Is Axis IP camera dominance coming to an end?

Author: John Honovich, Published on Oct 05, 2008

IP video is becoming mainstream but Axis' IP cameras may lose their dominance in the process. Six critical issues may undermine Axis position and in the process provide consumers with more options and lower prices.

The six issues are:

  • Lower cost, good enough, IP cameras from competitors are maturing.
  • Multi-megapixel cameras from competitors are maturing.
  • Axis' new features overshoot the needs of mainstream buyers.
  • Now, traditional CCTV vendors are committed to moving into IP.
  • Industry interoperability specifications are coming
  • The recession will force buyers to prioritze low cost.

Low Cost, Good Enough Cameras Maturing

Numerous manufacturers are now providing products that offer good enough alternatives to Axis main products.  Since I have made this point before, I suggest you read my Axis vs ACTi comparison report for details.  I will only add that I have received numerous unsolicited reports (even from rival camera manufacturers) about how well ACTi is doing.  As more mainstream security buyers go to IP and expect similar pricing to analog, the lure of low cost IP cameras will become even stronger.  I do believe the costs of IP cameras is a significant issue and in an informal conversations with IP surveillance integrators from around the world, all of them cited the higher costs of IP as a key sales barrier.  If you believe that the TCO of IP overcomes this issue, see my IP cameras problem report for a rebuttal of this vendor sponsored claim.

Multi-Megapixel Cameras Maturing

Multi-megapixel cameras are the hottest segment of the IP video industry right now yet Axis has a very limited lineup for this.  Expect strong competition from specialist vendors like Arecont Vision (H.264 cameras up to 5 MP) and IQinvision (with a broad range of housing and body options). As customers continue to specify more megapixel cameras, Axis will have challenges.  While I expect Axis to respond in this area (it's premium applications like this where Axis has historically focused), Arecont Vision and IQinvision with 5 to 10 years experience focusing on megapixel will be strong competitors.

Axis Overshoots the Mainstream

Axis new product development is focused on H.264 and video analytics.  H.264 will not be very appealing for standard definition cameras as the savings relative to MPEG-4 are not terribly significant (maybe $50 or $100 reduction in storage costs). The situation is different for megapixel cameras, however, Axis' offering is currently only for standard definition.  While Axis support for video analytics is generating good interest for vendors such as Agent Vi, all the market statistics make it clear that video analytics is a small niche.  Video analytics support will be a weak factor in overcoming the significant price premium for Axis cameras.

Traditional CCTV Vendors Moving In

For the last 5 years, Axis' growth has been enhanced by traditional CCTV vendors offering limited or no IP cameras. 2008 has demonstrated that all of the big vendors are now seriously motivated to fight for IP camera market share.  Ironically, because Axis kept prices so high (while generating huge profits), other vendors now have the opportunity to undercut Axis on price, grow revenue and still make a profit. The IP camera market is also big enough now that the revenues generated justifies the opportunity.

Industry Interoperability Specs are Coming

While we may not have standards for a long time, vendors are coming together to promote interoperability.  It is clear to me that members of the PSIA are extremely motivated to implement support for a common IP camera specification.  They correctly, in my mind, realize that this is important for them to clear a barrier to entry and to attack Axis.  I would not be surprised to see many camera and video management vendors implementing the PSIA specification next year. Such support will bolster competition and reduce Axis advantage.

Recession Prioritizes Low Cost

It's clear we are in for a significant, if not severe, recession. Such conditions forces most buyers to more carefully examine and compare pricing. In recessions, buyers are more keen to make sacrifices and it's reasonable to believe many will forgo Axis advance features for lower pricing of competitor's products.

Fundamentally, it looks like Axis could wind up 'stuck in the middle' - too expensive for the mass market that wants cheap, good enough product and not strong enough in the high end market where customers want specialized products.  All the while, they will be under attack from huge companies that have finally committed to ensure that their position in the overall security camera markets is not undermined.  While I think Axis makes quality products, their strategic moves to keep prices high and focus on areas of innovation with lower customer value, could result in a significant shift in customer choices as the IP camera market matures into the mainstream.

