THE VIDEO SURVEILLANCE MARKET CONTINUES TO GROW, BUT SO DO THE PRICES

VIDEO SURVEILLANCE IS A KEY ELEMENT IN SECURITY. SO HOW HAS THE VIDEO SURVEILLANCE MARKET FARED RECENTLY, AND HOW IS IT EXPECTED TO PERFORM IN THE YEARS TO COME? ASMAG.COM SPOKE WITH JOSH WOODHOUSE, LEAD ANALYST AND FOUNDER, AND JON CROPLEY, PRINCIPAL ANALYST, OF NOVARA INSIGHTS, WHICH RECENTLY RELEASED A VIDEO SURVEILLANCE MARKET REPORT.

n By: William Pao, Senior Reporter, asmag.com

According to the report, “The world market for video surveillance hardware and software,” the global video surveillance market grew by 16.4 percent in 2021. An easing of restrictions on movement and efforts to meet pent-up demand post-COVID were cited as some of the key growth drivers. Indeed, amid project resumptions and construction booms in various parts of the world, a continuation of growth in the video surveillance market is all but expected.

However, the report cited the global average price of a network camera increased by over 7 percent last year, making 2021 the first year in which the global average price of a network camera increased rather than decreased. A main reason cited by the report was a shortage of components used for the production of video surveillance equipment, resulting in higher prices for those components; this then forced video surveillance equipment vendors who were unable to absorb such cost increases to raise the prices of their own equipment. Especially, vendors were faced with a shortage in semiconductors, which are the basis for image signal processors and SoCs that are key components in IP cameras.

“A shortage of semiconductors was particularly problematic. However, there were also shortages of resistors and materials such as some plastics and metals,” Woodhouse and Cropley said, adding that the CHIP Act recently signed into law in the United States may improve the chip shortage situation somewhat, but not anytime soon. “It is likely that the CHIP Act will lead to greater production of semiconductors in the U.S. in the longer term. However, it will take years for new production facilities to be built and for volumes to ramp up,” Woodhouse and Cropley said. According to both, general inflationary pressures will force vendors to increase prices yet further in 2022 and 2023. This, then, is expected to produce an impact in the video surveillance market. “SIs and end users will purchase fewer surveillance cameras than they would do if prices weren’t rising. This will mean that camera unit shipment growth will be lower in 2022 than it was in 2021. Growth will then be even lower in 2023 than it was in 2022,” Woodhouse and Cropley said. “The global average price of a network camera and an analog camera is forecast to fall again in 2024. However, a more prolonged period of high inflation presents a serious risk to this forecast.” As for next year, the report said the global video surveillance market for hardware and software is forecast to grow at 11.7 percent in 2022 and will be worth an estimated US$28.2 billion.

Technology-wise, a gradual trend to using the cloud for video surveillance also continued in 2021, particularly in the Americas region where the market for cloud video management software exceeded $150 million, the report said. Especially, the report found the United States has been quicker to adopt cloud for video surveillance than most other countries in the world. “A major factor is that it has many organizations with distributed sites, each with a small number of cameras. Furthermore, these organizations operate in a large country using a common language and a common set of rules on data residency, privacy etc. Bandwidth availability and cost have been more favorable than in some other countries too,” they said. n