$20 MP Cameras Are Here

By John Honovich, Published on Apr 14, 2017

The $100 MP era arrived 2 years ago.

Now, welcome to $20.

No need to buy from spam emailers or unknown sources from China. Now, major local / US companies are offering $20 HD cameras, in the ongoing race to the bottom.

Inside this note, we review some of these offerings, examining the underlying drivers and the impact this is having.

Offers ********

**** $** **** ** Supercircuits:

*** **** $* **** to *** *** **** brand: 

 

*** ***'* *** ***** brand, ***** ******** *** *** *** prices, ** ********** *** most ********* ** $**: 

Counter - *** ********** ****

*** **** ****** ******* is **** ****** ******* is ****** ***** ***. But *** ******* **, regardless ** *** ***** it ** ** **** a ******, ********* **** ADI, ****, ************* **** lots ** ***** ***** they **** ** *****. Even ** ******* **** nothing, *** **** ** ship, *****, ****, ******, warranty, *******, ***. ***** still ** ***** ***********. And *** ********* **** are **** ********* ******* these ******** ****, **** as ***** *** *********, have **** ** ***** own ***** ** *****.

Counter - ******** *********

*** ***** ******* ******* or *********** ** **** is **** ********* *** clearing ********* (*.*., **** came up ** *** ***** *********** *** ******* ** ****). *** ******* is **** **** *** evidently ******** ********* *********, which ****** ** * problem ** *********** **************. Certainly, ******* ************ ***** is ****** **** ********** them *** ********* ****** to **** ************ ******** at ***** ********* ** damaging ** *** ********* themselves *** *** ********.

What ** *** *****?

*******- **** $** ******* ** the *** ******? **** is ******* ****? ** it ***********?

Comments (35)

Hot garbage.

Super Circuits and FLIR, aren't they rebranded TVI and rebranded CVI?  Please correct me if I'm wrong.

yes they are

rebranded TVI and rebranded CVI

Just to clarify, TVI and CVI are technologies. Those technologies can be used by different manufacturers. For example, TVI is from Techpoint. Techpoint's biggest surveillance customer is Hikvision but TVI components can be bought from Techpoint for one's own products, from Hikvision with finished TVI products or from other Asian manufacturers who use TVI components and OEM them to Western companies.

As for Super Circuits and FLIR, they, respectively, significantly OEM from Hikvision and Dahua. However, these individual products might be bought / re-labelled from other Chinese suppliers who offer TVI or CVI products.

The intrusion category set off shockwaves in the late 1980s of $0 Down, $19.99/month for a very basic alarm system to consumers. Is the basic video system now poised to repeat that same proposition? As the burglar alarm community realized, regardless of net equipment costs, that mark proved way too low to sustain service calls, premature cancellations, ongoing cash flow needs, etc, to net the ROI they had hoped for.

The industry will repeat itself however, thanks to your stated points about over production, destructive market tactics, etc. Throw in the obvious that the consumer at large can find like pricing themselves online and it is the entire surveillance industry coming down the home stretch to that proverbial zero finish line.

There might be another example from another industry.  Does anyone remember all of the PCs that were for sale from places like Best Buy circa turn of the millennia for not only $0 but frequently they paid you to take the PC?  All that was required was a 3 year contract with AOL, Compuserve, and other companies.  This proved to be unsustainable but several smaller and one larger PC company failed in that race to negative zero.

Seems like a good time to start pushing for these devices to be made from cleaner materials that are easier to recycle.  If we're at this price point, you can't tell me that the market won't support it.

 Right now Supercircuits has the 720p HD TVI camera for $12.99 each.  I just saw the add on thier site.  These typically have a couple complications; They require  an HD TVI DVR. Power supplies, cables, and hard drives are sold separately.  If they offer a package of this stuff you are limited on camera choice to what is in the package.  But, they do package everything you will need with box kits and the cameras work well if you are dead set on DIY.

Right now Supercircuits has the 720p HD TVI camera for $12.99 each.

James, thanks, good find.

See below, I guess the $20 cameras are the better stuff....

