Axis Falling Market Share?

Axis 1st quarter results were weaker than Q4 2008 (see Axis' Q1 presentation). For the first time, Axis reported shrinking revenue (-2% in real, local currency terms). Only the US had growth (13%). Revenue feel in both Europe and Asia. 

These results were widely reported as being more positive than they actually are due to currency effects increasing financial returns. Nonetheless, the depreciation of the Sweedish Kroner is extraordinary and does represent a real improvement in Axis business (just like if the Kroner appreciated, this would not mean that Axis would be a weaker company, even if short term financial results were negatively impacted).

While most IP video companies do not release financial results publicly, my survey of a dozen IP companies indicates that the IP video market is still growing (probably in the 15%+ range). This means that Axis lost market share last quarter.

I believe this is an acceleration of a long term trend and not an abberation. A couple of reasons for this:

• The number of IP video product offerings has exploded in the last year providing many more options for buyers.
• Dealers and distributors are open to the new offerings because other manufacturers are providing more incentives and a more lucrative financial structure for promoting rival IP products.
• The economic conditions are increasing pricing pressures, hurting Axis much more than their budget competitors.
• Finally, and of course, the economic crisis is delaying new construction, reducing momentum for all IP video offerings.

A number of members have already commented on these points on our LinkedIn Forum.

[UPDATE 2012: Axis has matched or outperformed the market over the past 3 years.]