Hikvision Launches Kits, Slashing Prices 40%

I see the HIKVision strategy as something that will eventually run out of steam (or run through that "free" government money), but they won't do so before running a handful of other manufacturers into the ground and changing this industry for many, many years (and not for the better either). 

The long term impacts of moves like this encourages the commoditization of the entire video industry, making companies fearful of investing too heavily in R&D and driving the industry forward. Instead they will focus on process improvements, and cutting any extra they can to hit that bottom line and simply survive. That fear won't go away the day that these deals stop, and I wouldn't be surprised if it is years before companies truly start to trust the market place to sustain heavy R&D budgets again. 

I am sure for some installers this won't be a problem as long as they can get a few extra NVR kits here and there and cushion their bottom line, but for the integration companies that bring their key value when there are high technology devices that they can utilize in designs, this will definitely hurt long term in the ability for us to bring additional value to our clients

In my opinion, I don't think this is likely to run out of steam. With government funding HikVision will likely be able to run this campaign as long as they want. When it tapers off, it will probably be because they will have reached/exceeded whatever market share in whatever market segment(s) they've set their sights on.

It's possible the current political climate in the US may result in higher import taxes from China which would drive their prices up making them a bit less competitive. But if they're willing to sell at a loss "indefinitely", that may not be enough to push customers to other brands.

Just looked at the specs of the 7100 DVR. It mentioned something about recording in 1080 lite mode. Whats HIK's definetion of lite mode? 

Gentlemen and Integrators, All's fair in love and war. Controlled revenue loss is better than uncontrolled revenue losses. You can rest assured a deep strategy developed within the Hikvision construct is at play here, make no attempt to analyze spilt milk as it will soon go sour. Hikvision is not going away anytime soon and neither is Axis. I personally want to head to ADI right now just to get the 4 cameras and free NVR so I can just have more toys.

I'm guessing HV is selling a camera for 15$ and the dvr + had for 80-90$.

This leaves a nice margin for ADI.

My take is that they are still making money on this but less and so they will make this price permanent.

While HV is very strong here they are not considered cheap in the tvi business.

Maybe they feel this pressure in other places too.

So the turrets are TVI and the domes are IP?  Hard to tell from the picture?

Hikvision's financials show gross margins of ~40%, that means they are selling profitably overall...

This is to be expected by Hikvision, aka the greater Chinese industrial Complex and should be a surprise to no-one. The Chinese are not looking for the short term play here, they are systematically injuring our economy one cut at a time. They have already penetrated most if not all of our economic sectors via Cyber exploitation and are now executing a "hostile" take over of our physical security industry. Their tactics are to supplant U.S and Euro manufactured product in every facet of technology in order to manage the world as they will see fit.

Hikvision will continue to lower prices so that there is no competition at the low end, and what would be the only viable price based alternative? Another Chinese offering. This will only stop when 1) Severe import tariffs are instituted and 2) The greater, common good of our society is exercised when we collectively stop buying these products over better quality, higher priced, but Cyber secure cameras lines.

It is up to us, the consumer and the professional to stop this race to the bottom, only we can change these acts of economic aggression. We must educate our customer base constantly and persistently about the risk of doing business with these Chinese manufacturers...

"Their [the Chinese] line of work is hard-core cyberespionage, and their targets are the technology, designs, and trade secrets of private companies, many of which have no direct connections to traditional notions of national security. Who’s winning the battle? They are. And that has profound implications for your children and grandchildren and the world they will inherit, and for the place of the United States in the world”

--Joel Brenner, Former Inspector General NSA, Former Head of Counterintelligence Director National Intelligence.

Update: The February 'sale' is done but prices have not gone up. 

Actually, Hikvision is now selling the 4 camera HD analog kit for even less, down another $10, under $200: