Forecast: 200% Growth IP Video Surveillance 2010-2012

Author: John Honovich, Published on Nov 19, 2009

Over the next 3 years, attacks against analog CCTV will accelerate on all sides. We forecast IP video surveillance product sales will increase by 200% total between 2010 and 2012, significantly disrupting and overtaking analog CCTV sales.

We are now bullish on the growth of IP video driven by recent widespread advances in product offering and pricing.

[Update Dec 2010: Forecast is on pace. Read our 2010 / 2011 IP Sales Surge review.]

Why Now?

Last year, we projected a significant slowdown in IP video spending as the global economic markets imploded. This slowdown certainly occurred, documented in the deteriorated financial performance of most leading video surveillance companies.

However, in the last year, important advances in new products offered by both up-start and incumbent manufacturers have significantly enhanced the competitiveness of IP video.

What's Driving This Growth

We see 5 main drives behind this projected rapid growth:

  • Mainstream 720p/1.3MP cameras cut into the cost advantage of analog cameras
  • Mainstream hybrid DVRs remove the barriers of legacy deployments to migrate to IP
  • Emerging managed/hosted video undermines analog's advantages in small deployments
  • Emerging panoramic cameras further cut the cost advantage of analog cameras
  • Maturing IP camera standards will cut costs and reduce complexity

In 2009, significant advances have occurred in all of these areas.

Where Does this Projection Come from?

This is our theory based on non-public information we have gathered from over 100 sources on sales, product roadmaps and trends. It assumes weak economic growth over the 3 year period, limited overall growth in video surveillance and no major terrorist actions. A V-shaped recovery and/or terrorist events could enable the market to exceed this projection. A double dip secondary recession or growth of HDcctv could cause the market to underperform this projection.

What Does this Projection Mean?

We believe IP video growth will significantly outperform current industry expectations of 25 - 35% annual growth. While forecasting the future in a period of economic turmoil is more art than science, we are confident that IP video will gain the upper hand in general commercial deployments during this period.

Inside this report, we examine in-depth the factors driving this growth and the impact this is likely to have on industry participants.

**** *** **** * *****, ******* ******* ****** **** **** accelerate ** *** *****. ** ******** ** ***** ************ ******* sales **** ******** ** ***% ***** ******* **** *** ****, significantly ********** *** ********** ****** **** *****.

** *** *** ******* ** *** ****** ** ** ***** driven ** ****** ********** ******** ** ******* ******** *** *******.

[****** *** ****: ******** ** ** ****. **** ******* / **** ** ***** ***** ******.]

Why ***?

**** ****, ** ********* ************ ******** ** ** ***** ********** *** ****** ******** ******* ********. **** ******** ********* ********, documented ** *************** ********* *********** ** **** ******* ***** ************ *********.

*******, ** *** **** ****, ********* ******** ** *** ******** offered ** **** **-***** *** ********* ************* **** ************* ******** the *************** ** ** *****.

What's ******* **** ******

** *** * **** ****** ****** **** ********* ***** ******:

  • ********** ****/*.*** ******* *** **** *** **** ********* ** ****** cameras
  • ********** ****** **** ****** *** ******** ** ****** *********** ** migrate ** **
  • ******** *******/****** ***** ********** ******'* ********** ** ***** ***********
  • ******** ********* ******* ******* *** *** **** ********* ** ****** cameras
  • ******** ** ****** ********* **** *** ***** *** ****** **********

** ****, *********** ******** **** ******** ** *** ** ***** areas.

Where **** **** ********** **** ****?

**** ** *** ****** ***** ** ***-****** *********** ** **** gathered **** **** *** ******* ** *****, ******* ******** *** trends. ** ******* **** ******** ****** **** *** * **** period, ******* ******* ****** ** ***** ************ *** ** ***** terrorist *******. * *-****** ******** ***/** ********* ****** ***** ****** the ****** ** ****** **** **********. * ****** *** ********* recession ** ****** ** ****** ***** ***** *** ****** ** underperform **** **********.

What **** **** ********** ****?

