Dropcam Sales Surge and Amazon's Growing Power

By: John Honovich, Published on Jan 01, 2013

VSaaS's weak ROI has caused considerable debate over the future of cloud based video surveillance. Now, one upstart, who recently received over $18 million in funding and released an HD version, is claiming surging 2012 sales. Is this finally a sign of VSaaS coming of age or does it better demonstrate other important growing forces in the industry?

Dropcam Sales Review

Dropcam claims the following:

  • 2011 revenue of 'well over $1 million' USD
  • 2012 revenue up 400% over 2011, i.e., ~$5 million
  • 60% buy hardware only but no ongoing services / recording

With a sales price of $150 per camera, this implies tens of thousands of cameras sold in 2012. Dropcam sells primarily through Amazon, with an option to buy direct from their website as well as some random small Internet retailers.

Second Generation Product

A major sales driver was certainly the introduction of their own HD camera line, replacing their first generation Axis OEM cube camera. This line improved key dimensions - higher resolution, better night time performance, and lower pricing. Plus, since it is their own cameras, the gross margins on hardware sales are far higher. This new line has produced far more and far higher consumer reviews on Amazon than their first gen.

However, as the company acknowledges, the clear majority do not buy a subscription plan (and that does not factor churn - how many will cancel or discontinue monitoring in the future). On the other hand, as many surveillance manufacturers have shown, it is quite possibly to build a high profit business on camera sales with a smaller recurring revenue stream as a bonus.

Amazon's Growing Power

Given that most buy hardware only, Dropcam's growth best demonstrates the power of Amazon as a sales channel. Without having to beg ADT or traditional distributors, Dropcam is well under way to building a respectable tens of millions of dollars business. This is despite being a software company with no established brand, virtually no sales force nor traditional marketing. 

However, looking at what is selling on Amazon, it is pretty clear that Dropcam is the most attractive purposely built consumer monitoring offering there. That's an attractive position because Amazon has massive sales volume. Overall electronic equipment sales are over $30 billion USD per year, the company's revenue growth is ~40% per year and monthly site traffic is estimated at 80 million in the US alone. Certainly, only a fraction of Amazon sales are within surveillance but even still that is easily a few hundred million dollars. Being the top rated, most purpose built product will give a product a disproportionate part of that sizeable sales flow.

What exactly happens with Dropcam depends on how they excute and what tactical decisions they make. Regardless, their progress to date shows a new path for surveillance manufacturer success, at least for the consumer market, divorced from the legacy dominance of traditional distribution.

Comments : PRO Members only. Login. or Join.

Related Reports

Acquisitions - Winners and Losers on Dec 10, 2019
Most major manufacturers have been acquired over the last decade. But which have been good deals or not? In this report, we analyze the...
Viisights Raises $10 Million, Behavior Analytics Company Profile on Dec 09, 2019
Viisights, an Israeli AI analytics startup marketing "Behavioral Understanding Systems", announced $10 million Series A funding. We spoke to...
Security Sales Course 2020 - Last Chance Save $50 on Dec 05, 2019
This sales course is customized for the current needs and challenges specific to professionals selling video surveillance and access control...
Freebie Face-Off: Rise of ~$30 Giveaways Examined on Dec 02, 2019
The freebies are growing. Verkada started this (see The Fastest Growing Video Surveillance Sales Organization Ever - Verkada) and now has given...
China Uyghur Analytic Projects Require Intel And NVIDIA, Intel Condemns, NVIDIA Silent on Dec 02, 2019
At least 8 PRC China police projects require NVIDIA and Intel chips to power their Uyghur-detecting analytics, according to procurement documents...
Directory of Access Reader Manufacturers on Nov 27, 2019
Credential Readers are one of the most visible and noticeable parts of access systems, but installers often stick with only the brand they always...
Vunetrix Health Monitoring Company Profile on Nov 26, 2019
Vunetrix boasts that they make the integrators the 'HERO' by using Vunetrix's monitoring. We spoke to Vunetrix to better understand their...
Wyze AI Analytics Tested - Beats Axis and Hikvision, Now Improved, Now Being Terminated on Nov 25, 2019
When we originally tested Wyze's free person detection deep learning analytics in July 2019, they performed well, with few false alarms, but a long...
Arcules CEO Threatens Over "Security Breach" on Nov 25, 2019
An Arcules employee called out a recent 'security breach', however, Arcules CEO disputed this as 'inaccurate' and threatened to sue IPVM. Inside...
Top Manufacturers Gaining and Losing 2019 on Nov 18, 2019
2019 has been an explosive year for video surveillance, with the world's two largest manufacturers, Dahua and Hikvision, being sanctioned for human...

Most Recent Industry Reports

Honeywell 30 Series Cameras Tested Vs Dahua and Hikvision on Dec 11, 2019
Honeywell has infamously OEMed Dahua and Hikvision for years, but now they have introduced an NDAA-compliant line, the 30 Series, claiming "lower...
"Good Market, Bad Business Models" - Residential Security on Dec 11, 2019
Industry banker John Mack, at his company's annual event, took aim squarely at the problems in the residential security...
IP Camera Browser Support: Who's Broken / Who Works on Dec 10, 2019
For many years, IP cameras depended on ActiveX control, whose security flaws have been known for more than a decade. The good news is that this is...
Acquisitions - Winners and Losers on Dec 10, 2019
Most major manufacturers have been acquired over the last decade. But which have been good deals or not? In this report, we analyze the...
IP Camera Installability Shootout 2019 - Avigilon, Axis, Bosch, Dahua, Hanwha, Hikvision, Uniview, Vivotek on Dec 09, 2019
What are the best and worst cameras to install? Which manufacturers make it the hardest or easiest to install their cameras? We tested 35 total...
Viisights Raises $10 Million, Behavior Analytics Company Profile on Dec 09, 2019
Viisights, an Israeli AI analytics startup marketing "Behavioral Understanding Systems", announced $10 million Series A funding. We spoke to...
Disruptor Wyze Releases Undisruptive Smartlock on Dec 06, 2019
While Wyze has disrupted the consumer IP camera market with ~$20 cameras, its entrance into smart locks is entirely undisruptive. We have...
Bosch Budget 3000i Cameras Tested on Dec 05, 2019
Bosch has long had a hole in its lineup for, as it describes, "competitively-priced cameras". Now, Bosch has released its 3000i series cameras...
Anixter Resisting Takeover From Competitor on Dec 05, 2019
Mega distributor Anixter is going to be acquired but by whom? Initially, Anixter planned to go private, being bought by a private equity firm....
Security Sales Course 2020 - Last Chance Save $50 on Dec 05, 2019
This sales course is customized for the current needs and challenges specific to professionals selling video surveillance and access control...