Axis Slowing Growth - Q4 2011

By: John Honovich, Published on Feb 01, 2012

The end of 2011 marked Axis's slowest growth quarter in more than 2 years plus the company offered pessimistic guidance for the short term. While Axis is still expanding notably, especially for its size, it is down from its incredible growth pattern of the recent past. In this note, we break down the financial details and examine Axis's future plans.

Let's start with a review of key datapoints in the Axis Year End Report (see Text report and Powerpoint):

  • Axis finished 2011 with total revenue of 3578 SEK, equivalent to ~$530 Million USD, breaking the half billion mark. Their run rate at the Q4 2011 revenue level is ~$600 Milion USD.
  • However, Q4 2011 revenue growth, year over year was only 22% in local currency terms. In the past two year, 30-45% growth was far more common.
  • Axis warns of a slowdown in early 2012 claiming that it is seasonable and "in line with the trend for the same period for the same period of recent years." We find this to be suspect. One, if its seasonal, it should not impact year over year growth for any given quarter. Two, the growth in the 1st quarter of 2010 and 2011 was extremely strong. The most favorable interpretation we see of this statement is that quarter over quarter growth (between Q4 2011 and Q1 2012) will be weak. However, if Axis turns in a Q1 2012 that is weak year over year, this will be a bad sign.
  • US growth was robust but Europe and Asia lagged: While EMEA and Asia both grew ~12%, the Americas, Axis' largest geographical segment, grew at 30%. Axis claimed that weak growth in EMEA was 'in line with the market' though only 12% growth for EMEA strikes us as low for IP surveillance.
  • At the end of last year, Axis warned that the Thailand floods could "reduce sales by 10-15% over the next 3-4 months." However, in the Q4 2011 financial report that 'the impact on sales of the floods in Thailand was much lower than expected."

Industry watchers should look carefully at Axis's next quarterly report scheduled for April 2011. If Axis turns in weak year over year numbers, this would be a negative sign and show a trend.

However, we do not see any specific mistake Axis is making. Their new product development was strong throughout 2011 and no obvious self-inflicted errors are appearant.

Axis's Future Plans

One of the most interesting slides we found in Axis' presentation was about their future. While the slide is titled 'Industry Future', we see this as much more about Axis's future positioning:

The slide, in 3 major blocks, nicely summarizes Axis's development and positioning priorities:

  • Image Usability vs Pure Pixels: We see this as one of the most interesting industry battles over the next few years as vendors fight over whether more pixels or better image 'usability' at lower pixel counts is best for customers. Our test results show that image 'usability' is more important for most users than a fixation on tens of megapixels. Furthermore, if this is Axis priority number #1, expect Axis to spend heavily on 'edu-marketing' this point.
  • On board storage vs centralized storage: While centralized storage is certainly not going away, Axis clearly sees more intelligence and more resposibility for cameras as a key driver. Axis has been improving its edge storage capabilities and with growing 3rd party VMS support, we do expect it to become a more significant mainstream factor in the next few years.
  • Cloud computing: The way we read the chart, cloud computing is the lowest priority and most long term of the three elements.

Interesting to note, video analytics is left out of Axis's big 3 bullets for the industry future.

This noted, we think the foundation of image usability and on board storage are two solid pillars for future mid term growth.

1 report cite this report:

Surveillance Trends at Milestone Conference 2012 on Feb 15, 2012
Each year, the Milestone Partner conference provides an opportunity for Milestone and their manufacturer partners such as Axis to share their...
Comments : PRO Members only. Login. or Join.

Related Reports

Network Optix NxWitness 4.0 Tested on Oct 10, 2019
Network Optix released Nx Witness 4.0, proclaiming new features like a deep learning analytics metadata SDK, increased H.265 support, and UX...
Consumer IP Camera Analytics Shootout - Arlo, Google / Nest, Amazon / Ring, Hikvision / Ezviz, Wyze Cam, Yi Home on Sep 26, 2019
AI analytics are hitting the mainstream in the consumer camera market, with entrants Wyze and Yi Home releasing free people detection on their...
Directory of 70 Video Surveillance Startups on Sep 18, 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 Stratocast VSaaS Tested on Sep 05, 2019
The VSaaS market is rapidly expanding in 2019, with Verkada, Meraki, Eagle Eye, Avigilon and numerous startups growing their market share. When we...
UK Facewatch GDPR Compliance Questioned on Aug 27, 2019
Even as the GDPR strictly regulates biometrics, a UK company called Facewatch is selling anti-shoplifter facial recognition systems to hundreds of...
Proactive CCTV "Only Affordable Video Archiving Solution" Profile on Aug 12, 2019
Proactive CCTV is claiming to offer "the only affordable video archiving solution on the market", reducing the storage typically required for H.265...
Razberi Technologies Company Profile on Aug 06, 2019
Razberi says they have doubled their revenue in the first half of 2019, citing their proprietary camera hardening and cybersecurity capabilities...
Avigilon Blue VSaaS Tested on Aug 05, 2019
Avigilon says Blue is a "powerful integrator cloud service platform", easy to set up and configure, quickly scale business, by leveraging cloud...
History of Video Surveillance on Jul 19, 2019
The video surveillance market has changed significantly since 2000, going from VCRs to ab emerging AI cloud era.  The goal of this history is to...
New GDPR Guidelines for Video Surveillance Examined on Jul 18, 2019
The highest-level EU data protection authority has issued a new series of provisional video surveillance guidelines. While GDPR has been in...

Most Recent Industry Reports

Hikvision Global News Reports Directory on Oct 17, 2019
Hikvision has received the most global news reporting of any video surveillance company, ever, ranging from the WSJ, the Financial Times, Reuters,...
Camera Calculator V3.1 Release Improves User Experience on Oct 17, 2019
IPVM has released a new version of our Camera Calculator, V3.1, with significant user experience improvements, a new development plan, and an...
Securing Access Control Installations Tutorial on Oct 17, 2019
The physical security of access control components is critical to ensuring that a facility is truly secure. Otherwise, the entire system can be...
Access Control Course Fall 2019 - Last Chance on Oct 17, 2019
Register Now - Fall 2019 Access Control Course. Thursday, October 17th is the last day to register. IPVM offers the most comprehensive access...
US DoD Comments on Huawei, Hikvision, Dahua Cyber Security Concerns on Oct 16, 2019
A senior DoD official said the US is "concerned" with the cybersecurity of Hikvision, Dahua, and Huawei due to "CCP" (China Communist Party)...
Pelco Sarix Pro3 Camera Tested on Oct 16, 2019
Pelco has released their Sarix Professional Series 3 cameras, claiming "more security detail in challenging scenes with excellent low light and...
IPVM Camera Calculator User Manual / Guide on Oct 16, 2019
Learn how to use the IPVM Camera Calculator. The guide below includes instructions, images, gifs, and videos demonstrating and explaining the...
Altronix Claims Tango 'Eliminates Electricians' on Oct 15, 2019
Power supply provider Altronix claims its new Tango power supply 'eliminates the need for an electrician, dedicated conduit and wire runs'. In...
Pelco CEO Out, New CEO Found on Oct 15, 2019
Just 2 months after Pelco was sold, Pelco's CEO is out, with Pelco bringing in an outside President and searching for a new CEO from the industry,...