Pelco Is "Bringin Blue Back"

By John Honovich, Published Dec 17, 2019, 09:14am EST (Info+)

Pelco is "BRINGIN' BLUE BACK", according to Pelco's new CEO Kurt Takahashi’s presentation at the Imperial Capital Security Investor Conference.

Inside this note, we examine what Pelco's CEO said, what Pelco's strategy is and how likely they are to succeed at it.

Bring' **** ****

***** ** ********* *** ******** **** (i.e. *****'* ******) *** *** *** back ***** ***** ***/ ******* ****** ***** ***** ** the ***-*****.

******, *****'* *** *** *** *** claiming **** ** *** ******** *******. Unfortunately, *** ****** ****** *** ** misread **** ****.

*****, ***** *** ******* ********* * few ***** ****** **** ******, *.*. in**** **** ***** ******** "***** ** back."(********: ** ****'*.)

Fundamentals ****

**** *****'* *** *** ********* *** the ******** ** ******* *** ************ back *** ********* ******** *******. ** observed:

**** ** **** ** ** ***** is **** ****** * ****** **** company **** ** ************** *****

** ***** ******, **** ***** **** weird, *** ** **** ****** **** they *** ** *** ******* **

********** **** **** *********, ******** ********** away *** ** **********

**** ****** **** *** ***** ********* decisions ** ******** **** ********* ********’* cellphone *** *******.

*************, ***** ** *** **** *******, after * ***** ***** ** ********* lead ********, ********* ***** ************ ** likely ** ************* ******* *****.

Customer *******

**** *******, *****'* *** ********** ********** the ******** ** ********* ******** *******, noting **** '**** ** *** ***', the ***** ***** *** *** '**** standard ** ******** **********' *** **** the #* ***** ****** *** ** bring **** ***** ******** *******.

*** *********, ** ***** **** * financial ***********, ** ******** ******* ** the ******* ** ********** **. *****'* CEO **** **** *** *** **** support ** *****'* ******** / ***** Transom ** ************ ******** *******.

** **** ********* **** **** **** "highly ******* ** *** *** ******* from ******** ** ******** ** ****, the ****** ********* ***** ******** **********" and **** ***** *** * "******* change ** ***** ******* ** ******** experience."

** **********, *****'* *** ******** **** the ******* ** *** **** *** not ********* ** ********, *********** **** they *** ******* ** ***** "** time, **** ** *** ** *** going ** **."

Product ****

*****'* *** *** **** ********** ***** committing ** ***** ******* ************ ** developments ** *** *****-****, ****** **** they **** "********** * * **** roadmap, ********** **** **** ********** ******" and **** ******* ***** ******'* ***** ************ **** *** ****.

Reasonable - ******** ******* ****** *******

***** ******** ******* *** **** **** a ******* ** *** ******* ***** competitive ********, *** ******* ** **** improving ******** ******* *** ** **** more ******* **** ********** *** ********. That ** *** ** *** ******** service ** **** *** **** ** a ******* ***** **** ****** **** and ** ******* ** ***** *** money, ** *** ** ******** ****** than *** *****-**** ********* ** ********** new ********.

Pelco *** * ****** ******

*****'* *** ************ **** "****** ** not *** ***** ** * ****** leader, ****’* **, ************". ** *** one ****, ** ** ****** ******* the *******. ** *** ***** ****, it ** ********* *** ***** ** be ********* ***** **** *** *** versus * ****** ***.

Big ********* ******

***** *** ******* ********** *** ******, Pelco's *** ********** **** **** ***** have **** ** ***-*****, ********** ********* as *** ***** ***** *****:

** **********, ** *****, "***** ****** AT&T ****** *****", **** **** "*** a *** **** **** ****** *** fulfillment *******" *** "********** ****** ** the ****** ****".

** ***** **** *****'* ***** *** presence ** ***** ******** ****** ** advantage *** *** *******.

Reaching *** ** *********

*************, *****'* *** ******** **** **** have *** **** ****** ** ***** their *********, *******:

**** *** ***** **** ***** ** many ***** - ****** *********, **** somewhat ******

**** ****** *** ** ******** ** business **** **** **** **** ******* from *****

Acquisitions ********?

*****'* *** **** ********* **** ******* (their *****) ***** ** '****** ** acquisitions *** *** ***** ******' ********** that *** ******** ******* **** '********* are ***'. ***** ****** ** ********* provider ** *** **** *** ***** could **** ***** ********** ** ***** are *** *** **** ******** ******** to ******* *************.

