Vicon's Troubles Continue

For the 3rd straight year, Vicon's revenue continues to drop, showing little signs of a turn-around. In December 2010, Vicon announced results for calendar Q3 2010 (fiscal Q4 2010). Those results show continued significant declines in both sales and gross margins.

In 2007, Vicon revenue peaked at nearly $70 Million USD. Now, for the just completed 2010 fiscal year, revenue is under $50 Million USD.

In the most recent quarter, revenue decreased 14% year over year. While US domestic sales were only down 2%, foreign sales were down 31%. Additionally gross margins dropped nearly 4 points, from 46.3% down to 42.6%.

Vicon cited 'weak economies', 'heightened competition' and 'unfavorable exchange rates' as key drivers of the results.

Going forward, Vicon cited enhancements to its VMS/PSIM offering and a "new line of mega pixel robotic dome cameras."

Vicon's focus on core IP video offerings makes sense given the relative growth rates of IP vs analog offerings. It will remain to be seen how well Vicon can execute and differentiate itself against the dozens of entrants that have emerge in the past 5 years who have marginalized traditional leaders such as Vicon and DM.

Vicon's revenue declines are part of a pattern of struggles for incumbent analog manufacturers. Compare to financial results from Dedicated Micros and HiTron.