** ******* ** ***** ****** **** ************* ********** ******* ******** expectations ** ** - **% ****** ******. ***** *********** *** future ** * ****** ** ******** ******* ** **** *** than *******, ** *** ********* **** ** ***** **** **** the ***** **** ** ******* ********** *********** ****** **** ******.

****** **** ******, ** ******* **-***** *** ******* ******* **** growth *** *** ****** **** ** ****** ** **** ** industry ************.

[***************]

Examining *** ******* ** *** ********

********* *** ** ********* *** **********, ***** ****-******* *** ********** and *** ********** ** ****** ******. ** **** ** ** clear ***** *** ******* ** *** ********.

*** *** ******** *** ****

  • ** ***** ****** **** ********** ****** **** *** ******* ********* 
  • ** ***** **** ****** ******** ** *** ***-****** *** ***** level ******, * *********** ****** **** ***** ********

** *** ***** ****, ******* ****** **** *** ********* ***********:

  • ** ** *** ******* *** ****** ******* *** ********** ** fixed *** ******** **** ****** *** '******** *********'. *******, *** emergency ******** *********** *** ***** ****** *** ***** ** ******** in *** **** *** ******. ** ** ********* ** ********* at **** ***** (*** ****). ***** *** ****** ******* ********** will ****** *** ********, ** ******* ** ***** ******** *** maturing ** *** ***** **** *** ***** **** ******** *** accelerate **** ** *** ******* ******* ***** (****** ********* ** a ***** **** **** * ******* *******).
  • ** ** *** ***** *** **** ****** *** ** ** even **** * ********** ****** ****** **** (******** ** **** reports - ******* ****** ** "**.*% ****, ***.". ***** ******* assign * ***** ** ******** **** ** ****** ********** ** reasonably **** ***** *** ******** ******* *** ******* ******** ********** (economic ****** *****, ******* ** *****/*********, ****** ** *** ******* releases, ***.).
  • ** ****** ***% ************ ******* ** ** ** * '*****' number ** ******* *** ***** ********* *********. ***% ***** ** ****** ********** slower **** *** **** * *****. ***% ***** ** ******* growth ******* ** ** ***** ** **% ** ***** ****** sales. ***% ********** * ****** ***** **** ******** ****** ****** due ** ******** ******.
  • ** **** ******* * ***** ***, ******* ** * ***** commonly *******. ** ** ******* *****, ** ** ****** *** possible ** **** ********** ***** ** *** ******** ** ********** 5 ***** **** *****. ***** **** ********** *********** **** ** the *** ****** ** ********** ******, ** ******* **** ***** such * **** ******.

The ******* ***** ************ ******

**** ******** ******* ** *** ******** ****** ** ** ***** surveillance *******, ****** **** *** ****** ** *** ******* ***** surveillance ****** (**** ** ****** ******* *** ***-****** ****).

***** **** *** ******* ***** ************ ****** ** ****** ******, its ****** **** ** ****** ********* ** ******** ******* ** the ****** **** *** ********* ** ******* ** *** *******'* current *****. ************:

  • *** ****** *******: ** ************ ** *** **** ****, ******* demand *** ***** ************ ** ************* ********* ** ******* ******** growth.
  • *****: ***** ************ ******** **** ****** ***** *****.
  • *********: ******* *** ******* ******, *** ********** ** ********* ****** for ******* ****** ** *** ***** ************ ******'* ** ************ in *** ** ** ****-**** *** ******* ** ***** ***** 2008.

******* ******** **** ********* ****** ***** ************ ****** ******* *% and **% **** *** **** * *****. *** ****** ** this ***** ** ********* ********* ** *** * ******* *****.

** ****** *** ****** ** ******* ***** ************ ****** **** new ** ********. **** ********* **** ****** ** ********* ******** analog ***** ************ ******** ** * **** ***** ******* ** previous *******. *** *** ******* ****** ** **** *************, ** video ***** **** ** ************* ***** *** ******* ** ******** existing ********* ** ***** ******* **** ** *********** *******.

Demand *** ** **** *** **** ** *******

** ******** *****, ****** ********* **** ********* *** ******* ** buy **** ** * ***** ******* ** *** **** ***** level. ** **** *****, ** ** *** ******* ****** **** increase ************* *** **** ** **** ** *** *********** ****** to *****.

