note, are NVRs more expensive than DVRs?

"Ambarella charges $9 for their 720p and maybe $10 for 1080p"

Where are you finding these numbers? Ambarella pricing, from talking to manufacturers, varies dramatically depending on one's volume, i.e., Hikvision might order a million, Vicon might order a thousand (hypothetical example).

"I'm curious to see what is the price gap between HD analogue and IP cameras"

It depends on the specs of the camera (by this I mean, fixed vs varifocal, true WDR or not, vandal, etc.).

Roughly speaking, right now, entry level, Hikvision / Dahua for HD analog tends to be ~$60, IP tends to be ~$100.

On the recorder side, I believe analog HD is less expensive. I just checked what I believe are the equivalent Hikvision TVI and IP recorders, respectively DS-7216HGHI-SH and DS-7616NI-E2/16P, and the TVI one is roughly half the price, in the range of $300 vs $600. I have not carefully analyzed recorder pricing so if I am missing something, someone please respond.

Thanks John, I'm trying to understand what's causing the price difference (in your example ~$40 difference for entry level cameras). From reading about it online, it's an accepted fact that IP cameras are more expensive than analogues but I can't find a good reason why that's the case.

Assuming if profit margins are comparable for IP cameras and analogue cameras (and I don't know whether this is the case or not), then one should expect some component in IP cameras (or additional manufacturing step) that explains the higher cost. It seems like that component is the SoC board - is it possible that the SoC board alone can explain the $40 price difference?

As for the Ambarella and other SoC prices, I did a quick search and found it on this website.

"It seems like that component is the SoC board - is it possible that the SoC board alone can explain the $40 price difference?"

That's end user price, and it is getting marked up through distribution. Using rough / hypothetical numbers - You buy an IP camera from cctvsuperstore.com for $90, cctvsuperstore.com buys it from a major distributor for $75, that distributor buys it from the manufacturer for $65, etc. The manufacturer wants a 50% margin, implying that it cost them $32.50 to make. Compare to HD analog - $60 end user, $50 retailer, $43 manufacturer sale price, manufacturer cost $21.50.

So yes, the cost of the SOC / PoE components could make the difference when you work back from end user price, through the channel to BOM.

btw, that SOC price they cite is a rough number. Ambarella has multiple models even for the same resolution and the price paid by manufacturer almost certainly varies significantly depending on the volume committed for each camera manufacturer buying.

I wouldn't be surprised if the POE module alone is near $5. I've sourced a couple thru American distributors, though the board comes from china, and they are typically $9 qty 1000.

That makes sense, the mark-ups along the distribution channels should amplify the COGS cost differential. Thanks for clarifying!

Does anyone know if Analog HD cameras have Linux-based mini-computers in their SOC?

Michael Archer says no. There might some special analog HD camera out there that might but it is not typical.