Report: Despite Economic Uncertainty, Outlook for Video Surveillance Market Remains Strong
While the worst of the first global recession has subsided, another, potentially larger and deeper downturn looms on the horizon. Despite this fairly terrifying specter, IMS Research remains confident that demand for CCTV and video surveillance equipment will remain strong through 2012 -- growth for network video surveillance equipment sales is forecast to exceed 25 percent.
Looking back at what happened during the last global recession, despite the economic turbulence, the global CCTV and video surveillance equipment market continued to grow throughout the downturn. In a previous press release (The Tipping Point Approaches -- July 2011), Senior Analyst Gary Wong stated, “The world market for video surveillance equipment continued to achieve strong growth in 2010, in excess of 10 percent, despite the persistent after-effects of the global economic downturn."
Wong also noted that “While the global analog market was relatively depressed in 2010, the network video surveillance market continued to grow almost three times as fast as the total market in 2010, more than 30 percent.”
So why did the video surveillance industry continue to grow while many other industries suffered greatly during the first downturn? Well, the answer is, unfortunately, not a simple one and is due to the combination of a multitude of different factors split by vertical and geographic markets. However, there are two overriding themes.
The first is that despite economic turmoil, security (and video surveillance) does not become less relevant. The fear of terrorism and crime, an increasing focus on return on investment and government stimulus spending saw video surveillance equipment sales continue to grow in 2010 and 2011.
Secondly, while the last economic downturn did impact all countries, it did not impact all countries equally. As a result, the technology transition from low value analog video surveillance equipment to higher value network video surveillance equipment continued during the downturn and bolstered total video surveillance sales.
Throughout 2011 this trend continues to hold, with analog equipment sales remaining muted and network equipment sales continuing to flourish. Two examples include: Axis Communications announcing that, between January and September 2011, net sales had increased by 37 percent in local currencies and Mobotix announcing that it had closed its 2010/2011 financial year (Jul 2010 to June 2011) with 36 percent sales growth on the previous year. These growth rates are particularly impressive as both companies are well established and should serve as a positive indicator regarding the overall health of the market.
“The global video surveillance equipment market is forecast to continue to grow through 2012, spearheaded by sustained strong demand for network video surveillance equipment in the BRIC markets,” Wong said.
While the ongoing Eurozone crisis threatens to plunge much of the world back into another, and potentially deeper, recession, the BRIC countries continue to remain relatively unaffected.
IMS Research forecasts that network video surveillance sales in the BRIC markets are forecast to grow in excess of 30 percent in 2012.
Wong also notes, “Some market players may be better placed than others to deal with a potential second recession. Vendors that have focused heavily on regional diversification, investing in developing brand presence and sales infrastructure in emerging markets, should prove to be more resilient to a Eurozone meltdown.”
While the business environment for video surveillance equipment vendors will undoubtedly become difficult in the coming year, the underling factors guiding why people buy video surveillance equipment should continue to see video surveillance equipment sales show steady growth; sales of network video surveillance equipment will shape the growth of the total market.