Nuvico Shutting Down - The China Conclusion

By: John Honovich, Published on Jul 27, 2016

Nuvico is shutting down.

And this is the end game of the Hikvision and Dahua race to the bottom.

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

*** **** ** *** end **** ** *** Hikvision *** ***** **** to *** ******.

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

Who ** ******?

******, ***** * **** player, *** *** ** * number ** ***** '******' providers, ** ******* ******** offerings *** ********* ****-*** products **** ****, *********, Sony, ***. ***** ******* Watchdog, *****, *********, *********, etc.

What ********

***** ****** ******** ***** Director,**** *******,********* ** *******:

*******’* ***** ******* [*** greatly ********** **] *** ******** made ******* ***** **** to ***** ***** * popular ***'* **-*** ********, in ** ****** ** maintain * ****-*********** **** in *** ***********

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

*** *** **** ** that? ******* ******* ****** manufacturers ****** ****** **** pace **** *** ***** cuts ** ********* *** Dahua. **** **** *********** forced ** '**** ****'.

*** **** **** **:

****** ** ********* *** otherwise ***** ******** **** with **** *** ****** recognizable *****-***** ***** ********

***** ** ******* ************** given ********* *** ******** 10 ** *** ***** more ** ** ***** and ********* **** ******.

****************

** *** ******* ********* that ****** ************ ************* are ***** ***** ******** and **** ****, **** Nuvico, **** ******* ************* their *** ********, ********* to *** ******* ****.

** ** * *********** move, ** ****, ***** most **** ****** ***** equity ** ***** *****-*** to ****** ***** *** partners ********* ******** **** them.

More ** ****

**** ** *** ********** in *** *****. ** expect **** ** ** one ** **** **** the **** **** ** two, ********** *********** ********* *** ********** monthly ***** ****.

Where ** **?

*** **** ******** ** ******'* former ******** ***** ********? He ** *** ** RSM ** *****. *** circle ********.

Comments (24)

Next month: "Nuvico Shutting Down - The Chinese Conclusion"

Month after: "Digital Watchdog Shutting Down - The Chinese Conclusion"

Month after: "Flir Shutting Down - The Chinese Conclusion"

Month after: "Bosch Shutting Down - The Chinese Conclusion"

Month after: "Avigilon Shutting Down - The Chinese Conclusion"

Month after: "Sony Shutting Down - The Chinese Conclusion"

Years later: "The Senate investigation has revealed today bribes and kick backs to federal regulators, charged with finding and prosecuting price fixing and antitrust activity, by a popular Chinese camera manufacturer, while cyber security firms are still finding new cleverly hidden back doors software code for hackers to use. But the damage is already done, with so many well known competitors out of business. Media sources began picking up on the story when multiple high profile companies and government agencies starting complaining about sharp price increases from their vendors, while on the other front their IT staff noticed sharp, unexplained increases in their networks activity. Many say this was well known for a long time in security circles but ignored by sellers who hoped to gain on the low prices while they were occurring. We caught up with one such dealer and when asked if this was true, he simply replied "hey man, every one was doing it, I just had to get mine while I could". While considered a boon for the few companies left who predict a sharp rise in sales as the former manufacturer cameras are replaced, the cost to businesses and the economy is expected to number in the billions."

Month after: "Flir Shutting Down

I am pretty sure you are exaggerating to make a point but to be clear for others, really big companies, with diverse businesses are not going to shut down because of Hikvision / Dahua. However, some may reduce funding for their video surveillance businesses because they view it as less profitable and others might close down just those divisions.

That said, I think the main risk is for independents (like Nuvico) who do not have other businesses / revenue streams to fall back on.

Thank you Hikvision dealers and competitors. I think that is the most votes a post of mine has ever gotten!

Its time to air one of my pet peeves...

Companies like Hikvision, Honeywell and others simple don't care about anyone or anything save themselves. It called greed. Their was a day when such acts were not rewarded. Today "cheap" is reward which is not a good thing.