******* ** ** ******** *******, **** *** **** **** **** games. *******, ** **** ** ** ***** ***** *** ** believe ********* **** *** **** ** ***** ******** - ******* supply ** *********.

Improvements ** ****** *** ** ******

*** **** ** ****** *********** ** ** ***** ******** **** drive *** **** ** ******* ****** ** *** ******. 

** ****** ***********, ** ****:

  • **** ************* ******** ** ***** ******** ** ******* ****** (*.*., analog **** **********)
  • ******** ** *** ************* ******** ******* ** ***** ******** ** lower ****** (*.*., ****** *********)
  • *** ******** ******** **** ********** ******** ***** ** ***** ****** (e.g., ********* *******)

***** ******* ****** ******* *********** ** ** *****.

Importance ** ********* ************ *******

******* ** ** ***** ** ********* ************* *** *** **** dramatically ****** *** ******* ****** ** ** *****.

********** **** *********** ****** ***** ** *** ******** ******** ******. To *** ****** **** ********** ** *** ***** *** ******* IP *****, ** *****'* ****** ** ***********. ***** ****** *** 'lose' **** **** ** ********, **** ****** **** ** *** 'locked **' ** ******** ********** ** **** ** ** *****.

**** *** ***** **** ** ******, *** ** ***** *** entrants *** *** ***** ** ******* **** * ****** ** IP *****. **** ** *** ** ***** ******* ******** $** - $** ******* *** ** ******* - *** ***** *** an ************* $** ******* *** ****** ** ********* *** ******** by ********** - **** ** **** ******* **** ****.  *** one ******** ******* ** ****, *** ** ************* $*** ******* USD ****** ******* ** ** ****** **** *** ***** ** video ************. *******,****'* ******* *********** **** ** ****** **** *** ************** ** ******.

** *** ******** ****, ********* **** ************* **** ******* ******** their ** ***** ******* ***** ** *** **** ** ******. Equally ***********, *** **** ******* ****** *** ******* ** **. In *** ****** ** ******** ****** *********,****** ***** ****** **** *******'* ******** **** **% (** ****) lower **** ** ****** ***. ********** *** ************ *** **** *** ** ******** ***** existing ********* **** ** *** *** ******** ** ** ***** IP - **** ** ****** **** *** ********* *******.

Existing ******** ***** ****** ** ********* * *****

*** **** ********* *** *** ******* *************, ** ******* *** best ***** ** ******* ****** ****** ** ** ******* *** changes ** ******* ********* *** *** ******* ** ***** *** products ** **** ******** ******. ** ***** ****, ** ***** on *** ********* * *****.

******** **** **** ***** *********** ****** **** *** **** * years *** ******* ********* *** ************* *****. **** ** ******* technologies ******* **** ***  '************' *** *********. ** ***** ******** years ** ****** *****, *** ********* *** ******** ********, ********* with *** ***** *******, ***** ************ ********, ******* *** ******, etc.

*** ********* ************ **** ********* ****** ******* **** *** **** - **** ** **** ******** ********* - *** ***** *** grow ******* *** **** **********. *******, ** * ***** ****** of ****, ** ***** ********** *** ******** *** ***** ** revenues ********* ** ****** ************* *** ******* ******. *** ********** company *** ******** **** ** ******** ** ******* *** ** would ** **** **** *% ** *** ******* ******.

Why "**********" ** *** ****** *** ** ******

** ****, **** * ********** ***********, *** * ******* ** examine ***** *** **** ************ ******* *** ********** *** ******* **** validated **** *** **** *** *****. *******, **'* **** ***** development *** ************ **** ********* ***** ************ ** **** * strong ****-***** ******.

Driver *: ********** ****/*.*** *******

***** ********* ** '***' ** ****, ** ******* **** *** sweet **** *** *****-***** ******* ******** **** ** ** ******* providing **** * *** ********** (****) ** *.* ** *******. 

