Axis Bad Financial Results Again (Q4 2014)

Author: John Honovich, Published on Jan 30, 2015

Bad results last quarter spurred a debate about Axis performance.

Now, Axis has turned in equally bad Q4 2014 results.

In this note, we look at:

  • America's weakness and inventory drop
  • Asia's weakness
  • Avigilon and analytics
  • AVHS progress
  • Competing with VMS partners
  • Failing with smaller systems and emerging markets
  • Outlook - the new normal

*** ******* **** ******* ******* * ****** ***** **** ***********.

***, **** *** ****** ** ******* *** ** **** *******.

** **** ****, ** **** **:

  • *******'* ******** *** ********* ****
  • ****'* ********
  • ******** *** *********
  • **** ********
  • ********* **** *** ********
  • ******* **** ******* ******* *** ******** *******
  • ******* - *** *** ******

[***************]

Overall **********

**** ********* ** **** *** **** **** **% - **% growth.

*******, ** ****** *** **** *% ** ***** **********, *** second ******* ** * *** **** **** *******. *** *** year, **** *** ******** ** **%, **%, *% *** *% growth.

*** ******* ** / **** *** **** ******,***** ************* ***********'* **** *********.

Americas **** *** ********* ****

**** **** ****, ******** **** **** *% ** ***** **********. Quarter **** *******, ******* ******** ********.

**** ***** * *********** **** ** ********* ****** *** *** distributors ** * *** ****** ** *** **** ******. ** believe * ***** ****** ** **** ** **** ********* *************** and *** ****************** ** ********* ****** **** / ***** ** ****. *** ***** ** ***** ******** *** ******* ******* *** Axis *** ****** ******* **.

Asia ****

**** *** ********* ****, ** **** *% ****** ** ***** currencies. **** ** **** ****** **** *** ******** ******* **** Axis, **** **** ****, **** **% ** ****. **** ********* that "*** ******** **** ** **** *** **** ***** **** what ** ********."

** *** **** ****, ***** ******* **********, ******* ************ *********, finished **** ** **% ******* ** ~$*.* ******* *** *******.

Avigilon *** *********

**** ************ *********** / ** ****** *** ****, ****** ****:

  • "** ******* ********* *** *** *** * *** ****** ** the ****** ***"
  • "*** *** ********* ** *** ****** ** *** ********* **** we **** *** ***** **********"
  • "** ***’* **** *** ******** ** *** *********** **** ** comes ** **** ***********."

AVHS ********

**** ***** ********,****, *** ********* ** *** ** ***** '********* ******', ****** Axis ******** **** ** *** ‘**** ***** *** ******* ******’, despite ***** ******* *** *********** * ****** ***.

Competing **** *** ********

**** ** ********************* **** ***** *** ********. **** ********** **** *** ***** ****** *** **********, **** ******* ********, "*** *** ******** ***’* ********* **** ***** own ********." ******, ***** ******* *******,*********, **** ********** ***** **** **** ****** **** ***. ******* ***** ********. ***** ***** ********, etc.

**** ********** **** **** *** **** ***** *** ******** **** was ******, *********** * "*********** *** **** ******", *** **** partners **** "**** ******** *** **** ***** ****", ****** ************* that "***** *** ******** ***** **."

Failing **** ******* ******* *** ******** *******

*** ******* ******* *** **** ** **** **** **** *** ***** that ****** ** ***** ****** ** ******* ******* *** ******** markets *** **** *** ********* *** ******* ********* *** ******* to ******* ****.

****** *** **********, ***** ******* *** *** ******* ** ****, ** ********** expensive. **** ** ** ** '*****', *** ***** ***** ** 2x ** ** **** ***** *** *********** *** ******** *** small / *** *******.

******* ***********, **** ** ******** ** *** *** ****** ********, while ********* *** ***** **** **** *** $*** ** ** dome *********** (** **** **** ***** ** ****). **** ********* to ** **** **** *******, ***** *********, ******* ******* ********* ********* **** ********* ** *** ******* *** **** ****** **** of *** ******.

Outlook - *** *** ******

**** ******* ** ******* ******** **** **** ** ******** *** small ******* / *** *** ****** *** **** *** ********* results **** ******** ** ******* **** ********* **********.

*** ***** ****, **** * *** ***** ***, ** **-**% growth *** *** * ***** ** *** ****, ********* *** to *** ********** ** *** ****** *** **** ******* ** Axis ******* / *********** *********.

