Video Surveillance Market Size and Forecast Guide 2010By: John Honovich, Published on Dec 13, 2009
This guide references and analyzes publicly announced forecasts and sizing for the video surveillance market. It should provide extensive background for professionals seeking video surveillance statistics on cameras, video management systems, video analytics, storage and more. The report includes:
- Global Market Size
- Global Market Growth Forecasts 2009 - 2013
- 50 Largest Companies by Revenue, 2008
- Total Surveillance Camera Sales
- IP Camera Sales
- Megapixel Camera Sales
- DVR Sales
- IP Video Software Sales
- Video Analytic Sales
- Video Surveillance Software Sales
- PSIM Sales
- Home Market / Remote Monitoring Sales
- Investors and executives value statistics highly in making strategic decisions.
- Sizing and forecasting helps make decisions about new markets and products.
- Statistics can save companies from the time to conduct research and mistakes from insufficient knowledge.
- Researchers have access to many different companies and experts in the preparation of their statistics.
Problems With Market Statistics
- They are expensive (most reports are over $5,000 USD).
- Producing accurate sizing is difficult since most video surveillance companies are private, making it hard to validate numbers.
- Large manufacturers sponsor many reports raising questions over objectivity of the statistics.
- Researchers are generally industry outsiders who lack domain expertise and can fail to spot errors or lies from respondent
How to Use Statistics
Statistics can provide a high level overview of the market. However, they should be of secondary use for strategic decisions. Regardless of how big or fast the market is growing, the critical element is how strong your product or company is relative to competitive offerings and for meeting the needs of users. To that end, you must spend time learning and researching the market to understand where you truly stand.
Variances in Statistic Sizing
Some analysts use manufacturer selling price while others use end user pricing. This is a major and critical variance in examining and using sizing numbers.
For instance, take the sale on a single analog surveillance camera. The manufacturer may sell it for $150 to a distributor. An end user may pay an integrator $250 for the camera and another $150 to install the camera (depending on many installation factors). Does this camera count for $150 in revenue or $400 in revenue?
Some analysts, such as IMS, usually measure manufacturer revenue. In this example, the IMS would record $150. However, other analysts, such as ABI often measure end user revenue and would therefore record it as $400.
The total market size can differ by 2 to 3 times depending on whether the analyst is measuring manufacturer or end user pricing. One person can say the global surveillance camera market is $4 Billion and another $10 Billion. Both could be 'correct' presuming the former is alluding to manufacturer sales while the later is referring to end user sales.
In general, manufacturers should use only manufacturer revenue statistics while integrators should use end user statistics. When manufacturers use end user revenue statistics, they significantly over-state their addressable market.
In the last year, the global recession is forcing changes to historical forecasts. IMS has revised its video surveillance growth statistics toward twice from 10% to 6%, now down to 3% global growth. In October 2009, In-Stat claimed that video surveillance revenue growth was negative [link no longer available] (the market shrank) over the past year.
Last year, at the beginning of the economic crisis, we offered our own projections for IP Video specifically, projecting growth rates to drop from 30-40% in 2008 to 15% in 2009. In January 2009, SDM released a survey of US dealers, projecting a 7.8% drop in overall security spending.
In December 2009, IMS Research released preliminary statistics for the 2009 video surveillance market [link no longer available]. While they bill the results as evidence that video surveillance has defied the downturn, the results are significantly poorer than 1 year ago.
Key 2009 statistics:
- Global Video Surveillance market will increase by about 3%
- Global IP Video surveillance market will increase by about 15%
- Global analog video surveillance market will be flat (0% growth)
- Inferred from these statistics, IP video surveillance market share grew from 20% to about 23% between 2008 and 2009.
For recent market performance, review our analysis of over a dozen publicly traded companies results in the video surveillance market.
Recent Bullish Forecast for Global Video Surveillance Industry
A research firm has issued a forecast claiming that the global video surveillance market will double over the next 3 years [link no longer available]. Their forecast includes the entire market - both analog and IP video.
Specifically, they claim the current global market for video surveillance is $13 Billion USD and that it is "anticipated to grow at a CAGR of more than 27% during 2009-2012."