*** ********* ** **** ***** ******* ******* *** **** ****-********* increase ** ******* *********/***** *** ******* ************. ************:

  • ***** ******* ****** *** ********** ********** ******** ** *********** ******** Definition ******* (**** * ***). ** **** ************, ** ** the ********** ********** **** ** **** ********* (****** *** ******* wide *** *** ****). ******** *** **** ******* ** * camera **** **** ** ********* ****** ** ******** *** ****** of ******* ****** ** ** ****.
  • *** ***** ************ ******* ****** **** ******* *** ********** **** factor ****/*.* ** ******* ** ** ** ****. ***** **** the ********* ****** *** ***** ***** *** ****, ********** *** cost ** * *** ******* *** *** **** ** * second ****** ************, *** ***** *** **** ** *********** ** lower.
  • *** ********** ***** ********, ********* ********, *** ***** *** *** performance *** *** **** ********** *** **** ** ******** **** their ****** ********** ************ (*.*., * **, ***, * **).
  • ******* ************ ** **** *****. ****** *** ************* (**** *** IP, ****** *********, *** *** ******) ***** ***** ********.
***** ******** *** ***** *** *** *** ****** ** ****** currently. **** ****** **** ********** *** ******** *** *** ****** 2010 ** **** ******. 
** ***, ********* **** ** ********* ** ******** ***** ********, suppliers **** ****** *********** ***** **** *** *** *********** **** be ***** *** ********.

Driver *: ********** ****** ****

** *** ***-******, ***** ** ********* ****** ** ******** *** government ************* **** ** - *** ******* *** ****, **% or **** **** ****, ****** *** ** ***** ** *** support ** *******. ******* ********* ***** ** ****** ** *** new ********* *** ****** ****** *********, **** ** * *********** logistical *** *********** *****.

**** *** ******* ************* **** *** **** * *****. * number ** ********* (**** ** ***** *** ********* ******) *** providing ******** ******** ** **** ******** **** *** *** ** cameras. **** *********, ********* ************* *** ****** ****** *** ******* to ***** ******* ******. ***** *** ********** **** ** **** the **** ***** ** **** ******** **** **** ***** ***-****** alternatives.

** *** *** ** ****, ****** *** ********* **** ****** commonplace *** ********* ****** ************* *** ** *** ******** ** see **** ******* ** ***** ******** ***** ****** **** (**** as *******).

***** ********* ***** *** ******* ********** ******** **** ******* *** many *****, ****** **** *** ************* **** ********* *** ******* to *** ** *** *** ******** ** *********** ** *** industry **** *** ******* * *** ** *******.

** *** ********* ****** ************* ********** *** *** ** ****** DVRs *********** *** ***** **** *** **** ** ****/*.* ** cameras. ******, *** *********** ** ****** **** *** ********* ******* will ** *** ** *** **** ******** *** ********* *** to ******* ********** *** **** ******** ** **.

* *********** ********** ** *** ********* ** ****** **** ** in *** *** *** / ****** ******* ** *** ******. In **** ******, ** ******* **** ***** $*,*** *** *** typical. ** ** *** *** ****** **** ***** ****** ********* and ******* ** **** *******. ** *** ********, **** ************* cite **** ** ******** ** **. *** ***** *** ** the ****** **** ****** ****** ********* ** ****** ****. ** believe *******/****** ***** **** ** *** *** ** ********** *** this ******* *** **** **** ****** **** ** ***** **** the ********* ****** ** ****** ****.

Driver *: ******** *******/****** *****

*******/****** ***** ** ********* *** *** **** **** ** *** video ************ ******. ****** ** ********* **** ****** *** ***** have ******** ******* ********* ** *** **** * ***** **** new ******** ********** **** *****.

*** ******** ******* **** ***** ******** ** ******** ********** ** setup *** **** ** ********* ***** ****** ***** ****** ******. This ** ***** **** ******* *** *** ** * *** options: *** **** ******** ********** (********), *** ******* (**** ***) *****-***** *******(**** ******** ***** ********). *** **** ** ** ******* ** cameras **** *********** **-**** ******* ** ****** ******* ***** *** overcome ******** ********* ***********.

