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

Arcules Cloud VMS Tested on Nov 19, 2018
Arcules is a big bet, or as they describe themselves a 'bold company', spun out and backed by Milestone and Canon.  But how good is Arcules cloud...
Beware Amazon Go Store Hype (Tested) on Nov 13, 2018
IPVM's trip to and testing of Amazon Go's San Francisco store shows a number of significant operational and economic issues that undermine the...
Genetec Privacy Protector Tested on Nov 12, 2018
Genetec has built Kiwi Security's Privacy Protector into Security Center, an analytic which anonymizes individuals in cameras' fields of view...
Kogniz Silicon Valley AI Startup Profile on Nov 07, 2018
Kogniz is a Silicon Valley company that aims to bring AI analytics to security and surveillance, centering on their own smart cameras: We spoke...
Avigilon Opens Up Analytics And Cameras on Nov 06, 2018
Avigilon is opening up. The company historically famous for advocating its own end-to-end solutions and making it harder for 3rd parties to...
Network Cable Shootout - Belden, Hikvision, Honeywell, NavePoint CCA, Windy City Wire on Nov 05, 2018
Every IP camera install needs UTP cabling. But how much of a difference is there between dirt cheap generic cables found online and the bigger,...
Best Alternatives to Banned Dahua and Hikvision on Oct 17, 2018
With the US government ban and a growing number of users banning Dahua and Hikvision, one key question is what to use for low cost? While Dahua and...
Huawei Admits AI "Bubble" on Oct 16, 2018
A fascinating article from the Chinese government's Global Times: Huawei’s AI ambition to reshape industries. While the Global Times talks about...
Dahua Face Recognition Camera Tested on Oct 15, 2018
Dahua has been one of the industry's most vocal proponents of the value that AI creates: As part of this, Dahua has released a facial...
IACP 2018 Police Show Final Report on Oct 08, 2018
IPVM went to Orlando to cover the 2018 IACP conference, the country's largest police show (about as big as ASIS), examining the 700+...

Most Recent Industry Reports

Milestone Disrupts Milestone With Arcules on Nov 19, 2018
Milestone is now competing against... Milestone's own spinout Arcules New IPVM testing shows that Arcules has incorporated a substantial amount of...
Pressure Mounts Against Dahua and Hikvision Xinjiang Business on Nov 19, 2018
Pressure is mounting against Hikvision, Dahua, and other companies operating in Xinjiang as an international outcry brews against the Chinese...
Arcules Cloud VMS Tested on Nov 19, 2018
Arcules is a big bet, or as they describe themselves a 'bold company', spun out and backed by Milestone and Canon.  But how good is Arcules cloud...
'Sticker' Surveillance Camera Developed (CSEM Witness) on Nov 16, 2018
The Swiss Center for Electronics and Microtechnology (CSEM) has announced what it calls the: world’s first fully autonomous camera that can be...
ISC East 2018 Mini-Show Final Report on Nov 16, 2018
This is our second (updated) and final show report from ISC East. ISC East, by its own admission, is not a national or international show, billed...
Facial Detection Tested on Nov 16, 2018
Facial detection and recognition are increasingly offered by video surveillance manufacturers. Facial detection detects faces in an image/video...
Throughtek P2P/Cloud Solution Profile on Nov 15, 2018
Many IoT manufacturers either do not have the capabilities or the interest to develop their own cloud management software for their devices....
ASIS Offering Custom Research For Manufacturers on Nov 15, 2018
Manufacturers often want to know what industry people think about trends and, in particular, the segments and product they offer.  ASIS and its...
Hikvision Silent on "Bad Architectural Practices" Cybersecurity Report on Nov 14, 2018
A 'significant vulnerability was found in Hikvision cameras' by VDOO, a startup cybersecurity specialist. Hikvision has fixed the specific...
French Government Threatens School with $1.7M Fine For “Excessive Video Surveillance” on Nov 14, 2018
The French government has notified a high-profile Paris coding academy that it risks a fine of up to 1.5 million euros (about $1.7m) if it...

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