Outlook - ******* ********

** ***** ****** *** ****** ** judges ***** ***** ** **-***** *** Pelco, **** ****** ** ************. *******, that ***** *** ** ********* *** reasonable ***** ***** ***** ****** ***** and **** *** **** ********* ***** are ** ******* ***** *********** ** a **** **** **** ***** *** at ***** ********* *** ******* ***** climbing **** **.

Vote / ****

Comments (25)

I wonder why people are selecting negative? Based on the above this seems like a reasonable evaluation of where they are at currently and plans to do better without overcommitting on product development. While it's definitely too early to tell I can't imagine getting out from under Schneider is a bad move and that, worst case, it is a neutral item. I do not envision Pelco falling into a worse state than where they are at currently without utterly incapable management. This has not been demonstrated to be the case yet.

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I agree that the pivot from the Schneider umbrella is overall positive, but without a market strategy to give them a key differentiator, they will be a lost cause.

I presume their plan is to approach the Tier 1 market brands, which is saturated with no less than 5 brands in the spectrum. Each of these brands has a good story, such as Panasonic or Avigilon with their respective platforms. Each of these brands also has established, supported camera libraries with leading VMS platforms.

Until Pelco develops a market strategy around what their value proposition is - they are the equivalent of a high priced camera with name recognition. We already have Sony filling that market niche.

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Each of these brands has a good story, such as Panasonic or Avigilon

Panasonic has a good story in surveillance? They are going through the same type of spinout right now - Panasonic Sells Off / Spins Out Security Business

More broadly, I don’t think “tier 1 is saturated” as many historic companies like Panasonic, Pelco and Sony have been wounded over the past decade.

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We're on the same page for Panasonic, John. Without digressing too much I would argue Panasonic's foothold through VI maintains their presence in the short term. R&D needs to happen, but the foothold that exists is a resource Panasonic can leverage... if it can deliver excitement in 2020.

Pelco doesn't have the benefit of much remaining market share. They have the R&D Requirement without that extra foothold.

Edit: But they do have American Made going for them!

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They are as American made as Nellys ( ok maybe not Chinese OMD, but close) . Everything is offshore, sure some parts are “assembled” here to meet the requirement but that is just a loophole and everyone knows it.

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I have not seen Pelco claiming to be made in the USA in the last few years, indeed, over the last decade, it's been quite public of them shutting down US manufacturing, e.g. Pelco Shutting Down Clovis Line, Laying Off 200.

We tested Pelco's latest, Pelco GFC 4K Dome Camera Tested (IMP831-1ERS) and the camera was made in Taiwan, not the PRC (China).

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In the industry, I think Pelco is laughed at in its current state. However, they’re so well known that they could turn themselves around. I think if they can turn it around, they can be huge again. I would rather go to market with Pelco than what I am going to market with now. As of right now. Pelco has nothing for me, or at least I assume they don’t. This is where pelcos real problem is. I don’t have time to investigate your company. You’ve got to sell me your product.

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Pelco's number one asset is their name and past reputation. If they can resurrect that, they have a fighting chance of staying afloat long enough to get their R&D in gear and get their product development folks time to make something worth buying.

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Pelco's number one asset is their name and past reputation.

Yes, that was basically the pitch in the investor deck they sent around when shopping the company for sale. However, people buying product today are typically evaluating on something closer to a cost:feature ratio than a brand:feature or brand:price ratio.

Pelco needs to address the cost:feature ratio relative to their competitors in some subset of the market in order to really gain traction, IMO. For all practical purposes, that could be done under the Pelco brand, or a totally new brand (eg: Verkada).

The only path to success for Pelco is to make really good stuff that people are willing to pay for. Without a strong R&D component, there is not really going to be much to grow the company on, much less sustain it.

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The only path to success for Pelco is to make really good stuff that people are willing to pay for. Without a strong R&D component, there is not really going to be much to grow the company on, much less sustain it.

Agreed. There is still time for them to prove themselves as a new company. I'm much more optimistic of a turnaround for Schneiderless Pelco than say, Arecont, which has many more challenges. Improving customer support is the lowest hanging fruit for Pelco's new CEO to address right now while Pelco works on R&D. R&D takes time. There are enough manufacturers on here that can explain how long a camera takes from conception to shipping product. VMS development and advanced features likely take even longer.

Can a manufacturer please answer how long it takes to develop a new camera? Is it 6 months? A year and a half? I'm talking new firmware and all, not rehashing of old items.

