Global Video Surveillance Growth Rates Declining Sharply

By John Honovich, Published Jun 06, 2014, 12:00am EDT (Info+)

Just a few months ago, recall the hype for the video surveillance market growing 80% over the next few years. Well, not so fast.

IMS / IHS's new numbers quietly but clearly show significant declines in estimates for 2013 market size, 2013 growth rate and estimates for 2014.

In this note, we break down these declines and show the 3 key factors pressuring down growth for the surveillance market.

Declining ********* / ***********

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**** **** *********, *** ** ********** 2013's ****** ****** **** *** '****** 7%', ******** ** ***** ********** ** **** growth **** **** ** **** **** 11%.

** ******, *** ******* *** ****** and ***** ******* *** ****** **** lower, ** *** ****** ****** ********* to ** ****** ** ** ***** in ********** *********, *********** *****.

***********, *** ** ***** ********** **** global ****** ** **.*% (**** $**.* to $** ******* ***), ****** **** slightly **** ***** ******** **%+ ********.

*******, ** **** ****** *** *** even *%, *** ***** ****** ****** the **** ****** **** ** ** 50%+ ****** **** ****? **'* ************, since ** ********** **** ** ******* **** *** *** ******* *** moving ******* *** ******.

3 *** ******* ********** **** ******

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********, ********** ** ****. ** **** *** *************** **** *** ******** *********************, ***** ** **** *** **** many *** ******** ** ******** ************ to ***** ****** ** ******** **** or ******* ******. ********* *** * big **** ** ******** ****** **** the **** * ******** ******** ****** ********* ***. ** all ***** ******** ****** *** ***** *********...

*******, *** **** ******** *** *******. ** *** ****** **** ***** is * *** '**********' *****, ** is ******* ************* ******* **** *** cost ** *********. ** ** ********* on *** ** **** (*.*., *********, *****) *** *** ** *** ***-**/****** HD **** (*.*.,***** *****). **** ** ********** **** **** for *********, *** ***** ***** ***** are ********* *** **** *** **********, typically **** **** **** ******* ******* growth (******* $*** ***** *** $*** ones, ***.), *** *** ** *********** for *********** ** **** ******* ******* total *******.

Comments (7)

Robert Lydic

06/06/14 12:47pm

John,

Do the IMS / IHS numbers provide greater granularity on the market conditions for the US in 2013 and projections for 2014? I want to be respectful of their research and understand that you probably cannot disclose all of their proprietary information as it is how they make money, however as a past subscriber to their info myself I am curious on how their research speaks to the US specifically.

On a separate note, I wonder if you would add a 4th key factor pressuring growth and that is the overall US economy slowing down. Many researchers have shown the overall US GDP declined nearly 1% in Q1, and while the physical security industry does not coorelate directly to GDP, the overall lack of growth / spend in the US would have a significant impact on an product segment that is commonly viewed as an expense (rather than a profit center) in most end user organizations. Thoughts?

John Honovich

IPVM | In reply to Robert Lydic | 06/06/14 01:47pm

Rob,

I agree that overall economic growth is a factor for the industry. I have seen similar reports about lower US GDP growth / decline. On the other hand, economic growth in North America and Europe has not been great for years.

The big risk is if we enter another recession. It's been 6 years since the start of the last one, so perhaps we are 'due' for one soon, but that is just speculation. However, a recession now would hit the industry much harder than in 2008, because the shift to MP / IP at that time, counterbalanced. Now, what do we have?

As for IMS's US specific new numbers, I do not have access to them. However, typically, IMS projects the US at roughly half the rate of Asia and at/or below the overall global rate.

John Honovich

IPVM | In reply to John Honovich | 06/06/14 11:05pm

Btw, speaking of lower economic growth, things are so bad in Europe now that the European Central Bank has just moved to negative interest rates.

So essentially you get to pay banks for the privilege of letting them hold your money...

Maybe that will help spur growth but it is no doubt how problematic the economy has become and how limited the options are left to improve.

Undisclosed Manufacturer #2

In reply to John Honovich | 06/10/14 02:17pm

This is a really interesting topic with negative intertest rates. In addition EU authorities are discussing the idea of "bail-in" procedures when bankrupted banks will be saved by giving them the ablity to just steal take money of their clients, about the same way how it was done in Cyprus.

In Cyprus most of clients who had more than 100 000 EUR, lost their money above this 100 000 EUR limit.

Undisclosed Manufacturer #1

06/06/14 03:21pm

Do we know how IMS/IHS got their numbers? I've heard that the analysts there tend to be recent college grads with minimal experience, and their numbers largely finger-in-the-wind guessing.

John Honovich

IPVM | In reply to Undisclosed Manufacturer #1 | 06/06/14 03:31pm

While their analysts tended to have little work and no industry experience, they get a lot of there numbers directly from big manufacturers, who likely have more incentive to pad than underreport their numbers.

Also, IMS / IHS tends to be disproportionately bullish, as most manufacturers want to hear (aka pay tens of thousands for) rising numbers / trends, not declining ones.

In absolute terms, I would be skeptical of their market size numbers (in fairness, it's hard for anyone with such a fragmented market). However, if IMS is revising their numbers downward, it's another relevant sign pointing towards weakness in the market.

Peter Knezevich

06/23/14 09:55am

I take you point that the IP conversion is almost, or materially, over and that innovation has slowed. It seems surveillance has reached statsis. However, recent acquisitions, Milestone and DropCam, seem to indicate something going on but difficult to discern what that is.

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