Axis Enters Thermal Camera Market (Q1910-E)
Axis has entered the thermal camera market with potentially disruptive pricing and positioning. Axis's first thermal offering - the Q1910/-E (indoor and outdoor options available) is an IP camera with an MSRP of $2,999 for the indoor and $3,499 for the outdoor model. The camera supports H.264, PoE, ONVIF and will be compatible with the broad base of 3rd party VMS that integrate with Axis. These cameras also support the Axis Camera Application platform allowing video analytics to run on-board.
Compared to FLIR
FLIR is the 800 pound gorilla in the security thermal camera market with a very extensive product portfolio - fixed, PTZs, low resolution, high resolution, numerous lens options, analog, IP, cooled, uncooled, etc. However, FLIR's IP offerings have limited 3rd party VMS support and tend to be quite expensive.
Axis's thermal cameras have their own limitations -- a single lens option (17 degrees), a single low resolution (160 x 120) and a single form factor (fixed box). While Axis entry is inexpensive and benefits from its extensive VMS support, use of these cameras will be constrained by lack of product options. Axis plans to introduce new thermal cameras and may release 1 to 3 lens options in 2010.
Update Feb 2, 2010: FLIR has announced matching low priced thermal network cameras.
The most common benefits / reasons for using thermal compared to IR or color cameras are:
- Longer distance detection at night: Because thermal cameras depend on heat rather than visible or near IR light, thermal cameras can view far greater distances that traditional security cameras. While high end 850 nm IR cameras can detect people at about 100 meters, even low end thermal cameras can detect people at double or triple that range. Mid to high end thermal cameras can detect people and vehicles multiple kilometers from the camera. See FLIR's range chart [link no longer available] for examples of common detection ranges. We view longer distance detection as the most common and economically quantified benefit for surveillance applications because it can reduce total camera count and associated infrastructure costs.
- View people through moderate obscurants: Traditional surveillance cameras depend on light which can be obscured by glare from windows, smoke, fog, light vegetation, etc. Since thermal cameras do not 'see' light but only heat, they can provide better detection through common obstacles for traditional surveillance cameras. This is important in higher security applications and for minimizing false alerts for video analytic applications.
- Fully covert: Since thermal cameras need no light, they can be used in total darkness. By contrast, the most common form of IR cameras (850 nm) produce a visible red glow. In higher security environments, this can be detriment or prohibited as this glow can provide attackers with information on camera positioning. However, this is not commonly required in the commercial market.
- Low power consumption: While not commonly cited as an advantage by traditional thermal vendors, we believe the use of PoE for thermal IP cameras will provide important cost savings in deploying infrastructure. 850nm or 940nm IR cameras require substantial power, even for surveillance at modest ranges (100 meters or less) - 20 - 30 watts is not uncommon. By contrast, thermal IP cameras can eliminate the pulling of power cable, an often costly expense for outdoor surveillance.
Current State of Thermal Market
The use of thermal cameras is quite broad and extends far beyond security.
FLIR's 2009 Investor Relations [link no longer available] presentation provides a market size segmentation table:
While FLIR's annual revenue is over $1 Billion USD, only a fraction of that comes from video security/surveillance. The surveillance market is a part of the commercial division at FLIR recording approximately $200 Million USD in 2009 revenue.
The use of thermal cameras in video surveillance is quite small. Statistically speaking, it's certainly less than 1 out of 100 cameras used and could be as low as 1 out of 1000 cameras. The number one constraint overall is certainly cost. The number two constraint for the IP video surveillance market is likely the need for 3rd party encoders which adds more complexity and cost (though relatively small given the high price of thermal cameras, in the first place).
Contrast Products / Pricing Between FLIR offerings and the Axis Q1910
FLIR offers a very broad portfolio of cameras for the thermal market. While a proper treatment of FLIR's portfolio requires a future dedicated report, readers should note some of the key categories:
- Lower cost analog thermal fixed cameras from their SR series
- IP thermal fixed cameras with a variety of resolution and lens options from their F series
- Dome thermal cameras with pan / tilt capabilities from their D series (indoors and outdoors)
- Cooled thermal cameras providing multiple mile detection ranges from their HRC and Ranger series
- A mini-thermal camera that is designed for the automotive market but is sometimes used in the security applications though not recommended (the PathFindIR)
- A real-time monitoring system that provides advanced capabilities and integration (the Flir Sensor Manager [link no longer available])
Good and Poor Applications for the Axis Q1910 Thermal Camera
The two main constraints of the Axis Q1910 are:
- 17 degree horizontal Field of View
- 160 x 120 resolution
How this Can Help the Video Analytics Market
Thermal cameras improve video analytic performance by eliminating many of the common causes of false alerts (caused by lighting variations) and by increasing the contrast of humans to the background.
The major historical drawback of using thermal is the cost and complexity of deploying video analytic solutions using thermal cameras. With the Axis thermal cameras, at a price point not significantly higher than IR cameras and with broad 3rd party support, it should make it a lot easier to use thermal.
As we noted in our examination of the Axis camera application platform, important questions exist as to the processing power of running video analytics inside Axis current cameras. However, this may be offset by the 'improved' images thermal offers for video analytics. Ultimately this is a question of testing. Even if the analytics are not run inside the camera, the lower price point and simple integration will make it easier to use with server based analytics.
What this Means for Axis's Overall Strategy / Competitiveness
Entering the thermal market allows Axis to be a low end disruptor in a traditionally very high market. Already a fairly sizable market (perhaps $100 Million annual sales in surveillance thermal cameras), we think Axis has an opportunity to not only rapidly increase sales but to grow the overall market size by providing a simpler and less expensive solution. We think it is unlikely that Axis can steal market share from FLIR in the mid to high end of the thermal video surveillance market. However, this may be more than offset by Axis's ability to grow the thermal market by motivating new users of thermal cameras.
Given Axis's annual revenue of approximately $300 Million USD, we think thermal cameras can provide a significant but not huge growth opportunity of perhaps 10% total revenue in 3 years. They may also be able to maintain profitable growth as they will be primarily competing with large providers accustomed to high prices and high margins from large security operations.
On the other hand, we believe this is another sign that Axis is content to allow the low end IP camera market to be controlled by Asian manufacturers. We think this poses significant long term risk as these competitors can continue to move up market and, in the long term, threaten Axis strengths in the mid to high end of the market. From a financial perspective, Axis may be able to offset those losses from gains in disrupting higher end markets (like thermal). However, as a practical matter for integrators and users looking for budget IP cameras, we see this as a sign to continue to look outside of Axis.