As a rep I come into contact with countless providers (dealers) and to a person, within moments of shaking hands. They start to tell me about their own pet peeve, mainly just how sad it is that customers are so stuck on "price" and as a result their never sure if there going to make it to the end of the year.

I understand that some of this maybe the provider taking a position to defend himself from my own high prices. But this is when I tell them this story, which is generally true and has been repeated a number of times and to date the results are unchanged.

You tell me that your customers are "price sensitive" and I ask you why? And your replay is generally that it's the way of industry. To which I say no it's not the industry it you!

Which is followed by "Me!"

At this point, I go on to tell them the following...

If you get on the phone and seek out the services of 12 of your fellow providers, asking them to supply you (using a different name) with a bid within the next two weeks (it called a deadline) at such and such address, the following will happen time and time again.

You will be lucky if you end up with 6 bids, one or two may in fact be written bids, the others will more likely then not be hand written on a yellow pad, which may have been handed to you at the time of your site visit. Again, if your lucky, one of the 6 bids will be offering a brand name other then what the other 5 bidders are offering.

Bottom Line: If you the provider is one of those 5 bidders and you complaining about price sensitive customers, you're in fact in that group of 5 - that not good.

Five of the six providers unknowing took the prime reason for buying away from the would-be buyer and left them with only a singe buying choose "price".

Generally, buyers look for differentials when choosing a product. When a provider takes that choose away, the buyer is left with only price as a differential. In the above case it most likely that the customer will pick the one bid that offered a different brand because that provider stood out from the mob.

Today's providers have been repeating this error for so long I'm not sure its even possible to correct at this point, maybe the next generation will be able to correct the sins of their fathers.

Ok rant over thanks for putting up with me. As I ofter say the above is just a thought or two and nothing more....

Richard,

Thanks for sharing!

You tell me that your customers are "price sensitive" and I ask you why? And your replay is generally that it's the way of industry. To which I say no it's not the industry it you!

In fairness, it is hard not to follow without exiting that part of the market, no? Unless you really can show clear premium, if prices are going down, you need to match.

Related, I think it's better to think of customers as responding to price as much as being 'sensitive'. What I mean is if Honda started selling new Civics for $10,000, the car market would change quickly, not because people wouldn't have previous pay $20k but because one major supplier cut prices in half.

Normally, lower prices is a feature of capitalism when fair competition allows markets to clear. But, in our industry's case, we have a few entrants who are (at least for now) not bound by those same profitability constraints, creating this situation.

Companies like Hikvision, Honeywell and others simple don't care about anyone or anything save themselves. It called greed. Their was a day when such acts were not rewarded. Today "cheap" is reward which is not a good thing.

There has never, ever been a time when greed was not rewarded, at least in the short term.

Customers buy when perceived value is higher than asking price, not when it is the same as or lower than asking price. Say you walk into a shoe store. Salesperson shows you two pairs of shoes. One pair is $100 and the other pair is $600. They both seem identical to you. You ask the salesperson what the difference is, and all they say is "well, the $600 is from China". You'd have to be an idiot to buy the $600 pair, right?

But if the salesperson takes the time to break down the differences until you understand what, exactly, you're getting for the extra money... well, now you're making an educated choice. And it still may be that you decide to to buy the $100 pair. But if the salesperson can convince you that there's more than a $500 difference between them, then... well, they still might not be able to afford $600, but at least now you've got a fighting chance.

Thanks John.

My firm came to the HIK game fairly late (the last six months), and it was a result of market demand. I either had to play the game, or clearly lose a large portion of our bread-and-butter mid-commercial market customers to those who were offering "lower cost solutions."

As a relatively new participant in this forum, I am interested whether there is actual hard evidence that HIK is being directly subsidized or if their pricing is more largely a function of China's broader currency manipulation.

