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

The most significant details disclosed in their financials include:

  • 12% year over year growth in local currencies, fairly consistent with the average over the last 2 years.
  • America Best: Geographically, Americas did the best, growing by 19% year over year in local currencies. Plus, Americas are now 55% of Axis' overall revenue, continuing to gain ground.
  • EMEA Worst: Like many manufacturers, Axis continues to struggle in Europe, growing in EMEA only 1% in local currencies.
  • Asia Disappoints: While Axis grew in Asia 16% year over year in local currencies, it is from a tiny base. Asia still only accounts for 12% of Axis' overall revenue. Worse, Asia is widely regarded as the fastest growing geographical segment in the world, making the 16% below average for the region.

  • Profits, both gross and net, remained fairly stable.
  • Market capitalization for Axis is ~$1.75 Billion (see stock quote).

Asia

Axis acknowledged that Hikvision and Dahua were the market leaders in China, a market that Axis finds as 'extremely important'. While Axis aims to "be clear market leader" in Asia, they offer no real plan to achieve that.

When asked whether Axis was taking or losing market share, Axis equivocated saying they "were doing reasonably well in the Chinese market."

Axis says they aim to grow twice as fast in emerging markets than developing ones, though this has not been occurring recently.

Including Analytics

When asked about monetizing analytics, Axis mentioned their traditional partner based approach (like ACAP) but also noted potential opportunities to do it themselves either included or sold as add ons.

Get Notified of Video Surveillance Breaking News
Get Notified of Video Surveillance Breaking News

Encoders

Axis says there is rather 'flat development' with increases in unit sales offset by decreases in product pricing. Said 'camera sales are much bigger" than encoder sales but would not specify any details beyond saying encoders were over 10% of revenue.

The Top Market Driver

Axis denied that resolution was the top market driver, emphasizing the importance now of image quality, calling out its Lightfinder feature.

The Future of Axis

In the short term, on the Investor's call, Axis noted that "project pipeline similar pace to last 4 or 5 quarters," which implies not to expect much acceleration above the current range.

The longer term guidance to investors from the report is:

"Axis and external market research institutions estimate the long-term global growth potential for the network video market at approximately 20-25 percent annually. An important factor for continued strong growth is increased penetration in smaller installations and in emerging markets."

As we examined in the China Surveillance Skew, we are skeptical of applying global projections. Unless Axis can prove that it can be a major player in Asia (i.e., the biggest 'emerging markets'), it is hard to imagine how it can approach that growth rate. 

A key issue for both smaller installations and emerging markets is price sensitive, minimal feature set buyers. Neither of these are historical Axis strengths. While Axis has an attractive 'no VMS' offering in Camera Companion and has made great strides in introducing low cost cameras, in the last year, many more lower cost offerings have undercut Axis, from the emergence of Dahua, to a revival of ACTi, plus the continued expansion of Hikvision, Vivotek, etc.

Though Axis introduced a number of solid incremental new products in the last year (most notably the covert P12 offering and their first panoramic), the market is catching up on Lightfinder (with better low light offerings, more integrated IR options), and their vision of apps everywhere on cameras has made little progress.

Axis still offers the 'safest' and broadest array of IP cameras on the market but if they are to match or outgrow the market (at their already large size), they are going to need to reinvigorate their offerings in the next year.

Comments (6) : Members only. Login. or Join.

Related Reports

Worsen: Integrators Hit Even Harder By Coronavirus on Mar 30, 2020
Integrator's problems have worsened over the past 2 weeks, according to new...
NetPosa's Terrible Situation Worsens on May 19, 2020
NetPosa is fighting for its existence as the situation worsens for what was...
Free IPVM All Access - Concluded! on Mar 18, 2020
The 2-day event has concluded. Thanks to everyone who accessed the IPVM...
Bottom: Integrators Start To Stand Vs Coronavirus on Apr 20, 2020
Good news - IPVM integrator statistics show that while coronavirus has hit...
Don't Deceive. Lessons From Scott Schafer on Mar 20, 2020
Deception is bad. We can learn some important lessons from Scott Schafer, a...
Sperry West / Alibaba Tablet Temperature Measurement Tested on Jul 07, 2020
In April, we ordered a ~$500 temperature tablet from Alibaba. We set it to...
Dahua Revenue Plunges, 3 Execs Resign on Apr 29, 2020
Dahua's sales dropped by 19.47% in the first quarter of 2020 amid the...
Coronavirus Hits Manufacturers, Standing Now, Worse To Come on Apr 06, 2020
Coronavirus is hitting security manufacturers, though overall modestly for...
Integrators Rising Against Coronavirus on May 27, 2020
IPVM integrator statistics make it clear - Coronavirus's impact on business...
Sunell Panda Cam Body Temperature Measurement Camera Tested on May 14, 2020
Sunell is far less well known than its gargantuan domestic competitors Dahua...
Hikvision Global Revenue Falls, Hit By Coronavirus on Apr 27, 2020
Hikvision's global revenue fell in the first quarter of 2020 due to the...
China Manufacturer Suffers Coronavirus Scare on Feb 20, 2020
Uniview suffered a significant health scare last week after one of its...
PSIM CNL Acquired By Everbridge on Mar 09, 2020
The end has finally come for CNL. Despite for years saying they would...
Dahua, Hikvision, ZKTeco Face Mask Detection Shootout on Jun 19, 2020
Temperature tablets with face mask detection are one of the hottest trends in...
Anixter Runs Fake Coronavirus Marketing Using Shutterstock Watermarked Images on Jul 24, 2020
Coronavirus faked marketing is regrettably commonplace right now but Anixter...

Recent Reports

Dahua Taunts Australian Government, Continues To Sell Illegal Fever Cameras on Aug 10, 2020
Dahua is effectively taunting the Australian government by continuing to sell...
HID Releases VertX Replacement Aero on Aug 10, 2020
HID is replacing two established and broadly supported types of access...
NDAA Compliant Video Surveillance Whitelist on Aug 10, 2020
This report aggregates video surveillance products that manufacturers have...
Telpo China Temperature Tablets Tested on Aug 10, 2020
The provider for overseas companies ranging from Canon Singapore to US'...
Dangerous Hikvision Fever Camera Showcased by Chilean City on Aug 07, 2020
Deploying a fever camera outdoors, in the rain, with no black body, is...
"Grand Slam" For Pelco's PE Firm, A Risk For Motorola on Aug 07, 2020
The word "Pelco" and "grand slam" have not been said together for many years....
FLIR Stock Falls, Admits 'Decelerating' Demand For Temperature Screening on Aug 07, 2020
Is the boom going to bust for temperature screening? FLIR disappointed...
VSaaS Will Hurt Integrators on Aug 06, 2020
VSaaS will hurt integrators, there is no question about that. How much...
Dogs For Coronavirus Screening Examined on Aug 06, 2020
While thermal temperature screening is the surveillance industry's most...
ADT Slides Back, Disappointing Results, Poor Commercial Performance on Aug 06, 2020
While ADT had an incredible start to the week, driven by the Google...
AHJ / Authority Having Jurisdiction Tutorial on Aug 06, 2020
One of the most powerful yet often underappreciated characters in all...
SIA Coaches Sellers on NDAA 889B Blacklist Workarounds on Aug 05, 2020
Last month SIA demanded that NDAA 899B "must be delayed". Now that they have...
ADI Returns To Growth, Back To 'Pre-COVID Levels' on Aug 05, 2020
While ADI was hit hard in April, with revenue declining 21%, the company's...
Exposing Fever Tablet Suppliers and 40+ Relabelers on Aug 05, 2020
IPVM has found 40+ USA and EU companies relabeling fever tablets designed,...
Indian Government Restricts PRC Manufacturers From Public Projects on Aug 04, 2020
In a move that mirrors the U.S. government’s ban on Dahua and Hikvision...