IQinVision Management Shakeup Examined
Two weeks ago, in the original version of this note, we examined a number of key challenges at IQinVision including repeated layoffs and failure to keep pace with the megapixel market growth rate. Sources indicate that multiple members of their management team, including the CEO, have been let go. Now, IQinVision confirms the CEO change.
Our concerns and issues identified below remain:
IQinVision was one of the pioneers of the megapixel camera market. Just a few years ago, IQinVision was widely acknowledged as one of the biggest and perhaps the best megapixel manufacturer, especially in the US market. Since then, demand for megapixel cameras has exploded but IQinVision's growth has not matched the overall market. In this note, we examine what we believe happened and where IQinVision now stands.
Let's start with a review of key points:
- Our sources indicate that IQinVision's 2011 revenue is in the ~$20 Million range, roughly the same level the company has achived in the past 2 years and a fraction of what rival Arecont Vision is reporting for 2010.
- While IQinVision reports doubling revenue from 2007 to today, we believe that most of the growth happened in the first half of the period and minimal growth over the second half.
- IQinVision has conducted a series of layoffs over the last 3 years with at least one significant event per year.
- IQinVision was a vocal [link no longer available] skeptic [link no longer available] of H.264 for a long time.
- IQinVision was late in migrating over to H.264 with one of their most popular series not offering complete H.264 support until this summer (Sentinel HD H.264).
- In the past 3 years, literally everyone has jumped into the megapixel market. Among them, Axis, Panasonic and Sony are likely the most relevant to IQinVision's market positioning.
We see two factors impacting IQinVision:
- The expansion of the camera incumbents like Axis and Sony into the market. IQinVision was generally the choice of people who wanted quality products. Axis and Sony now provide competitive offerings (e.g., integrator interest in the Axis P series is quite high - a direct alternative to most IQinVision products).
- The delay in going all in for H.264 and the company's skepticism towards H.264. Whether there was any doubt a few years ago, now it is very clear that H.264 has won the battle for sales and mindshare.
With a full H.264 line today, IQinVision has resolved one of these issues. However, the key challenge that will remain is for IQinVision to differentiate themselves against the mainstream camera incumbents (all of the 'original' megapixel manufacturers have had to do this - e.g., Arecont is the cheap choice, Mobotix is the all in one choice, Lumenera is essentially gone). While IQinVision will likely continue to make quality products, that will not be sufficient to compete directly against much bigger organizations that also make quality products.
With a significantly revamped management team and new CEO, it will be interesting to see if IQinVision's strategy will change. Partners and dealers should track such changes closely.