Dropcam Sales Surge and Amazon's Growing Power

Author: 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

ADT And 'The Defenders' Silent About Massive Complaints on Feb 14, 2019
ADT's largest dealer, "The Defenders" has been the subject of a massive number of complaints over many years and many forums, most recently a CBS...
Sales Turnover At Anyvision on Feb 13, 2019
Anyvision raised a $43 million Series A and according to their newest investor: what you need to do is push the gas pedal and build an...
Cisco Meraki Cloud VMS/Cameras Tested on Feb 13, 2019
Cisco Meraki says their cameras "bring Meraki magic to the enterprise video security world". According to Meraki, their magic is their management...
Solink Raises $16 Million - Company Profile on Feb 12, 2019
Most industry professionals have never heard of Solink, a company whose tagline is: It's time to revolutionize the way business uses...
Barnes Buchanan 2019: Despite 'Strange Narrative' Great Time To Be In Security on Feb 11, 2019
A "strange narrative" is being spun, said Michael Barnes at the 2019 Barnes Buchanan Conference. However, despite that narrative, it is a "great...
Dahua Intercom Tested on Feb 07, 2019
Video intercoms are a growing market with video surveillance manufacturers expanding into this niche. IPVM is continuing its series of video...
Hikvision HDTVI Power Over Coax Tested on Feb 05, 2019
After years of delay, Hikvision's Power Over Coax (PoC) HDTVI models are finally shipping, aiming to make HD analog installs as simple as PoE, with...
Exacq's Cloud Drive Storage Tested on Feb 04, 2019
Less than a year after acquiring cloud video company Smartvue, Exacq has launched its 'cloud drive storage' offering. We see the VSaaS market...
Surging Wyze Raises $20 Million, Threat To Chinese Brands on Feb 01, 2019
The Seattle Startup that is disrupting consumer IP cameras with $20 pricing has just raised $20 million dollars (SEC Filing and company press...
Hanwha Techwin Favorability Results 2019 on Jan 31, 2019
Hanwha Techwin's favorability results surged, in IPVM's 2019 study, going from barely neutral in 2016 to strongly net positive, as the results...

Most Recent Industry Reports

Hanwha Smaller Multi Imager Tested (PNM-9000VQ) on Feb 14, 2019
Hanwha's first repositionable multi imager PNM-9081VQ tested well, but was huge, over 12" wide and weighing in at over 10 pounds. Now, they have...
ADT And 'The Defenders' Silent About Massive Complaints on Feb 14, 2019
ADT's largest dealer, "The Defenders" has been the subject of a massive number of complaints over many years and many forums, most recently a CBS...
Hikvision Chairman Praises United Front on Feb 14, 2019
Hikvision’s controlling shareholder held a meeting last month praising the United Front, a Communist Party organization known for its secretive...
Sales Turnover At Anyvision on Feb 13, 2019
Anyvision raised a $43 million Series A and according to their newest investor: what you need to do is push the gas pedal and build an...
Cisco Meraki Cloud VMS/Cameras Tested on Feb 13, 2019
Cisco Meraki says their cameras "bring Meraki magic to the enterprise video security world". According to Meraki, their magic is their management...
Uniview / UNV Favorability Results 2019 on Feb 12, 2019
Uniview / UNV, the self-proclaimed #3 China manufacturer, while starting late, has been working to make inroads internationally. In IPVM's 2019...
Nortek Mobile Access Reader BluePass Examined on Feb 12, 2019
Nortek's Linear access control division claims to make mobile credentials "more secure and easier to use than ever before" with their BluePass...
Solink Raises $16 Million - Company Profile on Feb 12, 2019
Most industry professionals have never heard of Solink, a company whose tagline is: It's time to revolutionize the way business uses...
Barnes Buchanan 2019: Despite 'Strange Narrative' Great Time To Be In Security on Feb 11, 2019
A "strange narrative" is being spun, said Michael Barnes at the 2019 Barnes Buchanan Conference. However, despite that narrative, it is a "great...
Milestone Drops Hikvision From Elite Partners on Feb 11, 2019
Milestone has quietly dropped Hikvision from their 'Elite Partners', less than 3 years after adding the Chinese government-owned...

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