***** *********** ******** *** **** **** **** *** **** * years (**** ******* ********* *** *** ***** ****), *** ** these ******** *** ***** **** ******* (******** ** *** ******* market) *** ***** ***** **** ** ** **** ** ******* the ************** ** ***** ********** ** ***** ******** ***, *** many *********, *** **** ** ************.

*** ************ *** ****** *** *** ********* **** ******* ********** over *** **** *** *****. ********* * ***** ***** ** $10 *** ****** *** ***** ** ********* *** ** **** point, *** ********** ** ******* ****** ******* **** ** **** [Note: **** ***** ***** ** *** *** ******* **** - the **** ** ******* ** ********.] ***** **** ****** **** a *** ** ******** ************* *** ******* ************, ******* *** is **** ****** ** ****-****.

Driver *: ******** ********* *******

********* ******* **** **** ****** *** ****** ** ***** *** for **** ** **** **** **** **** ************. *******, **** the **** ** ** ******* *** *** ********** ** ********* imaging **********, ********* ******* *** ***** ** *** *** **********. 

*** ****** ** ************* ***** ********* ******* *** ***** ******* -- ******* * - ** ******* ******** **** ******* *** Arecont ****** ***** *** **** ******* *******. *******, ******* **** from ************* *** *********** *** ********** ** *** ***** ***** of ***** *******. *** ************, ** ****, ****** *** ****** of ************* ** ********* ******* ** ******.

********* ******* *** ***** ***** **** ************* ****** * ** 4 *******. ***** *** ******* **** ** **** $*,*** *** to $*,*** *** (*** **** *******), *** *********** ** ******** cameras, ************ *** *** ******** ******* * ***** **** *********.

***** ******* ****, *** ** ***** ******* *** ***** ******* and **** ***** ** ***** ******* ******* ****** *******. *** instance, *** ****** ********* ******* **** ******* ** ********** **** require *********** ******* ******** **** ** ********* ** **** * limited ****** ** *** *******. ******, *** **** ****** ********* camera *** ** *** *** ** ******** ******* ** * single ********* (*** ******* *** ******* ******* ********).

** ****** ***** ** ********* ******* ** **** ******* **** *** **** 3 ***** **** *** ******* ****** ** ******* ***** ** occur ******* *** *** ** **** ***** **** ****** ** supply ******* *** **************** ********.

Driver *: ******** ** ****** *********

** *** *** ** ****, ** *** ****** ***** **** IP ****** ********* **** ****** * ********** *******. ** ********, when *** ******** ****** **** ****** ** ****, **** *** unclear, ********** ***** ******** ******* ** **************** *** ** *** over *** ****** ** *** ****** *** *** **** ** fruition. *******, **** * ****** ** ******** ******* ******** ********** support *** * ***** ***** ************* ********* ** ********** ******* by ** ****, ** ****** **************** **** ****** * *******.

** *** **** ****, *** ****** ****** ****** **** *** be *********** ***********. ** ****, *** ***** **** ** **** on ******* **************** ******* ********** ******** *** ******* *** *******. 

*******, ** **** *** ********* ** ****, ***** **************** ************** will **** ** ****** ** ****** ** ****** ** *** IP ******* *** *********** **** *********.

What ***** *** **** ** ********?

******** ** ***** ***** ** * ******* *** ********** ** the ****** ** ** *****. ***** ******** ** ********* ******, we **** *** **** ** ********** ** ******** ** * response ** ********** ******* ********* ****** **** ** * ******* to ** *****. 

** *** ****** **** *********** **** ** ***** ******** ** being ******** ** ***** ******** ******* (*** **** ** ** mid-sized ***********), **** **** ****** ** ********. ** **** *****, the ********* ****** ** ********* ******* *** ****** **** ****** provide **** ********* ** ****** ** ********.

********, * ****** ** ***** ******* ***** ** ***** ******:

  • ****** **** ********** *** **** ** ***** *** ** ******* and ******** ******** ** *******, ******** *** ********** ** ****** the **** ******* ** *********** ****** *** *****.
  • *******/****** ***** ******* ******* ** '***** ****' *********** *** **** for *********** ** ******* ******* **-**** ** *****.
  • ** ****** ********* ****** *** ********** ** ********** *** *********** with ******* **** ******* *************.
** *** **** * *****, *** ****** ** ******** ****** will ****** (******** ** ********** ************) *** *** ********** ** conduct ******** **** ******** (** ******** ****** **** ****** *** the **** ****** ******).

