Hikvision Slashes Prices to End 2015

Author: John Honovich, Published on Dec 30, 2015

Evidently, Hikvision is not content with its already radically disruptive pricing.

They are slashing hard to end 2015.

Take a look:

*********, ********* ** *** ******* **** *** ******* ********* ********** pricing.

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

**** * ****:

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

**% *** ********** ** ****** **********, ********** ***** *** ********** they *** **** ***** *******, ***-***** *******. *** ********** *****, Hikvision ** ********* ************* **** **** **** *** **** ******, even ******* **** ***** **% ******.

More **** ***

** *** ********, ******* ****** **** ***** ************ *** **** running *** **** **% ********* ********, ********* ***-**, *** ***** mega ** ***********.

Sales ******

*** **** ********** ** ****** *** **** ****** *** ** vacation / *** ** *** ****** **** ****. ** *** other ****, **% ** *** ******* ** ** ***** *** many ******* ****** ***** ** *** *** ******** *********. ** course, ** * ****** ***** ****** *** ********* ********* *******, you ***** **** ** **** **** *** *********'* **** **** (e.g., *** ***, ******* *** ****, *********'* ***, *********'* ***, St. *******'* ***, ***. - **** **** *******).

What **** **** ***** *********

******* * ************ ****** * *********** ******** ** *** *** of * ******* (*** **** ** *** *** ** *** fiscal ****), ** ***** **** *** ******* ***** ** ********** their ******* ****** *** **** ******. ***, ********* ******* *************** ** **** *****, **** ******** ******** ****** ********* ***%+ ****** *** ********* NA **** ****. *******, **** **** ***** *** ******* *********'* management ** ** ********** ***** (******* ************) ****** ****.

****** *************. ** ***** **** ********* ** ****** ******* ** their ******* ****** ** *****, ******** ** ******* **% ***** it **** *****. ****** ****** ***** ** *** ***** ************ industry ****** ***** ***** ******* ***** *** ************** *******.

** ******** ** ********** * ***** ******** ********* *** ****** this ****, ***** ***** ******* *** **** *********** *** ***** overall ******** ****** ****. **********, **** ** *** ******* **** of ********* ********* *** *********** *** *** ****** **** *** relentless **** ** *** ******.

Comments (45)

15% off of trendnet at adi as well fwiw...

Here's the Trendnet ad, though Trendnet is not a major player:

If they can get dealers to stock up, as you suggest, then they absolutely hurt their competitors - which is a win to Hikvision.

Since I agree with you that market share seems to be their priority over profitability at this point.

I'm curious if anyone can convince a company NOT to buy from Hikvision at these prices.

To what end? I agree this helps them get market share but how is that sustainable? And what does it matter to get a little more share at the expense of losses?

The best I can tell Hikvision corporate has set very aggressive revenue targets for Hikvision NA, so if that is correct, I can understand the tactic as a logical outcome of that.

But I still do not understand the focus overall on top line revenue growth. It's right now a wealth transfer from the Chinese government to the US consumer (thanks?) but what is the long term plan for Hikvision the business doing this?

To the end of their competition. When you don't need to make a profit, and you use [redacted] labor as your manufacturers, you will eventually run your competition into the ground. Then you slowly raise the price, and own the entire industry. Hik has a 1000 year plan.

There are definitely major issues with China's use of 'floating populations' and the Hokou system. Certainly, by Western standards, these people have very little rights / freedom / opportunity.

Note: I've removed your specific claim though which is inflammatory and hard to justify.

Then you slowly raise the price, and own the entire industry. Hik has a 1000 year plan.

This is a price hike vision.

I believe this doesn't apply to sale items and project registrations, which is basically the most popular and competively priced items. Same difference as their regular sales and project registration discounts, nothing crazy doing here for them, just status quo.

"Same difference as their regular sales and project registration discounts, nothing crazy doing here for them, just status quo."

You mean status quo for the industry or status quo for them? Looking at ADI and other sales, Hikvision is consistently the most aggressive.

for them.

HIK's strategy is quite clever - lose money/break even for a few years in order to drive the competition out of business and gain market share in one fell swoop.

The hardest part of switching to a new brand is learning all the ins/outs and limitations of the product. Once you are comfortable with a product you will generally keep using it, unless lower price or better features compels you to switch. Once we're all using HIK comfortably, it will take a lot to switch to another unfamiliar brand with unknown features, UI, compatibility etc.

If you've got Axis and HIK, what else do you need? What possible reason would there ever be for me to try and get to know a Panasonic or Bosch camera at this point?

