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

Startup Vaion Launching End-to-End AI Solution Backed with $20 Million Funding on Jun 17, 2019
An EU / USA video surveillance startup, Vaion, founded by ex-Cisco Senior Directors is launching an end-to-end VSaaS platform with $20 million in...
Sighthound Transforms Into Enterprise AI Provider Profile on Jun 14, 2019
Sighthound is now rapidly expanding its R&D team, building an enterprise AI service. This may come as a surprise given their origins 6 years...
False Verkada 'Unrivaled' Low Light Performance Claim Removed on Jun 12, 2019
Verkada falsely claimed that it delivered 'UNRIVALED LOW LIGHT PERFORMANCE' until IPVM questioned. In fact, Verkada's low light performance is...
Carnegie Mellon AI Startup Zensors Profile on Jun 11, 2019
Zensors is a startup formed by Carnegie Mellon graduates from a Carnegie Mellon research project, offering customized models per camera that they...
Directory of 30+ VSaaS / Cloud Video Surveillance Providers on Jun 07, 2019
This directory provides a list of VSaaS / cloud video surveillance providers to help you see and research what options are available. 2019 State...
Startup Rhombus Systems Says Twice the Features, Half the Price of Verkada on Jun 04, 2019
Closed cloud systems may be the fastest growing segment of video surveillance with Meraki and Verkada. Now another California company is joining...
China / US Trade War Impact Splits Industry on Jun 04, 2019
As the trade war continues to heat up, 170+ integrators told us "What impact will the US / PRC China conflict have on the industry?" Respondents...
Panasonic Sells Off / Spins Out Security Business on Jun 02, 2019
Panasonic has sold off its security systems business to a private equity firm, after suffering years of challenges. The new company, which will...
IndigoVision Control Center VMS Tested on May 30, 2019
IPVM's last test of IndigoVision's VMS was in 2010, which found enterprise VMS features and a simple client interface. but no 3rd party camera...
Verkada Favorability Results 2019 on May 29, 2019
Verkada has taken the industry by storm with the fastest growing video surveillance sales organization ever and a half billion dollar valuation....

Most Recent Industry Reports

Genetec Synergis Cloudlink - Complex, Costly and Confusing on Jun 18, 2019
Genetec's Synergis Cloud Link is complex, costly and confusing compared to competitor access control architectures. Inside this note, we examine...
Startup Vaion Launching End-to-End AI Solution Backed with $20 Million Funding on Jun 17, 2019
An EU / USA video surveillance startup, Vaion, founded by ex-Cisco Senior Directors is launching an end-to-end VSaaS platform with $20 million in...
The Scheme Hikvision and China Importers Use To Avoid Tariffs on Jun 17, 2019
Hikvision and numerous China importers are avoiding 25% tariffs by including an SD card slot in their IP cameras to claim they are 'digital still...
Sighthound Transforms Into Enterprise AI Provider Profile on Jun 14, 2019
Sighthound is now rapidly expanding its R&D team, building an enterprise AI service. This may come as a surprise given their origins 6 years...
ADT Eliminating Acquired Brands, Unifying Under 'Commercial' Brand on Jun 14, 2019
ADT is eliminating the brands of the many integrators it has acquired over the past few years, including Red Hawk, Aronson Security Group (ASG),...
NSA Director Keynoting Dahua and Hikvision Sponsored Cybersecurity Conference [Canceled] on Jun 13, 2019
The technical director for the NSA’s Cybersecurity Threat Operations Center will be keynoting a physical security cybersecurity conference that is...
Farpointe Data Conekt Mobile Access Reader Tested on Jun 13, 2019
California based Farpointe Data has been a significant OEM supplier of conventional access readers for years to companies including DMP, RS2, DSX,...
Embattled $400 Million China Funded Philippines Surveillance System Proceeds on Jun 13, 2019
An embattled 12,000 camera surveillance system project that will cost ~$400 million will proceed.  The project contract was awarded, had its...
False Verkada 'Unrivaled' Low Light Performance Claim Removed on Jun 12, 2019
Verkada falsely claimed that it delivered 'UNRIVALED LOW LIGHT PERFORMANCE' until IPVM questioned. In fact, Verkada's low light performance is...

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