Comments (17)

This quarter is further evidence that Axis is ignoring the small systems / low end market

Is there any evidence that they can actually compete with the low-cost Asian manufacturers in that space?

It appears they are not even trying that much.

Look at their dome camera offerings (which are the most popular overall type). They have just 4 under $400. None of them have integrated IR.

Hikvision has 22 dome cameras, most with IR, many at half their price of Axis.

I fully believe Axis can demand a modest premium over Hikvision but not at the price gap they are today.

M-series price points are pretty competitive.

Competitive with whom? I presume you mean Panasonic, Sony, etc., right?

But the problem for all of them is the competition with Hik, Dahua, etc. For example, see Panasonic's acknowledgement in today's VMS deal.

Competitive with Geovision, Vivotek, etc...those lines.

I need to research the Dahua HDCVI a little more. It seems like a no-brainer for a retrofit/hybrid solution, but for a new install I don't think I'd be pulling coax again.

Those Taiwan manufacturers are closer to Axis, for comparable feature sets. However, there are some notable gaps, e.g., Vivotek's closest comparable to the Axis M3004.

The bigger issue is that the Taiwan companies are under just as much or more pressure from the Chinese manufacturers as the big Western brands.

Btw, for price comparisons, I am looking just at Dahua and Hikvision IP offerings. Their analog HD 'solutions' are even less than their already low cost IP ones.

Interesting comparison. I worked for an integrator that used primarily Geovision products for about 4 years. We crushed it against AXIS. It's going to be interesting to see Geovision on their heals as HIKvision emerges.

That Vivotek model looks exactly like the Geovision FD series. I suppose they're OEM's of the same manufacturer?

I'm new to this whole IPVM world. What a wealth of knowledge. I look forward to seeing your Dahua and HIKvision comparisons.

Jeff, welcome!

Good eye on the Vivotek / Geovision comparison. I am not sure myself but there's quite a lot of OEMing going on in general!

Btw, our most recent Dahua / Hikvision comparison is here: Hikvision HDTVI VS Dahua HDCVI

Agree that Axis' market position is becomimg more tenuous but since the Swedish Krona got hammered by the dollar this year I think to fairly judge their US performance you need to look at those numbers in USD.

We are looking at it in USD, i.e., local currency terms.

I think that this is no surprise to anyone. I too agree that the western manufacturers have not yet understood/reacted to what's coming from China. But when they do how will they react. Will Axis/Avigilon/Bosch... drop prices by 50%? With the manufacturing overheads that they have, can they reduce the prices by that much? It is as if we are talking about 2 different worlds. The only thing surprising for me is that we don't hear about more hardware manufacturers closing shop.

I don't think any of the big IP brands need to match Hikvison / Chinese companies. However, they need to close the gap somewhat if they don't want revenue to continue to decelerate and eventually decline.

Plus, eventually, Hikvision et al. will want / need to raise prices as they bring on more sales, marketing and support staff.

Finally, the companies being hurt the most are certainly the tier 2 and 3 analog OEMs who are either small subsidiaries of public companies or private ones. If Axis is growing at ~7%, you can be certain that those companies are seeing revenues actually deline 10-20%.

[IPVM Mod Note: Edited for clarity]

Most of our past projects were awarded to the lowest price. Only a few ever consider higher pricing with premium cameras and advanced features. For example, Axis, Arecont, Panasonic, and Hikvision offer different levels of advanced features.

For the sake of comparison, we think of our mainstream brands like this:

Highest : Axis - Premium features, with resolution same or lower that competitor

Arecont - Premium features, resolution same as competitors

Panasonic - Premium features , same software platform

Lowest : Hikvision - Generally comparable quality, warranty, and replacement as the others. Hikvision has some software features we don't like, but for the price we sacrifice the features and use/emphasize the features of the VMS instead.

We've used this approach for 2-3 years.

We have learned that:

  • You cannot justify higher cost for namesake or reputation.
  • Sometimes adding in other components for the achievable results (ie: illuminators) is a good solution.

This market is not biased to be elitist or arrogant, as with any market you must keep up and make concessions with the different options.

If Axis wants to remain dominant for the next 10 years they need to aquire competitors, market share, and complimentary technologies. They are trying to combat Avigilon but not willing to go "all in", innovation is limited to their Lund talent, and their partner ecosystem has become a ruse.

Last year, I asked, What If Axis Acquired Genetec?

That said, I still think Axis would be hard pressed to do any major acquisitions.

Why?