At that growth rate, the market would slightly more than double in a 3 year period.
This is extremely unlikely and far out of line from even the most aggressive forecasts (see ABI's numbers). Also, the firm producing these numbers, RNCOS, is rarely, if ever, cited by industry people.
I recommend you not use these numbers for any serious forecasting or planning.
These numbers tend to vary widely by research source and what categories they include. If you are looking for the biggest possible number to impress investors, than you should use the ABI report. ABI claims that the global video surveillance market (end user revenue) was $13.5 Billion USD in 2006, growing to $46 Billion USD in 2013 [link no longer available]. I am skeptical of this number and would not use it as the basis for internal strategic planning. By contrast, the Axis 2007 annual report, citing IMS, reports 2007 world CCTV revenue of approximately $7.25 Billion USD (manufacturer revenue).
For specific markets, analysts report that the 2007 video surveillance market in the US was about $2-3 Billion USD [link no longer available] while in China it was $4.1 Billion USD [link no longer available]. Note: I am skeptical that the Chinese market is larger than the US.
For a general ranking of large security companies that include video surveillance manufacturers, see ASMAG's Security 50 report that provides revenue and growth rates for many global and Asia/Pacific regional companies.
In ASMAG's Top 25 Asian Security manufacturers ranking [link no longer available], they note a number of fast growing Asian manufacturers. Specifically, HikVision grew 47.1% from $173.4 Million USD in 2007 to $255.1 Million USD in 2008 and Dahua grew 55.9% from $59.3 Million USD in 2007 to $92.5 Million USD in 2008.
Publicly Traded Video Surveillance Companies
Some of the best information comes from audited financial statements of video surveillance manufacturers. For in-depth analysis of these manufacturer, read our analysis of 2009 publicly traded video surveillance results. The following is a summary:
|Company||Annual Revenue||Growth Rate||Sector||Notes|
|ADT||Not Disclosed||-13.00%||Analog||Segment Information|
|Axis||$300,000,000||-11.00%||IP||Local Currency Terms|
|March Networks||$100,000,000||-14.00%||Analog / IP|
|NICE||$148,000,000||-10.20%||Analog / IP||All Security sales|
|Optelecom-nkf||$45,000,000||-10.00%||Analog / IP|
|Synectics / Quadnetics||$115,000,000||-10.80%||Analog / IP|
|Tyco Security||Not Disclosed||-12.00%||Analog||Segment Information|
|Vicon||$60,000,000||-9.00%||Analog / IP|
Top Manufacturer Rankings
2007 market share ranking of the top 10 in video surveillance equipment, cameras and network cameras companies are presented in Axis Q4 2008 financial presentation on pages 13-15. Those charts only list rank and not revenues.
For overall video surveillance equipment, Pelco is ranked 1st for 2007 revenue and Axis is ranked 6th. Axis 2007 revenue was approximately $200 M USD. Pelco's 2006 annual revenue was $506 M USD (announced during the 2007 Schneider acquisition of Pelco for $1.2 B USD).
A number of analysts have published estimates of the video surveillance camera market.
In 2006, iSuppli reports that global video surveillance camera revenue was $4.9 Billion USD. For North America alone, Frost reports that 2007 camera revenue was $1 Billion USD with approximately 5 million cameras sold.
As for IP/network cameras, Multimedia Intelligence reports that 2007 total revenue was $500 Million USD [link no longer available]. Frost forecasts that revenue from IP cameras will exceed analog cameras in 2013 but that it will not cross over in terms of units sold to 2020. Numerous analysts estimate the growth rate for IP/network cameras to average 30-40% over the next 5 years.
Megapixel camera growth has been estimated by IMS to be over 100% per year between 2009 - 2012. More recently, IMS notified me that 2009 revenue growth is forecasted at 65%. 2008 global sales ares estimated to be $150M USD and by 2012, IMS estimates megapixel will be 6% of total camera shipments.