"HIK's strategy is quite clever"

Not sure how it's 'clever'. Surely it's the first and easiest thing you would think of or do.

Undercutting rather than taking on a fair fight is 'clever' now?

Hikvision prediction for 2016, aka Year of the Red Fire Monkey:

Hik will drop iVMS 5200 in North America after delaying its release 10 months for no apparent reason.

IMHO, Hik will attack the Pro VMS / Appliance market with the same gusto shown for cameras and low end recorders.

Hik has gilded the lily by saturating the market with its boxes, each camera they get out there now will make the VMS sale that much easier.

They have delayed so far because they did not want to slow the major VMS manufacturer's integration and support of their cameras.

But no longer... (Unless it sucks)

"Hik will drop iVMS 5200 in North America after delaying its release 10 months for no apparent reason."

There's been a reason. Hikvision NA is trying to minimize conflict with 3rd party VMSes.

"IMHO, Hik will attack the Pro VMS / Appliance market with the same gusto shown for cameras and low end recorders."

Is the 5200 really competitive with the pro VMSes like Exacq, Genetec, Milestone, etc.? I suppose they can extremely undercut on price but software features and functionality are far more of a differentiator than on cameras.

"They have delayed so far because they did not want to slow the major VMS manufacturer's integration and support of their cameras."

Source for this? And Hikvision generally works with ONVIF for 3rd parties so?

"They have delayed so far because they did not want to slow the major VMS manufacturer's integration and support of their cameras."

Source for this?

Predicative speculation.

Hikvision NA is trying to minimize conflict with 3rd party VMSes.

Source for this?

Why would they trying to minimize conflict?

"Why would they trying to minimize conflict?"

Hikvision wants to move up to the enterprise market, e.g., Hikvision Hires Pelco / G4S Exec.

In that market, there are some strong VMSes fairly entrenched. If Hikvision tries to compete against those VMSes with their own VMS, it is going to motivate them to sell against them and bring in Hikvision rivals (whether it is Dahua, Arecont, Samsung, etc.).

Also, my gut feel is that the 5200 is going to be a hard sell for most enterprise US accounts who tend to be more demanding on features.

"They have delayed so far because they did not want to slow the major VMS manufacturer's integration and support of their cameras."
Source for this?

Milestone Names Hikvision 'Elite Partner'

Agreed - VMS price slashing needs to happen next, whether by HIK or others. $100+ for a VMS license when HD IP cameras are sub $100? Insane.

"$100+ for a VMS license when HD IP cameras are sub $100? Insane."

That's an interesting point. I agree that as the price of IP cameras fall, it makes the price of VMS licenses relatively look more expensive.

On the other hand, the question remains does the VMS license pricing deliver commensurate value?

Just as important on the VMS side is how inexpensive Hikvision and Dahua are charging for their NVRs. An Exacq or Milestone NVR is the few thousands range for a 16 channel NVR while Hik/Dahua are typically under a thousand, which is a substantial amount for buyers with limited needs / desires.

As so many integrators jump on the lowest-cost Chinese equipment, does anyone envision Chinese government or others in China looking at all the cameras? Surely there is a back door in all these cameras since the government is so involved. Guessing this has probably been discussed but....curious if anyone cares since profit and low-cost are our way of life!

That being said, Axis is really making it hard for an integrator to toy with the lower end market with its lowest priced outdoor cameras being so 'average' and still over $400.

"Chinese government or others in China looking at all the cameras? Surely there is a back door in all these cameras since the government is so involved."

I share these concerns massively.

My first instinct is to agree. But the first time HIKVision/Chinese government gets caught using the backdoor, you would think it will obliterate their business.

Then again, the USA is doing mass surveillance on the entire Internet, and I've yet to see an IP camera that encrypts a video stream by default, so basically all cameras of all brands have a "back door". Maybe nobody will care if the Chinese government and the USA government are both watching us. It would just be nice if we could get more bandwidth for when the worlds governments start watching us. Or if we could stream to a central server which would re-stream to various governments Netflix-style to take the burden off that poor $69 HIKVision dome camera doing all the work spying :)

But the first time HIKVision/Chinese government gets caught using the backdoor, you would think it will obliterate their business.

If that was true, Lenovo would be out of business.

http://thehackernews.com/2015/09/lenovo-laptop-virus.html

http://www.theverge.com/2013/7/30/4570780/lenovo-reportedly-banned-by-mi6-cia-over-chinese-hacking-fears

I think that even if we calculate that -15% discount from ADI you anyway won't reach prices which we have here in Baltics :) So believe me Hikvision really has some reserves to cut the price. The same with iVMS5200.