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Can a manufacturer please answer how long it takes to develop a new camera? Is it 6 months? A year and a half?

It is dependent on the size of the team, and if you just mean "something that streams video", or "something with some degree of intelligence or advanced features".

5 man-years of dev/qa time will get you pretty far along if you are working off of a proven reference design and/or with components the engineers are already somewhat familiar with.

If you are trying to take the very latest Ambarella chip, coupled to a pair of 4K sensors and create a super wide angle camera with adaptive streaming, analytics, edge storage, deep ONVIF support, etc., then 8 man-years would not be over-estimating things.

This would also involving leaning somewhat heavily on your ODM/manufacturer of choice to handle some of the basic bits of hardware component selection, netlists/board layout, etc.

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Thank you! That is great info.

When you refer to man-years I'm assuming there is a limit to how many people can productively be assigned to producing the unit. For 8 man years what is the point where more team members become far too significant of diminishing returns?

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A team of somewhere around 6 is ideal, IME. One person working primarily on the core firmware/making the device boot and function, a UI/UX person, a couple of people working on the non-basic features (eg: analytics, dealing with ONVIF, Genetec, etc., protocols), and then a QA engineer and maybe a hardware person working on fine-tuning some of the board and component stuff.

This is based on doing a mostly-new thing. If you're more or less taking your 1080p camera and scaling it up to a 4K version, 2 or 2.5 people might be sufficient.

I know you didn't ask this part, but on top of all that, you'll have a tech-pubs person to write all the documentation. A product manager to handle specification sheets and whatnot, a product marketing person, a bunch of costs to deal with certifications (UL, CE, etc.), maybe a packaging engineer if your ODM is not supplying that. And a few more functions I might be forgetting.

Even doing a relatively simple thing like a moderately-featured 4K camera can easily become a million-dollar+ endeavor pretty quickly. I think customers sometimes do not realize this when you see a $200 camera that is not all that revolutionary, maybe assuming that $200 camera cost "nothing" to develop. A $200 MSRP camera means you probably have a COGS of around $40-$50, and a selling price to your dealer channel of around $120-$140, giving you maybe $100 of profit. You have to sell 10,000 of them just to break even, and then when you factor in sales and marketing costs, plus all the other overhead of the business, probably more like 30,000 units to really "break even".

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IPVM team: this seems like a good topic for an article. There is some very interesting info here that integrators and end users are not exposed to.

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I like the idea of PELCO and the challenge. I don’t know if hiring “had hired Pivot3's video surveillance GM is going to have the vision for a camera/vms company....but hey, I could be wrong.

I wish Kurt luck in this, they will need it. I think an acquisition of any size would be seen as a negative. PELCO, short of the encoder/decoder OEM and CM series cameras seemed to design their own stuff with a focus on installer/dealer ease.

*edited because I was lazy!

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PELCO, short of the encoder/decoder OEM and CM series cameras seemed to design their own stuff with a focus on installer/dealer ease.

That's something they definitely did better than anyone else. Bosch might have been a close second.

Best example:

This corner mount was designed for the realities in the field. Anyone trying to mount a camera on a corner without a bunch of unsightly pipework or liquid tight to get around the column the product was perfect. The transformer was not typically necessary. It must have taken some thinking outside the box to come up with the SWM-CA24 instead of going with the usual corner mount like this:

Image result for camera on corner of building

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Also, from what I recall their fiber modules could be mounted directly in this enclosure.

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BOSCH was certainly a close second when they OEM’d enclosures and mounts from PELCO. The rest...not so much.

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BOSCH was certainly a close second when they OEM’d enclosures and mounts from PELCO. The rest...not so much.

And Pelco was OEMing fixed cameras from Panasonic. Sounds like the relabelling business has been going on for a long time.

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Kurt is a great guy and I think he will turn Pelco around. The few years he was President of AMAG their customer service and support became a 150% better. I have high hopes for what he will achieve.

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Any reason he's repeatedly referred to as "Pelco's CEO" instead of by his name?

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Yes, because many people do not know who the CEO of Pelco, Axis, Hikvison, Milestone, etc. are. So we find it clearer to use their title than refer to Thingaard, Mauritania, Takahashi, etc. Does that make sense?

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Sure, just seems like the name would be mentioned at least once? Just nit-picking here, this is an informative article!

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Good point. I added Kurt Takahashi’s name to the first line of the post. Thanks.

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out of the red and into the blue...

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