Video Surveillance / IP Video Statistics 2010 Examined

By John Honovich, Published Oct 26, 2010, 08:00pm EDT

In this note, we examine the (1) global video surveillance market size and growth forecast, (2) breakdowns for Americas, Asia and EMEA, (3) IP video penetration by market segment and (4) growth forecasts for market segment. We offer commentary on the issues and drivers behind them. These statistics are based on a presentation from Axis's Q3 2010 financial presentation (pages 12 - 16) cited from IMS Research.

Overall Video Surveillance Market

As the following table shows, the estimated market size based on manufacturer total revenue (not end user) is:

  • 2009 Global video surveillance market: $8.26 Billion
  • 2009 Asia video surveillance market: $3.28 Billion
  • 2009 Americas video surveillance market: $2.87 Billion
  • 2009 EMEA video surveillance market: $2.05 Billion

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The projected 2014 market size and implicit CAGR is:

  • Global: $14.47 Billion with CAGR of 11.87%
  • Americas: $4.48 Billion with CAGR of 8.9%
  • Asia: $6.6 Billion with CAGR of 15.1%
  • EMEA: $3.3 Billion with CAGR of 10%

The fastest growth projection for Asia is not surprising given the region's overall higher projected GDP growth plus the relative lack of surveillance systems in place. By contrast, Europe and the US already have deep penetration of surveillance systems making growth more difficult as greenfield opportunities are fewer. We believe these growth projections will be hard to hit as US and Europe 2010 growth is likely in the 0-5% growth range. Plus, if any recession or contraction occurs by 2014, hitting an average of 10% growth would become essentially impossible.

IP Video Adoption by Segments

The following graph shows the percentage adoption of network vs analog video by segment.

  • Residential: ~15%
  • Healthcare and Education: ~45%
  • Retail and Banking: ~12%
  • Transport and Government: ~35%

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One clear pattern from these adoption rates is the high correlation between network video adoption and surveillance over larger physical area. Notice how the top two segments adopting video (healthcare/education and transport/government) generally have large facilities or campuses to cover. Prior to the rise of megapixel, using IP across large areas was the top rationale for IP video migration.

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One market where we think the estimation is low (or at least poised to change rapidly) is residential. While residential is a traditionally undeserved market, USB camera and cheap cube IP cameras have made IP a no-brainer for residential users who want 1 or 2 cameras. For this very common and growing application, we think IP will dominate.

Growth Projections by Segment

The following table forecasts growth rates by segment. Key claims to note:

  • Transportation market size projected to more than double to $3.6 Billion (or 25% of the global market)
  • Government market size projected to double to $2.3 Billion
  • Banking/finance and retail projected for lowest growth rates

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We are skeptical of the transportation projection. On the one hand, transportation is likely to grow as it is a relatively underserved segment that benefits from two of IP's two biggest strengths - transmission across great distances (IP networks) and coverage of large areas (megapixel). On the other hand, it seems hard to believe that 1 out of every 4 dollars spent on video surveillance will go to the transportation market. There's just too many other markets/applications out there for spending to be so heavily concentrated in transportation.

The low projections for banking and retail do make sense but with some questions noted. On the one hand, banking and retail were earlier adopters of video surveillance so they are more of a replacement market than a greenfield opportunity. On the other, these segments both have quantifiable unresolved losses (shrink, fraud, etc.) that could easily justify significantly greater expenditures. By 2014, we think video analytics will mature enough to see a boom in surveillance spending for these markets. While we are skeptical of recent video analytic performance, such problems are not difficult to resolve in the next few years.

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