Super Deals on IP Cameras Examined

Pelco has announced "super deals" on their IP cameras [link no longer available] through the end of September 2009. Called the "Go-IP" Promotion, the offer allows buyers to "Purchase a Spectra IV IP, Spectra Mini IP, Camclosure IP or IP 3701 fixed network camera for as little as $25 on top of the standard analog price."

This seems to be a good approach for incumbent manufacturers to create financial barriers for customers to switch to IP only manufacturers. While it sacrifices some profits, it helps retain existing customers and maximize the total volume of products purchased. I suspect other incumbent manufacturers will pursue similar pricing tactics as competition with IP only manufacturers intensifies.

On the other hand, this can be interpreted as a response to weakening sales (given Pelco's layoff, furlough, etc.). Pelco's parent, Schneider Electric just announced Q2 2009 financial results. Revenue in Pelco's group (Automation and Control) dropped a severe 27.6% in Q2 2009 relative to Q2 2008. Since this number contains results from many other divisions, it is not directly representative of Pelco's performance but, at least, indicative of broader weakness in security and building products.