Based on IMS reports, the 2008 global surveillance camera market was likely $3.5 - $4 Billion (manufacturer revenue including both analog and IP cameras). This is based on Axis's total 2008 sales of approximately 2008, their reported 33% shared of the IP market and IP's approximate 20% share of the global surveillance market (by revenue). Of the total 2008 market, about $750 Million was for IP cameras and $3.5 Billion was for analog cameras.
Megapixel Market Statistics Breakdown
In December 2009, Mobotix announced that it now has about 40% of the worldwide megapixel market (according to IMS study of 2008 revenue). While this is a significant percentage, it is down sharply from the previous year's study where Mobotix claimed an approximately 60% share of this market (in 2007 revenue). This is despite an approximate 25-30% growth in Mobotix's revenue between 2007 and 2008 (see annual revenue breakdown for Mobotix from 2006-2009).
Given that 2008 Mobotix's revenue is approximately $60 Million, this place the total 2008 megapixel market at about $150 Million. Since Mobotix's 2007 revenue was approximately $45 Million, this implies a doubling of the global market for megapixel cameras from about $75 Million in 2007.
With Mobotix going mainstream, it is almost inevitable that Mobotix's market share will shrink. This is simply because of the marketing power of the incumbent vendors (whether it is Axis, Bosch, Sony, etc.) who are rapidly expanding their megapixel camera lines. Moreover, Mobotix growth rate continues to decline with Q3 2009 revenue almost flat compared to a year ago. This will result in Mobotix's megapixel market share declining significantly again in 2009.
While megapixel revenue growth will clearly be substantial in 2009 (at least 50% but possibly over 100%), the growth will be more broadly distributed and harder to measure. In the past, simply adding up the revenue for a small number of companies (Mobotix, IQinVision, ArecontVision, Lumenera, etc.) provided a fairly good estimate of the overall market.
While it is almost certain that all the incumbent megapixel manufacturer's growth rate fell in 2009, this is likely be to offset by the growth of new entrants. Now, with literally 25 manufacturers (and growing) offering megapixel, determining the market size is going to be much harder. Nonetheless, our conversations with manufacturers indicate that megapixel is growing rapidly and for many manufacturers, hard to keep in stock (though still a small part of overall revenue for incumbent manufacturers).
IP Camera Forecasts
Forecasting of IP camera growth is one of the most critical and controversial elements of the video surveillance market. Many analysts, including JP Freeman, predicted that IP cameras would overtake analog by 2008. Even the more conservative analysts, such as IMS, were predicting that IP cameras would be 30% of total units shipped by 2010.
In July 2009, IMS confirmed a number of key statistics and forecasts on a discussion at IP Video Market Info. Various manufacturers contended that 2008 IP camera market share (by units) was only 5%. IMS responded that they calculate under 10% of total cameras sales in 2008 were IP cameras. Two major factors cited in lower sales than previously projected were (1) the Chinese market (IMS reports under 1% of total surveillance cameras shipped in China were IP) and (2) the recession / slowing global economy. In that discussion, IMS stated that they project analog cameras will still represent the majority of units sold globally in 2013.
Video Management Software Statistics
Within video management systems (DVRs, NVRs, IP video software, etc.), Multimedia Intelligence estimates 2007 global revenue to be $2 Billion USD [link no longer available]. Of that, they estimate that $1.2 Billion USD is still traditional embedded DVRs.
IMS reports that software only video management had 2007 revenues of $236.2 Million USD. Genetec reported 2006 revenue of $16 Million USD verified by Deloitte. Reports say that Genetec and Milestone revenue is very close. Additionally, Lensec reports 2007 revenue of $10 Million USD while Mirasys reports revenue of $11 Million USD.
VMS/DVR market statistics can be confusing because some sell software only, others sell appliances.
Press releases from VMS/NVR manufacturers on their claimed market shares and ranking can be confusing, especially since there are a number of different categories used. For instance, see Aimetis' August 2009 announcement of ranking 7th and Milestone's September 2009 announcement of ranking 1st [link no longer available]. They cite 3 different segments from IMS Research.