The camera market reminds me of the building products market.  Look at kitchen faucets, for example.  You can go to Home Depot and but the super cheap, super basic faucet for what, $30 (Analog HD)?  Or you can get one in the range that most people do, which is probably $100-$300 (Hanwha, Axis, Panasonic).  If you want to splurge, you can spend $1000 or more (Thermal magic super cameras).  There's a place for all of them.

 

That being said, the money isn't in the faucet, the money is in the construction.... 

Dummy Cameras are priced between $8.00 and $22.00.  I think the one in this image is $21.99. 

Although often overlooked, no one, not Axis not Sony, has been squeezed more by falling prices than the dummy/decoy market.

If Dahua added a blinking red light to their lowest cost bullet they could own that segment. Plus, they could promote them as a line of "unhackable cameras".

The ultimate dummy camera will be from Hikvision that looks dumb but is really smart like one of the cameras you see in the movies that spies on everyone. :)

 

I always wonder what is the end goal of slashing prices, if it was Hik or Dahua cutting in attempt to temporarily driving the competition out of the market it would make sense in some way but why would OEM brands will?

I'm sure $20 is a loss price, not way it's sustainable. 

but why would OEM brands will?

The OEM brands are caught in the same vicious cycle. If OEM brand does not participate in cuts, they will lose market share as well. And they have their own relatively fixed costs in admin, sales, support staff, etc. So unless they want to exit the market or face steep revenue losses, they are driven to match. And once they exit, getting back in is much more expensive and their existing business has some value so its hard to just say "Hey we'll exit for now and come back in a few years when the bloodshed is done"

I always wonder what is the end goal of slashing prices

One thing the Chinese manufacturers and business partners repeatedly say is that's the mentality / business philosophy in China, cut prices as much as possible, gain market share, knock out rivals. Related to that, another thing we hear regularly is that the Southern China / Shenzhen video surveillance manufacturers are especially hurting - ergo their willingness to sell for such low prices.

I vote a big YES, in this business (and other) it's the engineering and service that will make a company's profit in a rapid evolution!

 

It's more important now than ever before to learn how to build an RMR foundation. When we install a system, we DO NOT DO IT unless there's RMR affixed to the account. Low-cost cameras are opening HUGE doors. It's easier now than ever before to offer in-house lease for five years and upgrades every five years to keep them in the lease. This is both good for the customer and good for the company. The integrator gets predictable revenue and the customer doesn't have to spend a ton of money upfront and gets a new system every few years. Car companies have been doing this for a very long time. For businesses purchasing security equipment, there are nice tax advantages to leasing as well. 

It's more important now than ever before to learn how to build an RMR foundation. When we install a system, we DO NOT DO IT unless there's RMR affixed to the account.

That's good advice. I am not sure how practical it is for all customers as some, especially as they get larger, flat out want to buy. However, I strongly agree that trying to make money selling continuously falling hardware is risky.

Related, I talked to the CEO of a manufacturer / developer who says they only sell their offering (which includes cameras, hardware and cloud software) as a monthly service. One of the reasons / benefits that he cited (and I agree) is that it shifts the focus from "Hey why are you selling this camera for $100 when I can buy it here for $72" to "Does the customer get more value from the offering than the X dollar monthly service fee?"

We had a conversation at ISC West with a well respected Vendor of ours. We came to the conclusion that CCTV Surveillance has been commoditized. We're not selling high tech micro-sized electronics... we're selling wheat. 

Things just got really boring.

We came to the conclusion that CCTV Surveillance has been commoditized. We're not selling high tech micro-sized electronics... we're selling wheat.

I disagree strongly. There's lots of differentiation and improving features in video surveillance cameras - in imaging, low light, WDR, form factors, IR capabilities, encoding, etc. Ergo it's not wheat or oil or pork bellies.

The problem is that there are enough large suppliers, with big funding, who believe that cutting prices is viable business strategy that a vicious cycle ensues.

It's more like the dotcom bubble.

It's more like the dotcom bubble.

 

Now I feel better....

Now I feel better....

Lol, well bubbles burst. Commodities are just commodities.

Even the participants want the race to end, they just hope its their rivals that are bankrupted / pushed out first.

