Axis Slow Growth Continues Q2 2013

By: John Honovich, Published on Jul 09, 2013

If there was any doubt, Axis' most recent financial results should erase them. Axis is now in the midst of an extended, multi-year period of slow growth. While the company trumpeted top spots in various rankings, their financials paint a far more modest and troubling picture. In this note, we break down what is happening, what is working and where Axis is most struggling.

Quarterly Financial Key Metrics

*** **** *********** ******* ********* in **********************:

  • **% **** **** **** growth ** ***** **********, fairly ********** **** *** average **** *** **** 2 *****.
  • ******* ****: **************, ******** *** *** best, ******* ** **% year **** **** ** local **********. ****, ******** are *** **% ** Axis' ******* *******, ********** to **** ******.
  • **** *****: **** **** *************, Axis ********* ** ******** in ******, ******* ** EMEA **** *% ** local **********.
  • **** ***********: ***** **** **** in **** **% **** over **** ** ***** currencies, ** ** **** a **** ****. **** still **** ******** *** 12% ** ****' ******* revenue. *****, **** ** widely ******** ** *** fastest ******* ************ ******* in *** *****, ****** the **% ***** ******* for *** ******.

  • *******, **** ***** *** net, ******** ****** ******.
  • ****** ***************** **** ** ~$*.** Billion (******** *****).

****

**** ************ **** ********* and ***** **** *** market ******* ** *****, a ****** **** **** finds ** '********* *********'. While **** **** ** "be ***** ****** ******" in ****, **** ***** no **** **** ** achieve ****.

**** ***** ******* **** was ****** ** ****** market *****, **** *********** saying **** "**** ***** reasonably **** ** *** Chinese ******."

**** **** **** *** to **** ***** ** fast ** ******** ******* than ********** ****, ****** this *** *** **** occurring ********.

******************

**** ***** ***** ********** analytics, **** ********* ***** traditional ******* ***** ******** (like****) *** **** ***** potential ************* ** ** it ********** ****** ******** or **** ** *** ons.

********

**** **** ***** ** rather '**** ***********' **** increases ** **** ***** offset ** ********* ** product *******. **** '****** sales *** **** ******" than ******* ***** *** would *** ******* *** details ****** ****** ******** were **** **% ** revenue.

*** *** ****** ******

**** ****** **** ********** was *** *** ****** driver, *********** *** ********** now ** ***** *******, calling *** *** *********** feature.

The ****** ** ****

** *** ***** ****, on ***********'* ****, **** ***** **** "project ******** ******* **** to **** * ** 5 ********," ***** ******* not ** ****** **** acceleration ***** *** ******* range.

*** ****** **** ******** to ********* **** *** report **:

"**** *** ******** ****** research ************ ******** *** long-term ****** ****** ********* for *** ******* ***** market ** ************* **-** percent ********. ** ********* factor *** ********* ****** growth ** ********* *********** in ******* ************* *** in ******** *******."

** ** ******** ** the***** ************ ****, ** *** ********* of ******** ****** ***********. Unless **** *** ***** that ** *** ** a ***** ****** ** Asia (*.*., *** ******* 'emerging *******'), ** ** hard ** ******* *** it *** ******** **** growth ****. 

* *** ***** *** both ******* ************* *** emerging ******* ** ***** sensitive, ******* ******* *** buyers. ******* ** ***** are ********** **** *********. While **** *** ** attractive '** ***' ******** in****** ************ *** **** ***** strides ** *********** *** cost *******, ** *** last ****, **** **** lower **** ********* **** undercut ****, **** *** emergence ** *****, ** a ******* ** ****, plus *** ********* ********* of *********, *******, ***.

****** **** ********** * number ** ***** *********** new ******** ** *** last **** (**** ******* the ****** *** ******** and ***** ***** *********), the ****** ** ******** up ** *********** (**** better *** ***** *********, more ********** ** *******), and *********** ** **** ********** on ********** **** ****** ********.

**** ***** ****** *** 'safest' *** ******** ***** of ** ******* ** the ****** ***** **** *** ** match ** ******* *** market (** ***** ******* large ****), **** *** going ** **** ** reinvigorate ***** ********* ** the **** ****.

Comments (6)

Btw, on the Investor's call, the most frequent topic questioned was on emerging markets/Asia/China, showing the importance than investors are putting there.

It's going to be very interesting if they figure out a way to penetrate that market. They would almost need to completely rethink their strategy and either offer Asian market only cameras at much cheaper rates to possibly just re-boxing/rebranding cameras in those markets - similar to what GM/Ford have done in those markets. Buy out a large Indian or Vietnamese manufacturer and rebadge the products. Otherwise it could be quite the struggle there (as they have seen already).

Another option for them would be to partner / sell the boards chipset (which they do very well) as OEM and let a local put it into whatever housing is needed

It addresses the cultural issue of selling from / to Asian based MFRs as well as price since it would not be sold under the Axis brand

I doubt selling a board camera would be a good strategy. They're probably having their modules built in China anyway. Their only value add would be their encoder chip, their software, and the effort they put into image tuning in that software build. Unless that value add is perceived as huge, their margins will be very low. In my experience, the cheaper cameras win out without a lot of value added because they're "good enough" for many buyers.

