ADI W Box Accelerates Race To the Bottom

By John Honovich, Published May 22, 2015, 12:00am EDT

ADI is aggressively ramping up promotion for its new white label brand "W Box Technologies", essentially delivering Alibaba pricing to local ADI branch shelves.

Inside this note, we examine W Box, its emerging IP / MP / NVR offerings, how it is being positioned it and how it will accelerate the race to the bottom.

[UPDATE: See ADI's W Box Test Results]

W Box Overview

W Box [link no longer available] is ADI's new private label / house brand. The website domain was created in 2014 and is owned by ADI's parent, Honeywell (see their WhoIs record [link no longer available]).

W Box focuses on lower-end, commodity products but includes a 5-year warranty [link no longer available] on video surveillance devices and, of course, direct purchasing / pick up from ADI.

Over the last few months, ADI has increased the marketing for W Box, with an e-mail blast this week touting Chinese spam email pricing for analog cameras, as shown below:

W Box IP / MP / NVR

While this week's promotion and the W Box website only shows SD analog products, ADI's website is showing W Box IP MP cameras and NVR, e.g.:

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The pricing of these devices are similar to the low-cost comparable Hikvision and Hikvision / Dahua OEM devices in the $100 camera range and the $200 - $800 NVR range. Indeed, W Box IP pricing is similar to Honeywell's new CVI HD analog pricing.

W Box vs Honeywell

Since ADI is owned by Honeywell, ADI can always sell / prefer Honeywell. However, since Honeywell perceives itself as a high-end offering, it is riskier to cut prices on that brand.

Enter W Box, where ADI can push through super low pricing.

Competing Against the Low-End

Clearly, ADI is being impacted by the proliferation of both low-cost cameras and the ability to purchase such cameras online. It risks further deterioration of its core business unless it can respond to those threats.

W Box lets its cut prices even further, allowing it to better price match the growing low-cost camera market plus beat online sellers with ADI's traditional strength in local sales, stocking and servicing.

Vicious Cycle

Unfortunately, this is accelerating a vicious cycle. ADI is not 'high-end' but it certainly is a lot higher and more established than buying from unknown Alibaba vendors, spam emails or random online stores. As the impact of $100 MP cameras becomes more pronounced and as more buyers choose them, ADI's W Box move shows how the race to the bottom is moving upmarket.

And as ADI ramps up its sales efforts and shelving of W Box in stores, this will hurt budget manufacturers who cannot differentiate themselves. In the long run, this is good for the market as it forces real manufacturers to innovate but, in the meantime, it shows how much tougher the video surveillance market is getting in 2015.

[UPDATE: See ADI's W Box Test Results]

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