Axis on Network Camera Trends

Author: John Honovich, Published on Feb 14, 2009

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 equirements
  • 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.

Here are key problems in Axis outlook for IP video:

  • While analog sales may decline in 2009, the magnitude of the fall in IP video sales growth is much deeper than analog. In other words, the growth gap between IP and analog is actually shrinking which means that that the transition to IP video (at least temporarily) is being slowed).
  • Given the state of the global economy and how the transition is clearly being slowed, it is certainly wishful thinking to believe that IP will be the majority by 2012 or 2013.
  • Analog video may be based on a 50 year old technology but the reality is it still offers good value (better than IP) for most deployments. Saying analog is old is more of an emotive appeal than actual analysis.
  • Hardware acceleration for graphic cards is certainly coming but the average end users uses 3 year old PCs. Most end users will not change PCs to accommodate a viewing application for video surveillance (I have learned this lesson very painfully in the field).
  • There is no way mobile networking will become a driver in the next few years. In most countries the bandwidth will not be there and even in those areas with the bandwidth, carriers will charge high rates for any application that consumes bandwidth 24/7/365 like a surveillance camera.
  • Mesh networks exhibit 180 Mb/s only in demonstrations bonding multiple radios. This is not a practical architecture for long term use with actual meshing. While mesh is valuable in niche applications, the hype continues to far outstrip the reality.
  • Using SSD or decentralized storage is still far more expensive (6x - 10x) than hard drives. Using this approach radically reduces the cost of deployments and is therefore only used in niche deployments. Also, almost none of the major VMS providers support on-board storage. This will only improve slowly and is a minor factor in the growth of IP video.
  • By 2010, it is unlikely to see anything more than limited application of camera standards. Not only is there the issue of the competing standards, it is going to take time for VMS vendors to add suport (none do so currently) as well as for the camera manufacturers. Even once we do see camera standards widely adopted, there will be significant issues with firmware and low level camera interaction that may not be resolved for years.
  • Another critical standard that is lacking is for video management systems. There is no standard for retrieving video from VMS systems and until this is resolved, legacy DVR systems will have a key advantage over IP. This is because most customers want a single user interface to view all video. Without VMS standards, the best way to accomplish this is through using a single VMS vendor. Of course, this favors the incumbent analog provider.
  • Analytics will not be a strong driver for IP. Even within the analytics that work reliably, analytics can be run centrally in servers - specifically DVRs. Already a number of DVRs have analytics pre-loaded. Expect this to become more and more common. This will dampen the value and incentive to move to IP since analog cameras can become analytic enabled through the DVR.
  • While people will not go back to walkmans (because walkmans are obsolete), analog video is still the overwhelming majority of sales. Most users do not need to switch back. They can simply keep what they have and add to their existing analog systems. This is a big difference.
  • The analogy to Audi and BMW is interesting. Does Axis want to be the market leader of all IP cameras or simply a high end niche player? Audi and BMW are niche players - 1/8th the size of Honda and Toyota. Axis continues to focus on premium products even in a new cost conscious era. Plus Axis growth is falling far faster than the budget IP camera providers. This is why I continue to believe that Axis has mispositioned itself and will be overtaken in the mass market by lower cost, good enough cameras.

1 report cite this report:

Axis Speaks on the Future of IP Video on May 02, 2009
The IP video surveillance industry frequently looks to Axis for guidance and recommendations on the future of the market. In this presentation,...

Related Reports

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....
Hikvision USA Starts Layoffs on Sep 18, 2018
Hikvision USA has started layoffs, just weeks after the US government ban was passed into law. Inside this note, we examine: The important...
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...
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,...
October 2018 Camera Course on Sep 13, 2018
Today is the last day to save $50 on the October 2018 Camera Course, register now. This is the only independent surveillance camera course,...
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...
Ambarella on Computer Vision and US Hikua Ban on Sep 10, 2018
Ambarella, a widely-used video surveillance component supplier, is betting on the rise of computer vision and is already seeing a sales impact from...
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...
IP Camera Cable Termination Guide on Sep 06, 2018
Terminating cables properly is critical to network performance, but it can be a tricky task with multiple steps. Fortunately, this task is easy to...

Most Recent Industry Reports

BluePoint Aims To Bring Life-Safety Mind-Set To Police Pull Stations on Sep 20, 2018
Fire alarm pull stations are commonplace but police ones are not. A self-funded startup, BluePoint Alert Solutions is aiming to make police pull...
SIA Plays Dumb On OEMs And Hikua Ban on Sep 20, 2018
OEMs widely pretend to be 'manufacturers', deceiving their customers and putting them at risk for cybersecurity attacks and, soon, violation of US...
Axis Vs. Hikvision IR PTZ Shootout on Sep 20, 2018
Hikvision has their high-end dual-sensor DarkfighterX. Axis has their high-end concealed IR Q6125-LE. Which is better? We bought both and tested...
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....
Hikvision USA Starts Layoffs on Sep 18, 2018
Hikvision USA has started layoffs, just weeks after the US government ban was passed into law. Inside this note, we examine: The important...
Chinese Government Praises Hikvision For 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...

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