2 reports cite this report:

Top 5 Disruptive Surveillance Companies 2012 on Dec 15, 2011
What companies are driving changes in the video surveillance industry? What companies are the toughest competitors? In this new report, we answer...
Axis Financial Results Points to Market Slowdown on Oct 17, 2008
Axis 3rd quarter results demonstrate signs of a market slowdown, most strongly in Europe but with leading indicators globally. Worldwide video...

Related Reports

ObjectVideo Acquired by Alarm.com on Mar 14, 2017
Once potentially the most recognized name in video analytics, ObjectVideo has effectively been sold for pieces. Alarm.com has now acquired what...
Hikvision People Counting Tested on Mar 09, 2017
People counting has historically been a difficult task, requiring specialized cameras, expensive software, and careful camera placement. But in the...
Positive Video Surveillance Outlook - 2017 Statistics on Mar 07, 2017
376 manufacturers and integrators revealed their outlook on the future of the video surveillance industry in a recent IPVM survey. Both groups are...
Uniview NVR Tested on Mar 02, 2017
Uniview, China's self proclaimed #3 video surveillance manufacturer behind Hikvision and Dahua, is ramping up its international sales efforts. In...
Avigilon Shifts Strategy To Maximizing Profitability (Q4 2016 Results) on Mar 01, 2017
Avigilon had previously been known for big spending, hiring a large sales force and throwing lavish partner parties at tradeshows like ISC West....
Uniview (UNV) IP Cameras Tested on Feb 22, 2017
"We're #3," in China says Uniview (UNV). While the company significantly trails Hikvision and Dahua in total sales, one notable difference is that...
Hikvision Best Alternatives Picked By Integrators on Jan 26, 2017
While Hikvision has driven the market with an unprecedented combination of low cost, support, sales and marketing expenditures, integrator...
WDR Shootout 2017: Low vs High Cost Cameras on Jan 24, 2017
Multi-exposure WDR was once only available in expensive cameras but in the past few years, this capability has become available even in sub $200...
Distributor's #1 Challenge on Jan 04, 2017
Manufacturers and integrators are not the only ones challenged in the security market, distributors are also impacted, fighting to maintain margins...
Axis CTO: Deep Learning 'Exciting Space' But Urges Caution on Dec 27, 2016
Deep learning interest is rising in video surveillance. 2016 saw: Hikvision's partnership with Nvidia Movidius launch a neural networks chip...

Most Recent Industry Reports

Everbridge Mass Notification Service Examined on Mar 24, 2017
Everbridge is expanding in the security space. In January 2017 Everbridge acquired PSIM platform IDV, and have also begun integrating with other...
Hikvision Removing Auto 'Phone Home' on Mar 24, 2017
Facing pressure over their cameras auto phoning home and their Chinese government ownership, Hikvision has begun quietly removing automatic...
Axis Camera Vulnerabilities From Google Researcher Analyzed on Mar 23, 2017
A Google security researcher has reported 6 vulnerabilities for Axis cameras, affecting multiple models and firmware versions. In this report, we...
OpenEye Takes Aim At Exacq on Mar 23, 2017
First Milestone targeted Exacq with a takeover offer, and now OpenEye is gunning for them with an offer to swap out Exacq for their cloud-managed...
Lock Keyways For Access Control Guide on Mar 23, 2017
Lock keyways can be the difference between a lock working or not. Understanding keyways is important for access control. Indeed, a member recently...
Broken Browser Support for Video Surveillance on Mar 22, 2017
Modern web browsers have left the security industry behind. Current Chrome, Firefox, and Microsoft Edge browsers do not support NPAPI plugins,...
ADI Favorability Results on Mar 22, 2017
150 North American integrators provided feedback on 6 distributors, and why they do (or do not do) business with ADI. ADI is clearly a big name in...
1 Million Dahua Devices Exposed To Backdoor on Mar 22, 2017
Statistics show that 1 million Dahua devices are publicly exposed and vulnerable to the Dahua backdoor. Despite this, Dahua has downplayed the...
Hikvision Hires Crisis Communication Writer on Mar 21, 2017
Hikvision has hired a crisis communication writer as the company ramps up its efforts to deal with the 'crisis' it feels it is facing. 'Crisis...
Glass Break Sensor Tutorial on Mar 21, 2017
Burglars often break glass windows to get into a house. Using glass break detectors in conjunction with alarm contacts is a good way to protect the...

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