As for "whats the point to keep such a low price" they see the point. First of all government is happy to see high educated people of Hangzhou working in Hikvisions factories. They are happy to pay higher salaries to simulate chinese internal consumption. So I would say Hikvision is more social project. Where they want to show their Hi-tech, power and social responsibility for their people. For HDD we have how many 2 global players? So I think Hikvision is going somewhere same direction to be one of 2 or 3 in globe. In any case it will be interesting to monitor these processes plus Uniview (UNV) have joined the club as well :)

"I think that even if we calculate that -15% discount from ADI you anyway won't reach prices which we have here in Baltics :)"

But the cost of selling, marketing and servicing in the Baltics is far lower than in the US. Those are real far higher costs that Hikvision needs to cover in the US.

Looks like an ADI event to me

considering the pricing structure maintained by ADI, this might not represent a significant saving on Hikvision equipment

ADI's not eating a 15% discount. This comes from Hikvision.

And ADI is most likely the biggest NA distributor of Hikvision, so for the large number of dealers who buy from ADI, it's significant.

Tried has the same 15 percent special running on all Hik...

Best to all

It's available through every Hikvision distributor. It's a Hikvision backed promotion.

Good to know and good grief :)

Why are you assuming they aren't making money (as I duck waiting for John to bring up some IPVM post I've failed to re-read.)

Also is it possible that volume flowing across the export delivery path might be their goal. Maybe they booked a dozen or two too many panamax carriers to bring product over.

"volume flowing across the export delivery path might be their goal"

It seems that way but I fail to understand the logic here. Sure, anyone can sell a lot if they sell at a much lower price than their competitors. But at such price levels, how is that good business?

As for the not making money, to clarify I am saying that in North America. Their financials report that Hikvision overall has greater profitability percentage than Google. Chinese government statistics are not always the most accurate but, presuming the numbers are true, it would have to be because of the 75% of their business inside China is very profitable.

As for NA Hikvision not being profitable, it's a function of (1) their prices are lower than essentially everyone, including companies with similar Chinese cost structure, (2) yet their NA expenditures are as a high as any big Western brand. That is not a profitable combination.

Ironically, the 15% cut should help profitability modestly in 2015 since the sales, marketing, etc. expenses are already paid for and this will pull in some extra contribution margin but it's detrimental to 2016 profitability and revenue as it is going to pull Jan/Feb/March 2016 sales to today and tomorrow (at lower prices than they would have paid in the next few months).

For a company who is struggling, I get the big end of quarter discount because you are simply trying to make it to the next year and can (try to) deal with the damage later. But, for Hikvision, the price drop looks counterproductive and damaging to their own bottom line.

Jan/Feb/March 2016 sales to today and tomorrow (at lower prices than they would have paid in the next few months).

Don't count on it. ;)

Lol, seriously, even for Hikvision, there has to be an end to the price drops.

I am curious where that is. Does Hikvision really want to be spending millions on trade show booths and tens of millions on employees to sell $50 cameras to thousands of different integrators across the US? There's only so many surveillance cameras that can be sold and there's still a very fractured integrator channel that is costly to sell and support.

Some of it might be bluffery aimed at having an immediate effect by reducing competition, even if no one goes chapter 11.

Imagine you're IDIS trying to raise some cash for next year's booth... Try convincing bankers that Hik has bottomed.

Doesn't a race need to have two racers anyway? Maybe someone needs to tell them they won already...

The reduce competition angle is the most believable to me and I think their price drops will reduce competition. Let's say Hikvision successfully pushes out half of the companies selling surveillance cameras. What does that leave? Another 50, 100, more?

Is there any reasonable time frame or scenario where Hikvision gets to only a few companies remaining, like Hikvision's Chairman predicts?

If you can get to the point where only a few remain, I can see Hikvision making a lot of profits at that point. But if you still have a few dozen companies remaining (which I think is inevitable due to the fractured channel internationally), what point is the price drops? Why incur so much losses / miss out on so much profit to get to that point?

Let's take a look at what clues He gave us in the infamous 'Massive Bloodletting' redacted article:

“In five to six years, there won’t be that many manufacturers able to sustain their cost structures,” Mr. He predicts. “My goal is to make sure Hikvision is well positioned to survive.

  • Five year consolidation - not a short-term outlook
  • He stresses costs over revenue as the reason for their demise. Implication is that He believes that competitors they won't be able to make stuff cheap enough to compete.
  • His goal is just to SURVIVE TIL THEN!

Not prosper, not flourish, just survive...