I agree with your point about being hard pressed to do any major aquisitions, culturally they lack the chutzpah, and feel they don't need foreign companies to help innovate.

Also, there is the real concern about blowing up the partner ecosystem. For example, if they buy Genetec (or any other major VMS) what will the remaining VMSes do? How much will they lose in undermining those partnerships?

I still think buying a big player like Genetec is a net benefit for Axis but it would not come without serious headaches.

That said, looking back, it appears foolish that Axis did not buy VideoIQ. So now Avigilon has a strong analytics core offering and Axis has dozens of weak partnerships with small analytic partners that need to be manually added on.

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Related Reports

VMS Export Shootout - Avigilon, Dahua, Exacq, Genetec, Hikvision, Milestone on Sep 13, 2018
When crimes, accidents or problems occur, exporting video from one's video surveillance system is critical to proving incidents. But who does it...
Dahua Low-Cost 4MP Camera Tested (N44CL52) on Sep 10, 2018
4MP use continues to increase, especially in low-cost models, according to integrators in our 2018 Resolution Usage Statistics. We bought Dahua's...
Directory Of 110+ Video Management Software (VMS) Suppliers on Aug 30, 2018
This directory provides a list of Video Management Software providers to help you see and research what options are available. Listing...
Inputs/Outputs For Video Surveillance Guide on Aug 24, 2018
While many cameras have Input/Output (I/O) ports, few are actually used and most designers do not even consider them. However, a good understanding...
Luxriot VMS Profile on Aug 23, 2018
Luxriot is more popular than Hikvision and Milestone products according to ASMAG which was probably even surprising to Luxriot. The company has...
Synology Surveillance Station VMS Tested on Aug 22, 2018
With so many low-cost NVRs and enterprise VMSes, is there any place in the market for NAS-based VMSes? Recently, IPVM bought a Synology NAS for...
SNMP / Network Monitoring For Surveillance 2018 on Aug 21, 2018
Surveillance systems typically rely on the the VMS to report issues, but this most often just means knowing a camera is "down" with no warning or...
Axis Strong Q2 2018 Results on Aug 20, 2018
Axis reported strong Q2 2018 financial results and, for the first time in many years, Axis grew faster than Hikvision. However, the company's...
Video Analytics Integration Guide on Aug 16, 2018
Video analytics is hot again (at least conceptually) but integrating video analytics with VMSes can be challenging. This is especially significant...
ISS VMS / Video Analytics Company Profile on Aug 16, 2018
Who is ISS? In the past few months, they had one of the craziest ISC West promo items in years. Then, they hired industry veteran and ex-Dahua...

Most Recent Industry Reports

Avigilon Announces AI-Powered H5 Camera Development on Sep 19, 2018
Avigilon will be showcasing "next-generation AI" at next week's ASIS GSX. In an atypical move, the company is not actually releasing these...
Favorite Request-to-Exit (RTE) Manufacturers 2018 on Sep 19, 2018
Request To Exit devices like motion sensors and lock releasing push-buttons are a part of almost every access install, but who makes the equipment...
25% China Tariffs Finalized For 2019, 10% Start Now, Includes Select Video Surveillance on Sep 18, 2018
A surprise move: In July, when the most recent tariff round was first announced, the tariffs were only scheduled for 10%. However, now, the US...
Central Stations Face Off Against NFPA On Fire Monitoring on Sep 18, 2018
Central stations are facing off against the NFPA over what they call anti-competitive language in NFPA 72, the standard that covers fire alarms....
Chinese Government Praises Hikvision Following Xi Jinping on Sep 17, 2018
The Chinese government council responsible for managing China's state-owned companies praised Hikvision’s obedience to China’s authoritarian leader...
Amazon Ring Spotlight Cam Tested on Sep 17, 2018
Amazon's Ring has released their latest camera entry, the Spotlight Cam, which we bought and tested in our Consumer IP Camera Analytics...
European Mega Security Firm Verisure Pushing Security Fog on Sep 17, 2018
The European mega security firm Verisure (Securitas Direct), with a reported 2 million customers, is pushing security fog, as shown in this BBC...
IP Camera Cable Labeling Guide on Sep 14, 2018
Labeling cables can save a lot of money and headaches. While it is easy to overlook, taking time to label runs during installation significantly...
Favorite Intercom Manufacturers 2018 on Sep 14, 2018
Intercoms are certainly increasing in popularity, driven by the integration of video and IP networking. But who is the favorite? On the one side,...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact