London — The global market for video-surveillance equipment is set to grow by a 12 percent compound annual growth rate over the next five years to $23.6 billion, according to an IHS study released Wednesday.
The market research firm said global video-security sales reached an estimated $15 billion by the end of 2014, up from $13.5 billion in 2013. “The year 2014 has been one of the most interesting—and disruptive—in recent memory for both the professional and consumer video-surveillance industries,” said Jon Cropley, IHS video surveillance principal analyst. “A sharp decline in the cost of semiconductor components has ushered in a new era of price competition and the competitive landscape has shifted, with merger-and-acquisition activity affecting some of the leading global product and software vendors.”
IHS said the market can withstand the fragmentation and overall revenue growth for a number of reasons, including brand recognition, subtle differences in end-user requirements among geographical locations, and the continued differentiation of products.
Equipment vendors, distributors and integrators must rely on differentiation to drive the market over the next couple of years.
This trend represents the first of 10 that IHS has predicted for the video-surveillance industry in 2015.
Other market trends include:
- High-def closed-circuit televisions (HD CCTV) camera shipments grew from 1 million to more than 4 million in 2014. Led by the composite video interface (CVI), analog high-definition (AHD) and transport video interface (TVI), 2015 will see the analog portion of the market far outsell digital, serial digital interface (SDI)-type solutions;
- Fierce price competition and small incremental product upgrades are expected throughout the year.
- H.265 was one of the most popular topics at the Security China Show held in Beijing in October 2014, marking a shift in cutting-edge video surveillance.
- China emerged in 2015 as a leading region in product development, instead of the market being driven primarily from European and North American research and development (R&D) centers.
The consumer and do-it-yourself (DIY) video-surveillance market, which comprises equipment sold through in-store or online retailers, was worth $953.4 million globally in 2013, IHS said. Small business as well as commercial end users accounted for 47 percent of the $953.4 million total in global consumer and DIY market revenue in 2013.
IHS expects to see more video-surveillance vendors in the professional—not consumer—category taking an interest in this market in 2015, in order to fill out the low end of their product offerings.
Video-surveillance equipment sold through distribution channels was estimated to account for 55 percent of global equipment revenue in 2013 and represent over 60 percent of European market revenue in the same year. Furthermore, these percentages are forecast to increase as integrators and installers take advantage of the benefits of purchasing equipment through distribution, according to IHS.
Meanwhile, trials of body-worn cameras as part of video-surveillance systems for law enforcement have been ongoing during 2014, but 2015 is expected to be the year that firm orders and long-term partnerships are made. Body-worn cameras are not just useful as part of an overall video-surveillance solution; they can also be part of a political solution in helping to promote faith in local law enforcement officers, IHS believes.
Embedded vision — the combination of embedded systems and computer vision — will have new implications in Advanced Driver Assistance Systems (ADAS) in the automotive industry, with innovations in ADAS filtering back into the video-surveillance industry.