He knows just where the sustainable cost structure line is, because he lives on it!

He can lose several pints a day because he get transfusions from his personal 'donor', for anybody without one, well...

Can anyone comment on import duties and Tariffs on Chinese products into the US by Chinese Owned companies. Wouldn't US import tariffs affect their costs?

Hi

I haven't read all the posts but many seem to think Hikvision is losing money. How do we know that? When a real PC able to run windows (the Intel PC on a stick) is priced at less than $150 why can't a camera (simpler by far) cost even less? Is Intel losing on the stick? Please go to Alibaba and look at the price of several items ... Are all these companies losing money?

Interesting point and one I am currently struggling with: When a good to very good camera cost <$100. How can you justify a $300 VMS license? We have recently tried the iVMS 4200 you tested earlier. For many customers that is all they need... If the iVMS5200 is true client-server and as good as advertised/presumed, there is a revolution in the making. We will see a whole slew of VMS stalwarts fade away.

This reminds me of the entry of Japanese car manufacturers in the US market. The old Guard kept on saying that it couldn't be done and that Japanese Cos were dumping .. Years later the big 3 had to adapt or disappear, they are striving now.

I sincerely believe the days of $300 VMS licenses are over or will be very soon ..maybe less than 3 years ... We better prepare ourselves for these times.

7, you made a similar point in another thread and I responded there.

As for the Intel PC on a stick, an IP camera is basically a PC with an imager and a lens and a PoE interface, etc. so yes if Intel is charging $100 for its stick, it is not surprising that IP cameras would generally go for even more.

As for Alibaba, people selling things off Alibaba are not comparable to what Hikvision or Avigilon or Axis or ACTi, etc. is doing. With a branded manufacturer (like Hik or the others), you get pre-sales and post-sales support, warranty (often extended, often advanced replacements), eliminates risk of counterfeit product, quicker turn around time / local inventory, etc.

If a company did not need to do anything like that, they surely could sell for a lot less.

John

Fair enough. A question do you know Hikvision Cost Structure?

A few things:

  1. They have access to the manufacturers bed of the World? Every single company you can think of, has some or all of their stuff Made in China. My reference to Alibaba is that they can get these stuffs made at an incredibly low price. The same companies able to turn around and produce the Walmart Webcam sold in the US for $30 would be so pleased to have that kind of solid , stable customer.
  2. Hardware keeps on falling. For everyone mind you but for them see above.
  3. They have a large R&D Department. And they are not sitting on their laurels.
  4. I do understand that Support, Marketing and Sales are not cheap but what kind of numbers would you put on its % of their income? 10% look seriously large for me and it would be $150,000,000... more than most other manufacturer can dream of ( IIRC they had sales of 1.5 B$ or am I mistaken?)
  5. I don't see Hikvision advertising any differently from other manufacturers. I could be wrong.
  6. We seem to dismiss that they offer incredibly high value for the price and that drives sales via Words-of-mouth Internet style. It is very hard for me not to automatically look for Hik in any application/bid/project unless specified otherwise. Their offerings are seriously good to excellent.
  7. We can at the end say that it isn't fair since they are backed by the Chinese government and they have all the large contracts and they are bent on World Domination. That's an entirely different discussion...

"I don't see Hikvision advertising any differently from other manufacturers. I could be wrong."

In North America, Hikvision was the #1 video surveillance top spender on advertising and marketing in 2015 (based on my tracking of trade shows, trade mags, etc.). I know this varies by continent so you might have a different experience.

"They have access to the manufacturers bed of the World? Every single company you can think of, has some or all of their stuff Made in China."

There's lots of manufacturers in China, even the other Chinese manufacturers have privately contended that Hikvision is losing money on their NA sales.

"I do understand that Support, Marketing and Sales are not cheap but what kind of numbers would you put on its % of their income? 10% look seriously large for me and it would be $150,000,000..."

That percentage varies per region. 10% might look seriously large for you if you looked at just China. But break it out in different regions. In North America, 20%+ is probably more reasonable. Again, Hikvision HA is quite large (150, 200 people, the shows, the ads, etc., in US dollars for US employees, etc.).

I agree with you that can that many manufacturers can make a product for cheap but to distribute, warehouse, market, sell, support, etc. in expensive countries like the US, there's a lot more expense involved.

