Can Everfocus Make Megapixel Simple and Inexpensive?

Author: John Honovich, Published on Jun 28, 2009

Two key problems for megapixel cameras are (1) their substantially increased cost relative to analog cameras and (2) the complexity of using IP. 

For the high end, this is not a problem. Indeed, the use of IP can be a benefit for larger corporations.

However, for the lower end, the 'budget' segment, cost and complexity are a significant barrier (even inexpensive 1080p cameras like the Vivotek IP7161 are twice the cost of an analog camera). Indeed, the traditional strength of Everfocus is providing inexpensive basic products like $1,000 USD 16 channel DVRs for this part of the market.

With the recent launch of the HDcctv Alliance and Everfocus' key role, Everfocus is positioning itself to be at the forefront of simple and inexpensive megapixel solutions.

At the lower end of market, I believe that Everfocus has a strong chance to accomplish this and dent the expansion of IP into this portion of the market.

Company Overview of Everfocus

Everfocus is a fairly large company. According to the 2008 ASMAG Security 50, Everfocus ranks 19th among security manufacturers with over $100 M USD revenue. This is ahead of companies like March Networks, Vicon, Vivotek and Mobotix.

According to Everfocus, approximately 2/3rd of the companies revenue is from branded business while 1/3rd is from OEM/ODM partnerships.

Everfocus is a publicly traded company on the Taipei stock exchange. Financial reports are available (though only in Chinese). According to their most recent report (their Q1 2009 statement), revenue dropped about 10% compared to Q1 2008 (from $614M NTD to $555M NTD).

Everfocus is one of the 4 founding members of the HDcctv Alliance. Additionally, the Chairman of the HDcctv Alliance was until a few months ago, an Everfocus executive.

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HDcctv Everfocus Product Overview

According to Everfocus, their HDcctv product offering is likely to consist of two major components:

  • Expansion of their branded line for value/entry level markets: Everfocus offers a number of DVR series - all quite inexpensive (usually $2,000 or less per DVR), none providing enterprise management nor extensive 3rd party integration. They will offer HD versions/models of their DVR lines that add in a fixed number of HDcctv inputs. While exact inputs have not been publicly released, combinations of HD and analog inputs will be provided such as 2 HD and 6 analog or 4HD and 12 analog, etc. Recording will likely go up to 1080p with low frame rates (7.5 fps or less). Cost is only projected to be slightly more than current analog versions. A similar approach is planned for HD cameras with resolutions up to 1080p and cost moderately more than analog cameras (but far less than IP).
  • Tribrid DVRs will be introduced but primarily offered through their ODM/OEM partners. These units will support analog, HDcctv and IP cameras. Some of these units may offer modular card inputs that allow users to add HD inputs over time as they expand their use of HDcctv cameras.

Competitive Comparison to IP Megapixel Offerings

Analog CCTV is especially strong in the low end of the market where small camera counts, installation simplicity and low cost are key. Today, you can buy a 16 channel DVR for $1,000 to $2,000 USD, cameras at $200 USD each (or less). A low level technician with minimal IT skills can wire and set up an 8 channel system in a day (depending on the length/complexity of the cable runs, etc.).

The strongest alternative from the IP side are the budget offerings that companies like ACTi, Vivotek and DLink offer. The key elements of these offerings are:

  • Using a PC as the DVR, eliminating the cost of buying a dedicated/specialized DVR.
  • Providing free IP video surveillance software for use with the vendor's own IP cameras. This essentially means the material cost of the IP 'DVR' is simply the price of the PC.
  • Providing lower cost IP megapixel cameras. 1.3 MP cube cameras routinely run in the $200 - $275 USD price range. 1.3 MP Box cameras that allow for varifocal lenses are usually in the $300 - $400 USD price range. Finally, 2MP / 1080p box cameras are starting to come into the market at just under $500 USD.  These are fairly inexpensive, often 50% of the price of the premium IP camera vendors such as Axis, Panasonic and Sony.

Until the launch of HDcctv, IP had a clear advantage in resolution. Analog systems might be cheaper or simpler but IP could offer significantly higher resolution. Higher resolution IP cameras often result in less total cameras needed, providing a lower total system cost.

With HDcctv, the resolution advantage of IP is eliminated. The choice now shifts to cost. HDcctv manufacturers, including Everfocus are claiming HDcctv cameras will only 20-30% higher price than comparable analog cameras. This would put these cameras significantly less than even the budget IP megapixel options available. More important is the cost on the DVR side. Everfocus claims that a low frame rate DVR with a few HD inputs would only be slightly more than a traditional DVR.

The likely tradeoff HDcctv presents is lower cost and installation simplicity vs. reduced frame rate and camera input restrictions. At the lower end of the market, I do not think HDcctv's drawbacks will be especially painful. On the other hand, the lower cost and the plug and play setup of non-IP systems will be attractive. This will be especially desirable to traditional security/alarm installers who can use their existing staff without significant investment into IT training.

How this Impacts IP Manufacturers

The high end of IP camera manufacturers do not respect and are not interested in this market segment. This is what they often derisively refer to as the 'mom and pops' and the liquor stores of the world. Companies like Axis will probably be fine with this market segment choosing HDcctv (though it has the potential to cut into the value proposition of their managed video/STS offerings).

The budget providers of IP are the ones with the most at risk here. Companies like ACTi are focused on converting the lower end of the market to IP and to motivating security dealers to move to IP. A simple, inexpensive non-IP alternative could be a major barrier to IP growth in these segments.

3 reports cite this report:

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CSST - China Video Surveillance Offerings Examined on Aug 11, 2009
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