True, there are new features being added every 6-9 months, but if you're looking at numbers and not products we're not selling anything all that great. Margins shrink year over year, more and more players are saturating the market, driving cost down as well as any incentive to be in this industry.

Once HiSilicon makes a feature for the industry it's disseminated in such volume, from the lowest level manufacturer to the big-two we're stuck with (but certainly didn't choose). It's nothing special, because there are only a couple special manufacturers anymore, and I think they're in Sweden and Germany.

Anything coming from China is a worthless commodity, even if it has tremendous value to the end user, it has no real value to anyone trying to sell it (unless they can do enough volume to make the couple of pennies in profit worthwhile). I think this industry needs more competition, and less Chinese control. Why we would let the Chinese steer an entire industry is beyond me. We've gotten nothing but a race to the bottom.

Yea, you can argue there are one or two other players from other countries with innovative ideas so it's not monopolized, but in reality you know that it is. The consumer dictates what something is worth, and the consumer has deemed CCTV worthless in terms of dollars, but necessary.

From my point of view, I'm now engaged in the trading of commodities.

The consumer dictates what something is worth, and the consumer has deemed CCTV worthless in terms of dollars, but necessary.

No, that's false. Consumers are actually enjoying huge / unprecedented consumer surplus in video surveillance cameras.

The issue is that suppliers are willing to sell for much less than the value produced. Certainly, part of that is the normal process of capitalism and competition. But there can be breakdowns, like the dotcom boom where companies were willing to give thing away for free that cost them money and clearly had far more consumer value.

Margins shrink year over year, more and more players are saturating the market, driving cost down as well as any incentive to be in this industry.

I agree that margins are shrinking. I disagree that 'more and more players' are entering the market. The opposite is clearly happening, both in Shenzhen and with the international suppliers.

However, there are still enough in business that they are willing to cut prices into the 'bone' to stay in business in the hope that they can survive longer than their rivals.

I guess as a journalist you get to see things differently, and see different things. I suppose we should also differentiate "more players" as I suppose the number of manufacturer's isn't increasing... The number of "distributors" in America is greatly increasing! Everyone and their mothers are selling CCTV cameras for single digit profit margins.

Just do a quick search on Amazon and tell me what the industry looks like.

I'm not even sure this industry is worth surviving the "short squeeze" you're talking about. The problem with that theory is also that we're assuming after the lesser players get pushed out that things will return to some semblance of "normal" yet we all know that it won't.

It's already being decimated, and for what? So we can sell large swaths of our land to Chinese entities? So that the end user can have a vulnerable IP product deployed all over our nation? So Jeff Bezos can get rich and we can all cut each other's throats?

we should also differentiate "more players" as I suppose the number of manufacturer's isn't increasing

Yes, that's what I mean by 'players.' 

Everyone and their mothers are selling CCTV cameras for single digit profit margins.

We agree here that this is not sustainable and people will exit? 

The problem with that theory is also that we're assuming after the lesser players get pushed out that things will return to some semblance of "normal" yet we all know that it won't.

Good point. What emerges is a big question. The Hikvision theory is that they get so big and their competitors become so few, that they can make lots of money in the aftermath. That's not a good future for the rest of the industry. How this race 'finishes' will tell a lot about how damaged it is for the next 10 years. And it's hard to predict that far ahead.

When I first entered this industry, a "cheap" color camera was $300.

When I first entered this industry, a "cheap" color camera was $300.

For a long time, that price level held, with quality simply getting better.

And I do believe there are benefits (greater overall health) from more competition and lower prices but I think as prices continue to sink below $100, to $50, to $20, etc., it is becoming increasing obvious that this is unsustainable and unhealthy.

Ah, the good old days!

I'm telling you! Back when an alarm was priced on square footage and what kind of car they drove.

If I were to build an own global surveillance network I would give cameras for free,

then leave a backdoor to access them when connected to the Internet. And of course, there is the camera OSD as an advertisement media for sale!

Hey wait a minute, do you have a contact to Mr. Zuckerberg?

 

Soon you will get one in your cereal box!! I have seen watches in a cereal box why not a camera.. 

All great news for installers and consumers. 

Until the consumer realizes they don't need the installer.

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