Sony, your move now....
(it's not just the ousted GM that's the issue)
Panasonic has slashed prices on many IP cameras by 20% or more in the past few weeks. Will a new generation of cameras, along with new lower pricing, help to halt or turn around their popularity decline?
In this note we look at which models are affected, how it changes their positioning, and future prospects.
I think all the price reductions will probably put pressure for further consolidation in the industry.
I imagine you will see considerable consolidation over the next 2 years, not as a result of the top brands dropping their prices but the low cost manufacturers upping their game and commoditising the market, further more the potential for HD-CVI and similar low cost HD solutions will further force price erosion. It's going to be a fierce battle ground, many of those making ground will care little about protecting value in the channel. Manufacturers who foresee this may be looking for merger or cash-out opportunities, unless they are confident they have a strategy to differentiate or remain competitive on similar product lines...
Perhaps I am incredibly naive about manufacturing costs, but when Panasonic, Sony and Axis are charging roughly double what Samsung charges for pretty comparable features, and in some cases better performance, I just don't see a 23% price drop as anything more than a long overdue excursion toward the Land of Sane Pricing. Now, if Panasonic had done something years ago such as start making motorized autofocus a standard feature on all new iPro cameras, and given themselves a huge USP in the process, then I would be more understanding of (and willing to pay) gold-plated pricing. Instead I have gone in recent years from being excited about their IP cameras to simply feeling like the only thing being updated in the product line was the length of the name of their latest WDR iteration, and they were charging a $100 premium per word. So these price drops are excellent news. I see it less as crumbling to price pressure in the market and more as someone at Panasonic finally deciding they are serious about developing and selling IP surveillance cameras, and being relevant in the market again. If that's what this is, this is a good start.
Good points. A lot of it has to do with target gross margins that the manufacturer wants/ finds acceptable.
Now maybe Samsung's costs of good sold is somewhat less than Panasonic/Sony's but I am pretty sure Samsung is simply willing to take lower gross margins. They'll make it up on volume, etc...
My experience is that established brands hate cutting prices because executive management sees that as an excuse and offense to their overall position (e.g., "We're Panasonic, if you're (security division) not making your numbers, it's your fault, not the price.")
Engineering specs, as opposed to features, can vary widely between manufactureres and between models from the same manufacturer.
<<Perhaps I am incredibly naive about manufacturing costs, but when Panasonic, Sony and Axis are charging roughly double what Samsung charges for pretty comparable features, and in some cases better performance, I just don't see a 23% price drop as anything more than a long overdue excursion toward the Land of Sane Pricing. >>
Way back in '71(University of Santa Clara) we were told there is a big difference between raising prices and lowering prices as far as how the market takes it. Lowering prices usually has a negative effect on the consumer. They say..." but lets hang on to see if the prices go even lower" and....."what's the problem, why are they lowering their prices?" Panasonic prices are still too high, even with this latest "slashing". Wonder how soon they will sell out the ip/security camera branch of their brand?
Panasonic will not make up in volume their lower gross margins as a result of this price "slashing".
That is certainly a concern but what is the alternative? Start with really low pricing and then increase until you see a significant sales drop off. Big companies tend to hate low pricing :)
The other thing I've heard from manufacturers when discussing staring low and raising prices is that they feel that they cannot justify the price increase because the product has stayed the same.
Tough call either way unless you price it just right out of the box!
I think IPVM should test the cameras preperly and then only comment anything on the quality issue between Panasonic/Axis/Bosch/Sony vs Dahua/samsung/Hikvision. The premium brands offer cameras that last much longer with same clarity. There can be issue with some models in all makes. Generally, the customer will not regret bying the products from this reputed makes. Chinese/Taiwanese makes may not be using the best chips/sensors to produce the Top qulality. There must be some content in a sony /Axis/Panasonic that they are top choice of customers/ System integrators ! Who else offers corridor format / Rain wash coating / similar unique features ?
Thanks you undisclosed Panasonic sales person.
We have tested all the brands you've mentioned extensively.
Undisclosed B- I cannot talk for other Chinese manufacturers, but Hikvision is one of the leading procurers of quality components from Sony, TI, etc. I belive these are well know top quality parts.
I hope they do manage to maintain the margin it is in our own interest. The question is however, how is the large screen TV market these days or the Sony, Nokia and Motorola names in the mobile phone market. Badges only last so long in electronics. It has not even hit the fan yet in mobiles as the unknowns from China are bringing out some excellent phones have a look at the Oppo find 7.
Just because a company get's parts from name brand manufacturers does not mean they get the best parts. You have the option to procure whatever grade you're willing to pay for.
Undisclosed C- You can believe anything you want. Hikvision component volume is so high, I assure you the work very closely with our R&D and we get pricing according to volume, not by buying B-Grade components. While Hikvision is not perfect (yet), it seems to me that quality and performance as judged by independent tests and customer feedback is improving everyday.
Times are 'a changin'. The big guys with the old established brands and the high gross profit margins those brands allowed are getting knocked down to the mat. They will get up and go a few more rounds but the writing is on the wall, especially with the products talked about here on IPVM.
An old Chinese proverb from the I Ching...."perseverance furthers"........