If you are discussing about prices on Aliabab or Aliexpress check this website: http://search.jd.com/Search?keyword=hikvision&enc=utf-8&wq=hikvision&pvid=otnif2ji.4jtzk8

If you are interested in EZVIZ (Hiks retail brand) you can also check here: http://search.jd.com/Search?keyword=Ezviz&enc=utf-8&wq=Ezviz&pvid=wsqif2ji.4jtzk8

EZVIZ C2 mini for USA should be 70USD including all taxes for Europe 100 Euro. But in China they offer 199RMB approx. 30 USD. So there are space even if to compare sales prices. I guess Hikvision is innovative enough (somtimes maybe even more than these mentioned brands like Avigilon, Axis or whatever) to reach good efficiency level and to have low costs.

For 2015 they have lot of new products in high resolution and many verticals so I guess we will keep discussing this "wtf Hikvision is doing" topic ;)

for 2016 they have lot of new products*

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Related Reports on Sales

Avigilon Favorability Results 2019 on Jan 15, 2019
Since IPVM's 2017 Avigilon favorability results, the company was acquired by Motorola and has shifted from being an aggressive startup to a more...
Gorilla Technology AI Provider, Raises $15 Million, Profiled on Jan 15, 2019
Gorilla Technology is a Taiwanese video analytics manufacturer that recently announced a $15 million investment from SBI Group, saying this...
Arecont Costar Layoffs on Jan 14, 2019
Arecont Vision, a Costar Company, has laid off more than 10% of their workforce in a move the company described to IPVM as a result of "important...
CyberExtruder Face Recognition Profile on Jan 04, 2019
CyberExtruder offers 3D modeling face recognition software that they say provides quicker and more accurate matches than other 2D face recognition...
Last Chance - Security Sales Course 2019 on Jan 03, 2019
This is last chance to register for the IPVM sales course: This sales course is customized for the needs and challenges specific to...
European Startup Ajax Profile - They "Stand Against Evil" on Jan 03, 2019
European intrusion detection startup Ajax Systems proclaims: How are they standing against evil? And what are the differentiators and potential...
The Battle For The VSaaS Market Begins 2019 - Alarm.com, Arcules, Eagle Eye, OpenEye, Qumulex, Verkada, More on Jan 02, 2019
2019 will be the year that VSaaS finally becomes a real factor for professional video surveillance. While Video Surveillance as a Service (VSaaS)...
Qognify Acquires OnSSI, CEO Pitches Exciting Future on Dec 23, 2018
Qognify is a VMS / PSIM company, with a tumultuous 2018, that has just acquired a VMS company (OnSSI) who itself acquired a VMS company in 2015...
Dahua USA Sales Team Cuts - 'Strategic Right Sizing' on Dec 18, 2018
Dahua USA finishes a tumultuous year in which it acquired the Flir SMB business, was subject to the US government ban, terminated and restructured...
This Brooklyn Storefont Sells Millions In Uniview And Hikvision on Dec 18, 2018
Looking at their Brooklyn headquarters for this "CCTV Manufacturer", it is not much: Inside, it is not better: However, this company is one...

Most Recent Industry Reports

Access Control Cabling Tutorial on Jan 15, 2019
Access Control is only as reliable as its cables. While this aspect lacks the sexiness of other components, it remains a vital part of every...
Gorilla Technology AI Provider, Raises $15 Million, Profiled on Jan 15, 2019
Gorilla Technology is a Taiwanese video analytics manufacturer that recently announced a $15 million investment from SBI Group, saying this...
2019 IP Networking Book Released on Jan 14, 2019
The new IP Networking Book 2019 is a 285 page in-depth guide that teaches you how IT and telecom technologies impact modern security...
Arecont Costar Layoffs on Jan 14, 2019
Arecont Vision, a Costar Company, has laid off more than 10% of their workforce in a move the company described to IPVM as a result of "important...
The False SCMP Story on Hikvision NYC AI on Jan 14, 2019
In the past week, one of Asia's largest publications, the South China Morning Post (SCMP), posted an article about "Chinese [facial recognition]...
WDR Tutorial on Jan 11, 2019
Understanding wide dynamic range (WDR) is critical to capturing high quality images in demanding conditions. However, with no real standards, any...
Pelco Favorability Results 2019 on Jan 11, 2019
Pelco had a significant favorability problem amongst integrators in our previous study (see 2016 Pelco results). Now, in the first edition of our...
Bad: Dahua Villa Video Doorbell Tested on Jan 11, 2019
Doorbells are one of the hottest segments in the residential market but Dahua's Villa Video Doorbell is the worst we have tested.   We bought and...
Last Chance - Winter 2019 IP Networking Course on Jan 10, 2019
Today is the last day to register for the Winter 2019 IP Networking course. This is the only networking course designed specifically for video...

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