It's pretty obvious that Axis cannot win in China but does it really matter?

With all due respect to Sean's recommendation for Axis to "Honeywell themselves" :), a premium positioned manufacturer is fundamentally unequipped to play a game based on low cost and political connections in a foreign country.

Even if Axis really tried hard, who realistically believes that China will continue to grow like it has unabated for the next 5 or 10 years. There's going to be correction, perhaps a very hard one. And once that happens, all the consternation about what to do to get into the Chinese market will dissipate.

More than one year Axis is desparately pushing every possible sales channel. They are losing / lost their exisiting long term partners/security solution suppliers, and trying the distribution business to be handled by wholesellers which are just box movers....

Very good products, and excellent product quality. But unfortunately, sales management can not catch up the same. Two major targets on their focus of growth are small systems, and emerging markets as it was stated in their Q2 interim report. It seems a little bit difficult to get big market share in those segments. Rivals, and low cost manufacturers are already there, and especially low cost products from certain manufacturers are working quite good while still competitive.

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Related Reports

Directory of 55 Video Surveillance Startups on Jun 25, 2019
This directory provides a list of video surveillance startups to help you see and research what companies are new or not yet broadly known. 2019...
Genetec Beats Milestone For IHS #1 on Jun 21, 2019
For years, Milestone has touted that they are the #1 VMS. Now, Genetec has beaten them in IHS rankings. But what is this? Even other manufacturers...
Startup Vaion Launching End-to-End AI Solution Backed with $20 Million Funding on Jun 17, 2019
An EU / USA video surveillance startup, Vaion, founded by ex-Cisco Senior Directors is launching an end-to-end VSaaS platform with $20 million in...
Sighthound Transforms Into Enterprise AI Provider Profile on Jun 14, 2019
Sighthound is now rapidly expanding its R&D team, building an enterprise AI service. This may come as a surprise given their origins 6 years...
False Verkada 'Unrivaled' Low Light Performance Claim Removed on Jun 12, 2019
Verkada falsely claimed that it delivered 'UNRIVALED LOW LIGHT PERFORMANCE' until IPVM questioned. In fact, Verkada's low light performance is...
Carnegie Mellon AI Startup Zensors Profile on Jun 11, 2019
Zensors is a startup formed by Carnegie Mellon graduates from a Carnegie Mellon research project, offering customized models per camera that they...
Startup Rhombus Systems Says Twice the Features, Half the Price of Verkada on Jun 04, 2019
Closed cloud systems may be the fastest growing segment of video surveillance with Meraki and Verkada. Now another California company is joining...
China / US Trade War Impact Splits Industry on Jun 04, 2019
As the trade war continues to heat up, 170+ integrators told us "What impact will the US / PRC China conflict have on the industry?" Respondents...
Panasonic Sells Off / Spins Out Security Business on Jun 02, 2019
Panasonic has sold off its security systems business to a private equity firm, after suffering years of challenges. The new company, which will...
Verkada Favorability Results 2019 on May 29, 2019
Verkada has taken the industry by storm with the fastest growing video surveillance sales organization ever and a half billion dollar valuation....

Most Recent Industry Reports

Hikvision Colorvu Camera Tested on Jun 24, 2019
Hikvision says their new ColorVu line captures "vivid chromatic images in darkness", with unconventional white light illuminations whereas most...
China Subway Facial Recognition System Examined on Jun 24, 2019
A China city of 6+ million people has installed facial recognition-enabled gates in subways, allowing commuters to enter stations by simply showing...
HID Mobile Tested on Jun 21, 2019
HID Global is one of the largest access brands, but their mobile access has had challenges. Indeed, the company has already restructured their...
Genetec Beats Milestone For IHS #1 on Jun 21, 2019
For years, Milestone has touted that they are the #1 VMS. Now, Genetec has beaten them in IHS rankings. But what is this? Even other manufacturers...
Risk of Amazon Alexa Guard: No Battery Or Cell Backup on Jun 20, 2019
Amazon positions its Alexa Guard Service as a "smart home security system" and says it can help you "keep your home safe". However, the...
Exacq Remote Cloud Access Tested on Jun 20, 2019
Remote cloud access has been missing from most VMSes (including Exacq and Milestone). Now, Exacq, after releasing Cloud Drive Storage earlier in...
Briefcam Buys Frost Award* on Jun 20, 2019
Frost 'awards' are well-known and widely disrespected. Now Briefcam is touting their win. The way it has worked for many years is that Frost...
IFSEC 2019 Show Report on Jun 19, 2019
The UK's largest trade show, IFSEC, is underway and IPVM has been examining what is new and happening at the show. Inside, we cover: Huawei...
Repositionable Multi-Imager Camera Shootout - Avigilon, Axis, Dahua, Hanwha, Hikvision, Panasonic, Vivotek on Jun 19, 2019
Repositionable multi-imager cameras are one of the fastest growing segments in video surveillance, with a slew of new offerings being recently...
Genetec Synergis Cloud Link - Complex, Costly and Confusing on Jun 18, 2019
Genetec's Synergis Cloud Link is complex, costly and confusing compared to competitor access control architectures. Inside this note, we examine...

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