The video surveillance industry has entered a new era.
This era is disrupting the biggest players in the industry and changing long-held industry dynamics.
The Old Era - 2009 to 2013
Megapixel surveillance first broke through in 2009. Though they had been available for many years before, going from MJPEG to H.264 plus the entrance of major manufacturers into megapixel, empowered megapixel to go from niche to everywhere.
Today, megapixel is not only expected, 720p and even 1080p are commonplace, if not increasingly commodities.
~$100 MP Era
In the past year, a new era has emerged.
In the previous era, megapixel was 'novel' and relatively expensive. 'Cheap' megapixel cameras were $400, $500. Most megapixel cameras were $700 or more.
Price has certainly declined year by year, but the drop in 2014 / 2015 has been extraordinary.
Now, ~$100 MP cameras are increasingly ordinary. HD analog cameras are often even less than $100 (see HD Analog vs IP Tutorial and HD Analog Usage and Rejection Statistics). Even MP IP cameras are routinely $100, driven by 'China' - The #1 Threat / Force in the industry.
Drop in Premium Side Too
Those "$100" megapixel cameras are typically fixed focal length, short range integrated IR offerings.
But even the 'high-end' of megapixel cameras has dropped down in price dramatically. Where just a few years ago, true WDR, smart IR, auto-focus, etc. where the province of ~$1,000 cameras, now you can routinely find them in $500 ones.
For manufacturers, especially the established Western brands, the impact has been severe. A big part of the problem has been that the 'Chinese' historically only OEMed, allowing Western brands heavy markups. Now, the 'Chinese' are building their own direct branded businesses (see Top Manufacturers Gaining and Losing Ground), which is punishing revenue and margins for manufacturers. Another key issue is improved components (sensors and chips), that let 'anyone' deliver quality video.
There is no easy way out for Western manufacturers. 'Solutions' are certainly one attempt, with camera manufacturers buying VMSes (e.g., Tyco/Exacq, Panasonic/VideoInsight, Canon/Axis/Milestone). Even the most successful recent solution provider, Avigilon is clearly feeling the market pressure.
Ultimately, developing new, innovative features and offerings that the 'Chinese' cannot replicate might be the best path but most Western manufacturers likely lack the resources or engineering to truly withstand.
For integrators, the impact is mixed but the change is problematic.
Since so many integrators rely on the profits of marking up cameras, the price drop is a challenge. Lower product prices with the same markup percentages means less total dollar profits. Combined with product pricing widely available on the Internet, there is clearly a lot of price pressure.
We think embracing "$100 MP" is important, because the reality is integrator competitors are already doing so. You might as well be early, make some more profits than be late and lose out to the earlier adopters.
Golden Time for End Users
For end users, it is good times.
Cameras have gotten a lot better and they have gotten a lot cheaper. Video coverage and quality that was a dream 5 or 10 years ago is now easy to achieve.
The main practical barrier is incumbent manufacturers fear mongering about lower cost solutions. Certainly not everything low cost is good (beware of Chinse spammers with $39 cameras) but there is now a vast array of low cost, MP products even from bigger manufacturers (e.g., from our recent testing Honeywell HQA HD-CVI, testing Samsung Lite, etc.). Use caution always but do not be suckered into paying 2x or 3x more than what the emerging market norms are becoming.
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