The **** ** ***** *********

** *** **** * *****, ** ** ******** **** ***** analytics **** **** * ***** ****** ** *** ****** ** IP ***** ** *** ******* ***** ************ ******.

*** **** ****** ** *** *** **** ** ******* ******* offerings *** ******* ****** ************* ************. ******* ** ****, ***** analytics *** *** ** *** ***** ** '*********' ** ***** mainstream.

***** **** ****,****** ************** ****** ***** ********* ****** **** *** **** ** ************ side. ******* ** ****, ****** ************, ** ** ******** **** sales **** ************* *******. *********** **** *** **** ** ***** analytics ***** ** ***** ** ***** ****, **** ******** *** limited ****** ******.

** *** **** ****, ** ** ********** ********** ** ******* that ***** ********* **** ****** ** *** **** * *****. If ** **** *** ******* *** ***** ***** *** *********** and ********** ** ******* ** ***** ********* ******* *** ** 2009, ***** ********* ***** ** ****** *** ********* ******. *******, when **** ******* **** ****** ** **** ** *********.

Impact ** ****** *** ** ***** *********

** ****** **** *********** ****** **** ********* **** ******** **** of *** ****** ** ** ***** ************ ***** **** **** - ****. **** ** ****** ** ***** ******* * ******* of ******* ****** **** *********** ***** *** ** ***** ******** or **** ************ ** ** ***** ***********.

********** **** ******* **** ***** ******** ***** ********, ***** ********** to **-***** ******* ****** *** ******* ******** ***** ** ** video ** ****** **** *****. ***** **** **** ********* **** the ********** ***** **** ** ****, **** *** *** ******** (with ********** ****, ********* *** ***** ***** ***** *** *** sales ******* ** ** *****, **** ** **** ***** *****). Product ******** *** ******* ********* *********** **** ********** ********** *** importance ** ** ***** ** ********* ******. 

** *** ***** ****, **** *** *********** ******, **** ********** will ******* ****** *** **** ******. *******, **** *** ****** to ** *** ********* ****** **** *** ****.

*** ****** ****** ** *** **** **** ** *** **** of *******/****** ***** ***** '*****' *** ******** ***** *** **** analog *** ** ***** *************. ***** **** ** *** ****** depend ** ******* ******** ******* ***********, *******/****** ***** **** ********** be ********* ** ******* ***** **** ******** ** *** ***** or ******* ***-**** **********. **** **** ** ********* ********* *** any ********* ** ***** ** ** ** **** ***** **** to ****** ***** ******** *****. *******, *** **** ****** ** this **** ** ***** **** **** ** *******/****** ***** **** require **** ** ****** *** ******.

The ***** ************ ******** ** ****

** *** *** ** *** **** * *****, ** *** the ******** ****** *** ********* ***************:

  • ***** *** ******** ** ******* ******** **** ********* ***** ** analog (******* ** *** ******* ****** ****), *** ******** ** systems **** ** ******* ** ********* *** ******** ** ******* (either ******* ****** ****, ******** **** ** ******/******* *****). **** will **** *********** ********* ** **/********* ******* ******.
  • *** *** ** *****-********* *** ********* ******* **** ** ***********, changing *** *** ******* *** ******** *** ******** *** ***** number ** ******* ****** *** ****.
  • *******/****** ***** **** ** **** **** ***** * *** '***' trend ** * *********** ***** ** ****** ********. ***** ******* use **** ****** ****** *** (**** **** *% ** *** market), *******/****** ***** **** ****** ** ****** ** **** ** megapixel ******* *** ****** ***** - * ********** ****** ** be ****** *******.
  • ***** ********* **** ****** ***** * ***** ***** ** ** mature, ******** *** ****** ****** ******* *** ********** ***, **** if *** ****** ** ******* *** *** ***** ** ***** over *** **** * *****.
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