This report summarizes a presentation made by Axis GM Fredrik Nilsson on the progress and future of IP cameras (presented at the Milestone Partners Conference). As the market leader in IP cameras, knowing Axis' outlook is important to analyzing industry developments. In the premium section, I offer rebuttals and contrasting viewpoints to provide professional's pointers on debated issues.
The bullet points below summarize the key points from the Axis presentation:
- 2008 was a milestone year for IP video. IP video moved from niche to mainstream as everyone was talking about IP and the incumbent analog manufacturers were advocating IP.
- 2009 should see another big break as analog sales start to decline for the first time
- By 2012/2013, IP cameras should be more than 50% of the surveillance camera market.
- Axis sees the main 3 reasons for IP videos' growth as quality, scalability and in many cases, lower TCO (total cost of ownership).
- The consumer market is driving technology and helping the growth of IP. Whereas the video surveillance market is about $10 B USD, the consumer technology market is about $700 B USD.
- Analog video surveillance is based on a 50 year old technology that is not global (NSTC/PAL/SECAM)
- The rise of H.264 is driving IP cameras, reducing storage and bandwidth r
- Though H.264 requires more processing on the client side, hardware acceleration for H.264 is becoming increasingly common on consumer graphic cards
- Bandwidth used to be a limiting factor but is now a driver of IP video with 1GB networks common
- Mobile networking is still a limitation but in a few years will be a driver
- Mesh IP networks has improved substantially with vendors now being able to deliver 180 Mb/s per radio
- High-Power PoE (802.3at) is becoming available which will enable PTZs to use PoE in 2009
- Storage continues to become cheaper and cheaper; today a 1.5TB hard drive can be bought for $126 USD putting the cost per GB under 10 cents
- Other storage improvements driving video surveillance include SSD, decentralized storage and server virtualization
- While analytics have problems with confusion and overpromising (e.g. finding terrorists in stadiums, facial recognition, aggressive behavior and bag left behind), many other analytics are drivers for IP including people counting, perimeter protection, motion detection and active camera tampering
- IP video benefits from over 50 standards currently: in resolution, compression, wireless, networking, audio, etc.
- One important standard is missing: for cameras but expect IP camera standards to be available in 2010
- Axis broke the top 10 video surveillance companies, indicating the strength and power of IP video
- Like Audi and BMW, IP video will do well in a recession as companies choose products with great value (like IP video)
- People will not go back to analog just like they would not go back to walkmans or tube tvs
- While IP video companies growth may shrink from 40-60% down to 20-30%, analog companies growth may drop from 10% to -10%
- Analog companies shrinking revenue will force many to reduce R&D expenditures which can make the shift to IP video quicker
Whether or not you agree with this outlook, it is very worthwhile to understand Axis' position.