Unless The Donald is elected and the US government--along with international fair trade agencies--enforces truly fair international trade practices, I do not imagine this ship changing course any time soon.....

Charles,

Welcome!

I either had to play the game, or clearly lose a large portion of our bread-and-butter mid-commercial market customers to those who were offering "lower cost solutions."

Totally makes sense.

I am interested whether there is actual hard evidence that HIK is being directly subsidized

Hikvision is principally owned by the Chinese government and the Chinese government is their largest customer so it goes far beyond subsidies. For instance, ~72% of Hikvision's revenue is still from China and they make huge profits, with the paradoxical situation where the government is essentially paying itself, while driving up Hikvision's very high stock price.

The Chinese government is certainly funding Hikvision but it is not like an American style subsidy where the government gives X dollars for every bushel of corn or pound of commodity produced.

Related:

Finally, as for:

I do not imagine this ship changing course any time soon.....

It may very well change course. China is going through its most challenging economic situation in a decade or more. For now, they are piling on debt to keep up growth. At some point, it will have to change. And then, Hikvision may face huge pressures both inside and outside of China.

The Chinese government is certainly funding Hikvision but it is not like an American style subsidy where the government gives X dollars for every bushel of corn or pound of commodity produced.

But when you say 'funding' do you mean funding in the sense of giving them money over and above the market value of the products and services delivered, or just 'funding' by virtue of being their largest customer?

IMHO, Charles may mean the former.

Next month: "Nuvico Shutting Down - The Chinese Conclusion"

Month after: "Digital Watchdog Shutting Down - The Chinese Conclusion"

Month after: "Flir Shutting Down - The Chinese Conclusion"

Month after: "Bosch Shutting Down - The Chinese Conclusion"

Month after: "Avigilon Shutting Down - The Chinese Conclusion"

Month after: "Sony Shutting Down - The Chinese Conclusion"

Month after: " No more IPVM - nothing new to read,argue,debate... The Chinese Conclusion" :)

So who is the next manufacture to close their doors? Thoughts?

Speco?

Mentally ill from Amityville

About 2 years ago I had integration issue with their recorders. A customer called in to report that their ONVIF protocol camera wasn't connecting to their box. So after chasing down the sales rep from Amityville and then telling them I'd like to assist in improving their integration, they pushed me off. So the customer returned Speco's equipment and went with a recommended model.

I expect them to close their doors next. Their "Intensifier" is horrible.

Longbets is currently offering

  1. NUUO @ 3:1
  2. Pelco @ 8:1

and then the field ;)

NUUO isn't a camera manufacturer.

NUUO isn't a camera manufacturer.

And your point is what exactly?

They make DVR's and NVR's don't they? You don't think Hikua's $250 NVR's are hurting them as much as any $80 camera hurts camera manufacturers?

And they are selling cameras too, even if apparently just OEMed like everyone else.

NUUO

Is CNB still around?

I think Digital Watchdog should discontinue their camera line completely and focus on their Spectrum product only. Another installer of mine replaced 50% of their cameras after 6 months (IP and Analog). As we speak, their cameras are dropping out one by one. So much for the 3 year warranty that was honored at the time of install.

What's sad is the Spectrum isn't even their dev! If that's the only part worth saving, what good are they? They are good at marketing software? Hardly a value added proposition. All they do is delay the release of updates, fail to support their users, and add cost in the middle. That's not even mentioning the delay in getting licenses.

I can completely understand and relate. My issue is that over the past 5 years I've deployed over 200 systems and hundreds of IP licenses with them. I'm "ALL IN". Therefore, it's challenging to migrate customers who are familiar with the product (and have multiple locations on the same software) to move away. They have no release schedule, and the licensing procedure is a nightmare. However, their Linux availability is great for load-balancing the Windows server when it comes to failover.

It's the only reason I haven't migrated to Milestone.

Regarding their dev, I love the Network Optix colors better, but could not go that route due to the OEM/ODM agreements.

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