Why Are IP Cameras More Expensive Than Camcorders?

You can buy a top of line GoPro Hero3 for $399. That camera does 4k (8MP) at 15fps. It integrates WiFi, has a waterproof housing, battery, etc.

A roughly comparable IP camera - easily double, triple the cost.

So what gives? Why are IP camera much more expensive than camcorders / consumer cameras?


Well for one thing it is the 24/7 operation.

PoE, analytics, R&D, DSP etc.

That GoPro uses the same encoder chip as many IP cameras (Ambarella).

How much does PoE cost?

How many people are using analytics?

I am not saying that each part cost a lot but it does add up. The main thing is the ability to operate 24/7 using higher quality components to last many years.

Vincent, I am curious about the components side. What specific parts are different and more expensive?

24/7 operation time and network connection cannot be the only difference. in fact camcorders have more equipped (3ccd, hdd, optical zoom, quality audio recording, many different outputs, remote control, lcd screen, battery, software etc).

Obviously there is a creamy market and all manufacturers are happy about this poli monopol system. Use less component in different housing and sell it for 4 times more expensive. Sweet:)

Cctv installers and customers should raise their voice. I am not saying reduce the prices. If we are paying that much money, we should get proper quality of images. Manufacturers not hesitating to release misleading ads and dear Vincent, I don't see any point to defend them. Advertisely 60fps camera processing only 30fps and captured image quality is terrible then we calling this HD? You are buying and paying for 30fps HD(fake) camera and it's processing only 15fps so who and how can justify that?

  1. Volumes - This is the biggest one. If you look at the pure volume of camcorders and digital still cameras that are bought Worldwide, it's something like 1,000x than security cameras. This doesn't explain why CE is ahead on technology, but it does explain why the average security camera price may be higher.
    1. It's somewhat the same with smartphones. The imagers they use are generally more sophisticated than what is in many security cameras today, and the eBOM cost is only maybe $20 for the imager and encoder, versus 2X that amount on a security camera that has not-as-good of an imager. But that cell phone might sell 2,000,000 units in its lifetime, versus maybe 100,000 of the security camera over its lifetime.
  2. Robustness -- Camcorders and Digital Still Cameras aren't designed to be running 24/7. There is certainly some "hardness" to security cameras that are expected to run continuously for a minimum of 3 years and often for 5-7 years, Versus a camcorder that you use three or four times per year or DSC you use once per month, and which in both cases you'll probably only use for 2-3 years then buy the next greatest model. That robustness that security cameras must have that CE cameras don't need costs a premium. I've held a fair amount of CE and security cameras in my hand, and opened up more than a few as well and you can certainly see the difference.
  3. Margins -- In big box retail (or internet retail) gaining 5-10 points of margin on a device is okay because again the volumes are much higher. If I make only $50 for every camcorder I sell, but I sell 1,000 of them a month, that's $50,000 profit. If I make $200 for every security camera I sell but I only sell 200 a month, that's $40,000 profit.
  4. Technology - this is a little harder to answer, but it's something of a combination of the above. The run rates for camcorders are so large that they can amortize the cost of the new tech over far more units. Eventually when the cost of the tech goes down I can roll it into security where I achieve 1/5 the volume (at best). So the tech always lags behind on security cameras.
    1. As a subtitle to the Technology bullet point, you also have to consider R&D effort. Competition is much more fierce in the CE World, for a lot more volume. Companies tend to put the best and brightest engineers in the CE development area, and then whatever's leftover into their security cameras division. This means security cameras just don't have the R&D muscle behind them that CE products do. This has slowly been evolving over the last decade, but it's a very slow evolution.

Volumes -It's somewhat the same with smartphones. The imagers they use are generally more sophisticated than what is in many security cameras today, and the eBOM cost is only maybe $20 for the imager and encoder, versus 2X that amount on a security camera that has not-as-good of an imager. But that cell phone might sell 2,000,000 units in its lifetime, versus maybe 100,000 of the security camera over its lifetime.

This aspect is what makes products like Pelco's Sarix IL10 interesting. For that model, Pelco uses a 1/6.9" imager, a size typically used in smartphones and mobile devices. The lower comparative price of the IL10 seems due in part to using an image sensor with a much broader market, and economy of scale drives down component cost.

What's weird about the IL Pelco line is that, it's 'cheap' for Pelco, but it's still more expensive than ACTi/Vivotek comparables with 'regular' size imagers.

The Hero3 has limited networking, and perhaps that’s the culprit for the higher price of a CCTV camera. Is there a MJPEG, H264, or ONVIF license/royalty that needs to be paid? Perhaps the multi streaming & encoding requires more horsepower, and thus additional expensive components.

These sports cameras can take fabulous video in good lighting, heck movie theater quality! What about poor lighting, I didn't see a LUX rating on any of their cameras.

For fun you should get a Hero3 and run it thru the IPVM image quaility tests. Compare it to ACTi/Vivotek, etc. Amazing what passes for fun when dealing with tech-heads.

Aaron, GoPro supports H.264. ONVIF requires no license/royalty, just a cheap annual membership.

As for the horsepower, perhaps but the encoder chip is from the same vendor (Ambarella) as many big surveillance manufacturers use.

Ignore lux ratings. The main issue I would see is the F stop of the lens, f2/.8 which is pretty high compared to box surveillance cameras (typically f/1.2 to f1/1.4). I am curious why they choose f/2.8. I doubt it's simply to save money.

Btw, HERO3 imager size is bigger than most surveillance cameras so that wouldn't be a cause of poor low light performance.

All that said, we are planning to do a test of the HERO3 Black against leading surveillance cameras.

Video showing low light performance of the HERO3. http://www.youtube.com/watch?v=B2Os4BsNZd0

All of this is explained with a simple statement: Pricing of Consumer Electronics devices is (almost) always lower than Professional Electronics devices. It's a function of markup percentages, sales quantities and development costs, plus competition.

Ok we agree the price difference between CE and Professional!! products but why we don't get acceptable quality from professional cameras then?I just watched the video that Aaron sent, it's amazing. Cannot be compared to any CCTV camera. If you know any CCTV camera which can give even close result please post the model here so we can hug our dream CCTV camera.

The GoPro low light demo is not impressive at all (it's not terrible but from what I can see on par with budget HD IP cameras). Many HD professional surveillance cameras would easily do better in those low light scenes (see Axis Lightfinder, Bosch starlight, the new Sony, etc., etc.).