John, I'm thinking that last quote is an editing error in the original Cantech letter . . . most likely some dropped out text. The thought that started with "beause standard lenses" never got completed.
I do see analog cameras being sold in two situations, but I have no idea what the market percentages are. The first is by small security systems providers who find intallation of analog cameras with DVRs to be simple and straightforward compared to a networked system. Usually the systems I've seen like that are for entryway and cashier point coverage where the field of view extends no more than 15 or 20 feet. The second situation is the DIY kit from a retailer.
People are comfortable setting up a DVR because they have them at home for TV. I don't think the security video market will go 100% IP in this decade, because in some situations analog quality is acceptable. That's not the majority of systems, though.
I would have believe that 95 percent may be a realistic number if you were to look at number of systems. I notice that three quarters of all small to medium businesses have video, and just about every one of those is analog based. Probably three quarters or more of our school systems (or more) are still running analog. On a new camera basis sold per year, 95 percent is obviously wrong, but for cameras or systems in operation, I would bet 95 percent is a close estimate.
What's peculiar about this redefinition of 'market' to mean 'installed base' is that the group this presentation was delivered to, investors, care little about the later.
I agree that most SMB have analog installed. The problem is that most SMBs pay under $1,000 for their cameras and recorder. So they might represent a high percentage of systems but they represent very little in terms of revenue (or real dollar based market share), which is what investors are concerned about.
I'm pretty surprised that you agreed with this number. I thought that the market in the USA, since it is more mature, was almost completely IP camera based, even for the small or medium installations. So you agree that 95% of SMB use analog cameras?
Here in Brazil, and by what I've been read about latin america market, I believe that 95% of current sells are DVRs + analog cameras, where the total cost for a 16 camera installation is around US$ 1.000 (Dahua DVR+cameras).
Do you have a research on the IP cameras versus DVRs market in the USA? I mean, how many IP cameras and DVRs are sold in the US per year? And what is the installed base for IP cameras and DVRs so far?
For DVR I mean devices capable of encoding, recording and transmiting analog cameras over TCP/IP, like Dahua, Samsung, Hikvision DVRs. So, devices that are TCP/IP too, but use analog video sources.
"So you agree that 95% of SMB use analog cameras?"
In the US, I suspect 80% of the what's installed is analog cameras, given analog's long head start and lower demands of SMB customers.
If you look at the US SMB market, there are 3 main sources of surveillance equipment:
Big box retailers - which are overwhelmingly analog, you simply cannot get IP at most Costco, Sam Club's, etc. physical locations
Small dealers - those too are overwhelmingly analog and tend to relabel low cost analog kits
Online stores - more of a mix with Amazon fairly heavily IP centric but the tons of tiny crap shops leading with analog kits
The most difficult part to analyze is the 'medium' in SMB because it depends how it is defined. Most professional installers/integrators lead with IP. To the extent that 'medium' size businesses buy from them, IP is most common.
I work for a US distributer that sells security camera products exclusively to the mid to low end markets. I can tell you that last year about 95% analog sales were accurate. This year our IP sales have gained ground but more installers still fear price and complexity of IP.
Frankly after testing many IP based "no brand systems" I don't blame them. You have to spend more money to get the quality in IP still. After a trip to the CPSE trade show in china we SAW many low end SDI and IP cameras coming out. Most are not mature enough for us to offer. But the price ceiling is coming down fast.
Expect in 3 years to have most low end IP systems competitive with low end analog.