Collapsed Growth, Collapsed Pricing, IHS Now Admits
Author: John Honovich, Published on Jun 22, 2016Login to read this IPVM report.
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Comments (7)
Undisclosed #1
On the bright(er) side, IHS also reporting more IP cameras shipped than non-ip cameras in 2015. Which may be the first year ever.
Yay!
It also may be the last year for some time.
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Jonathan Lawry
I heard it said, from an industry great, "IHS typically hires impressionable recent college grads with no industry experience. They always estimate awesome growth at the beginning of the year, and sharply revise down mid year. Why would anyone buy their research?"
This seems to validate that statement.
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Horace Lasell
"at some point in the next few years, when most integrators accept selling similar low cost Chinese products, the advantage for early adopter integrators will disappear and integrators will face lower total margins and more competitive stress from larger scale direct purchasing from stores and the Internet."
To carry the argument to the extreme, let's try to imagine what might happen if hardware costs were close to zero. If China's economy experiences a truly dramatic shock, product might be available for little more than the cost of shipping, possibly as long as there's inventory to liquidate -- perhaps a year or so?
Even under such circumstances, the big boys will always have work. Customers with a pressing need but not much market awareness will expect that you can't go wrong using ADT, for example, to install your marked-up free hardware.
Experienced customers may have learned that an expert local installer can deliver better value. I'd like to imagine that top-notch installers will always be in demand, regardless of hardware commodity pricing.
On the low end, installers who work for peanuts will always attract a certain clientele.
Until the market rights itself, there should be a blossoming of work, when you consider that the price of entry will never be better.
As for bulk discounts, as hardware becomes an increasingly small fraction of the installation price, hardware discounts should become less relevant than brand name, local reputation, or price of labor.
Unfortunately, under such circumstances, it would seem as if manufacturers would have to be capable of treading water for a while in order to survive.
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