Weak Growth for Large IP Camera Manufacturers

By John Honovich, Published Aug 30, 2009, 08:00pm EDT

The two largest publicly traded IP camera manufacturers, Axis and Mobotix, have clearly demonstrated weak growth and a dramatic drop from just 1 year ago. This is an important signal for the rest of market.

In Q2 2009, Mobotix's growth was only 7%. In the first half of 2009, Axis video product sales dropped 8% (in local currency terms) compared to the first half of 2008.

Axis and Mobotix combined represent about 40% of the IP camera market. As such, 40% of the market is flat to up only 5% for the first half of 2009. Contrast this to the first half of 2008, when the two companies had revenue growth of about 40% - a staggering drop from hypergrowth to treading water.

While Panasonic, Bosch and Sony do not publicly disclose their IP camera sales volumes, it is reasonable to assume that these 3 companies have had similar drops in sales to Axis and Mobotix. If anything Axis and Mobotix tend to be stronger, more focused competitors in IP cameras than Panasonic, Bosch and Sony.

Panasonic, Bosch and Sony are large IP camera manufacturers (2,3,5 and 7 on the IMS 2007 sales ranking - Pansonic is split into 2 divisions). These 3 companies likely represent another 20-25% of the market.

It is likely that 2/3rds of the IP camera market is flat to growing only about 5% - 10%. Even if the smaller companies are growing quickly and new entrants are entering the market, it is almost mathematically impossible for the IP camera market to be growing more than 15% (because even if the $10 M USD IP camera companies are doubling in growth, it does very little to offset the $250 M USD IP camera companies who are flat).

[Update: IP camera growth was robut in 2010 and 2011 - 35%+. However, in 2012, growth rates started to decline primarily driven by poor economic conditions in Europe.]

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