IMS: Analog video surveillance still dominant in consumer market

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Monday, January 14, 2013

Analog security cameras continue to dominate the consumer and do-it-yourself video surveillance market, accounting for 87 percent of shipments, according to a new report from IMS Research. And analog is expected to stay strong in that segment, with a significant revenue shift to network products unlikely in the next five years.

While a strong transition to network equipment is occurring in the professional market, the IMS report said the consumer market would remain solidly analog through 2017 for two main reasons:
—Consumer network cameras are typically twice as expensive as analog cameras, and the market is very price-sensitive.
—Many major suppliers in the consumer market are primarily focused on analog equipment and have comparatively small ranges of network products.

Josh Woodhouse, an IMS market analyst and author of the report, said education also plays a role when it comes to determining which cameras to choose.

“Many consumers do not understand the difference between analog and network equipment,” he told Security Systems News. “Often the functionality appears similar. For example, both consumer analog and network systems can offer wireless connectivity and remote viewing, but achieve them in different ways. Additional benefits that network equipment can offer are often not applicable or are lost on consumers.”

The consumer and DIY equipment covered in the IMS report is sold online or in retail stores, Woodhouse said. The majority of the analog equipment is sold bundled, with multiple cameras and a DVR, while consumer network security cameras are often sold individually.

“These network cameras appeal to a different type of end user, typically a more tech-savvy residential user who requires a small number of cameras for monitoring,” he said. “The functionality to integrate network security cameras into an end user’s own network, often wirelessly, and view video streams on their TV, smartphone or tablet is a key selling feature.”

The IMS report said that despite the difficult retail climate, the consumer market for video surveillance has continued to perform well, with double-digit growth forecast for both analog and network product categories. The majority of revenue in the sector is being generated in North America, Woodhouse said.

“The more security-conscious mindset, particularly in the U.S., means that proportionally the penetration rates of video surveillance equipment into residential dwellings is higher in North America than in other geographic regions,” he said. “The North American retail market for video surveillance equipment is also more developed than in other regions.”

Woodhouse said many retailers stocking video surveillance equipment realize it is a growing category that has not reached saturation.

“The faster growth [overall] seen in network equipment has not cannibalized sales of analog equipment—there is still organic growth in both product lines,” he said. “For standard multiple camera installations, analog offers a cheaper solution complete with many of the functions available from network equipment. Analog bundles will remain fit for purpose for many consumers in the future.”