The China Surveillance Skew

Author: John Honovich, Published on Jun 12, 2013

Many like to make decisions based on market statistics. It gives (misleading) comfort about what the right move is. For instance, if the market is X billion or growing at Y percent, then our plan for Z is right. Unfortunately, statistics are routinely misunderstood or misapplied. In the surveillance industry, perhaps the most critical distractor is the impact of the Chinese market. In this note, we examine statistics and projections, showing how decisions can be badly skewed based on global numbers.

China is obviously big and growing faster than the world average. The challenge is when those numbers are mixed with the entire world, it skews the perception of the market.

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Comments (4)

Manufactures in Western nations can penetrate the China and SEA markets. These are huge consumers also and an offering that is approached practically and makes sense to buy will find an audience.

Axis is growing 60% for the last 3 years. Exacq has more than doubled its top and bottom line in the last 18 months.

Yes, there is price competition but value, including support and training. is still the key. You may need to settle for only 10's of millions in sales but it is there to be had.

"Axis is growing 60% for the last 3 years. Exacq has more than doubled its top and bottom line in the last 18 months."

But... most of that growth for both companies (in percentage and total terms) is from the Americas and EMEA, very little from Asia.

John, what do you think would then be reasonable growth figures (e.g. next 4-5 years) for American, EMEA:n and Asian markets for Axis? They talk about maintaining an overall 20% growth rate for that period.

John – Our report on the Physical Security industry published this month would confirm that your message of almost 18 months ago on this issue has not changed a great deal.

China skews the shape and size of the world market for a number of reasons. The first is the massive public sector spend on Video Surveillance dominates the market and that protects indigenous manufacturers but still the penetration measured by sales per GDP is less than a third and as yet IP Networked systems make up a small fraction of this. This situation is about to rapidly change.

The Chinese government last year announced that they will invest in a massive research programme into the Internet of Things (IoT ). Part of that programme will include making Safe Cities Smart and that cannot be done without IP network cameras. Western IP technology will be required here, because winning in the IoT game will bring a colossal impetus to growth and prosperity of its economy and protecting the interests of local camera manufacturers is not going to get in the way.

Alllan McHale - memoori

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