- Aimetis cites for the Americas only and for software only open platform VMS
- Milestone cites for the entire world for both open platform VMS and software only VMS (citing 25.8% share in open platform and 10% in software only)
Within software VMS systems, IMS has multiple categorizations. For instance, the software only VMS category is a subset of the open platform VMS category. Specifically, the software only VMS category does not include vendors who sell their own cameras (e.g., Verint, DvTel) while the broader category of open platform does (because Verint and DvTel support 3rd party devices in addition to their own).
Here is the official description from IMS:
"Open Platform Network Video Management Software
Products that support a variety of hardware (cameras and encoders/decoders) from multiple vendors and offer the ability for customised integration with other systems or devices using an open platform software development kit (SDK).
Software Only Vendors of Open Platform Network Video Management Software This category includes all products that support third-party software but that come from vendors who only sell software. For example,Milestone or Genetec."
While many people were surprised about Aimetis ranking 7th (myself included), these categorizations help clarify what this means. Aimetis is ranked 7th only in 1 region and only against other vendors who sell VMS software but not their own cameras (which means DvTel, Verint, March, AD, DM, etc. are all excluded from this ranking).
Furthermore, while Milestone is 'big' compared to other software-only platform systems (25.8% share), they are far smaller against all open systems (only 10%), implying that non open platform systems are about 150% larger than open platform systems. Of course, neither of these rankings compares Milestone to the far larger group of companies providing DVR/NVR appliances.
Many business people find these rankings to be extremely important so appreciating the segmentation is important to making the most sense out of them. Since all of these companies compete directly against each other, in my own analysis, I would be more inclined to use a grouping of all companies.
Video Analytics Statistics
Video analytics market size and forecasts is incredibly hard to determine. There are 3 issues professionals need to be aware of:
- Over the last 5 years, Video analytics' field performance has far underperformed expectations. This limited referrals and repeat business resulting in forecasts not being met. In my testing, the field performance issues are not over.
- Since video analytics are sometimes sold as software and other times embedded in cameras, recorders, etc., determining what to count as revenue is hard. For instance, IMS states [link no longer available] the "market for cameras and associated equipment with embedded video content analysis capability to exceed $3.4 Billion [USD] by 2010." This obviously does not mean ObjectVideo, Cernium etc. will generate $3.4 Billion but that camera companies like Axis, Bosch, Sony would be manufacturing cameras capable of doing analytics. Some mistake the categorization.
- IMS has decided to group video analytics into multiple categories such as low and high end analytics. The low end typically includes camera tampering and system health check while the high end is perimeter violation, virtual tripwires, etc. Because of this grouping, both Bosch [link no longer available] and ioimage [link no longer available] claim to be market leaders, with Bosch dominating the low end. You should be very careful understanding this distinction as low and high end analytics are very different products. Low end analytics are not strategically interesting and have been offered in DVRs since the beginning of the decade. For most professionals, only high end analytics are truly video analytics.
- Only "moderate growth" projected this year and next
- 30% annual growth rate by 2012-2013
- 2008 sales volume: 38,000 channels server based, 40,000 channels edge based (cameras, encoders)
- Government and Transportation about 50% of total video analytics market
IMS estimates business intelligence to be only 3% of the market for video analytics in 2008. That's a very small percentage of a very small market (video analytics are unlikely to generate more than a few hundred million in annual revenue, regardless of how it is categorized).
In the interview, IMS projects that business intelligent will grow to 7.1% of the video analytics market by 2013 and could be video analytics 'killer application.' IMS alludes to the lower impact of false alerts on business intelligence compared to security as a benefit/driver in business intelligence's favor.
Key applications of business intelligence cited are (1) people counting and (2) traffic pattern analysis.
The practical challenges for adopting these applications include:
- Limited product availability from mainstream vendors. Using business intelligence often requires adding a new product that may not be integrated into the existing system.
- Sophisticated traffic pattern analysis tends to come from non-security providers, requiring a complete new system to be bought (see BVI [link no longer available], Scopix, LightHaus Logix, VideoMining to name a few of the dozen small specialists in this segment).
- New cameras with special positioning are generally required. Existing surveillance cameras generally cannot be used for both surveillance monitoring and business intelligence analysis. This too increases the cost.
Video surveillance storage revenue is estimated by Frost at $1.5 Billion USD in 2007, growing on average of 12.3% per year for a projected $2.95 Billion USD in 2013. Separately reported by IMS, the market for external storage is projected to be over $750 Million USD in 2012 [link no longer available].
Storage estimation can be difficult as storage is generally bundled with video management systems (e.g., DVRs or NVRs). While NAS and SAN deployments for video surveillance are increasing, the overwhelming majority of storage for video surveillance is from hard drives internal to DVRs and NVRs.
Storage projections depend on a number of factors that are difficult to determine:
- The rise of megapixel cameras: While clearly megapixel cameras will rise, how quickly and what resolution levels is a hard question to determine.
- The use of H.264 could significantly reduce storage needs but the timing and availability for H.264 multi-megapixel cameras is not determined.
- Video analytics can significantly reduce storage costs. How widely they will be used is a difficult question to answer.
In December 2009, market research firm In-Stat released a forecast for the semiconductor market for video surveillance applications [link no longer available].
Key items include:
- Overall semiconductor revenue flat between 2009 and 2013. Unit shipments will grow but selling price will decline.
- Semiconductor revenue in IP cameras will surpass $300 Million in revenue in 2012.
- Sensor revenue for all video surveillance cameras will decline from "over $700 million in 2008 to $435 million in 2013." No explanation is provided.
- 52% respondents report budget cuts
- Average general budget reduction of 5%
- Average Capital projects / equipment decrease was 11%
- [Note: averages above were calculated by weighing statistics from the increasing and decreasing charts in the executive summary]
- Video was one of the two most common tactics to increase security with decreasing budgets
- In 2009, 70% of security managers agree that the security leader's role is viewed as strategic and permanent. This is up from 14% in 2004. However, the article does not explain the reason for this increase.
- 50% of organizations use no formal financial methodology for security budgeting. I am not surprised and suspect this number is even higher as respondents may want to give an answer that sounds better. Also, this question was offered as multiple choice so the accuracy is questionable.
- 54% of organizations do not use a formal enterprise management risk program. That's a high number but one that I am not surprised at. This is probably even higher for smaller organizations.
- Security integrators are small: average size is only 30 employees
- Security integrators are poor: service and installation technicians make less than $50,000 USD annual
- Security integrators are happy: 54% are very satisfied with their job
- Median annual revenue is only $3 Million USD for security integrators
- 34% have laid off employees in the last year due to the recession
- Gross profit margins on video surveillance projects are 32-34% though this dropped 6% from the previous years
- Average numbers of cameras per installation is 17
- Average price per video surveillance job is $19,930
- Estimates only $66M USD was spent last year on video surveillance (seems too small though?)
- Guards only cost $50 USD per month so guard replacement is not a big value driver (plus 1 year of guard service is cheaper than buying a megapixel camera)
- Central monitoring services are a disaster because "Indians want it free"
- Consultants are critical, relationship building more important than brand building -- "he's excited when you do something for him" trip to the US, etc.
- Lot of money being spent on infrastructure , 'almost all cities going to city surveillance'
The Security Industry Association has released a market sizing report for Latin America. The report provides breakdown by product category and country but does not provide forecast for future growth. Additionally, the report evidently does not include Brazil, the country with the region's highest total GDP. This is a significant omission and should be factored in when considering any of their numbers.
The Executive Summary [link no longer available] lists a number of key findings:
- The total market size for electronic physical security systems in 2008 is $704 Million USD.
- The video surveillance market size in 2008 is $263 Million USD. Video surveillance is the largest segment, accounting for 37% of all electronic physical security system sales.
- The report finds that lower cost Asian products are selling well in Latin America.
- The report finds that 'packaged' solutions from a single manufacturer is generally preferred. Such preference is consistent with a focus on lower cost at the expense of lower extensibility and interoperability.
Home Market/Remote Monitoring Statistics
This report shall be updated periodically with new references so that industry professionals may quickly find the key statistics they need. Please post comments if you would like additional information or clarification.