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.]
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.