As IP-Based Video Soars, Manufacturers Ask How High

With the Internet protocol (IP)-based video market expansion now at breakneck speed, the obvious question facing video manufacturers is how long will the current IP trend continue? That central question is forcing companies to deliberate over how much to invest in IP technology and strategize which market segments to target for penetration.

Manufacturers say that 20 percent of the video market’s cameras sold in 2006 were IP cameras, which means that 80 percent were of the analog variety.

Since the IP market is still getting underway, does this mean the analog camera market will evaporate entirely, much like the analog recorder market? A similar demise could come to pass, but it’s not likely from today’s standpoint. IP cameras remain priced well above analog models, and small end users are not always all that interested in networking.

Will IP camera prices ever decline to analog levels? That, too, is not likely, although largely because of technological reasons, opposed to market machinations.

Advanced Tools… at What Price?

An IP camera can be equipped with whatever digital functionality a manufacturer believes the marketplace desires and at what price it is willing to pay. Accordingly, technology investments are now being made to produce on-board analytics and eventually for on-board memory as well. Add this to motion detection and high definition (HD), and this single surveillance package is something many users will look toward to solve their control challenges.

What will advanced cameras of this type have to command in market pricing? And of the 40 user segments that currently make up the video market, how many will want advanced camera technology — especially at a price that could be more than three times that of an analog camera?

Gauging the Market Trajectory

Another trend bearing on the longevity of the IP growth cycle relates to systems integration. The integrated systems market has its own segments. The basic one is the upgrading of standalone video into an interfaced video and access control system.

The next step up is the integration of a physical security network with the logical security network and IT spine of the enterprise. These are referred to as enterprise and convergent systems, which also provide the basis for larger building management systems. IP systems are naturals in these applications, so forward- looking growth in this convergent market is exceptionally strong.

Lastly, the great bogeyman question regarding the future of IP systems is the fact that these little video computers represent an inviting morsel for large IT companies like Cisco, IBM and HP.

So while the basic question concerns the extent of analog camera market penetration by IP models, another question is who the suppliers are going to be that most enjoy the fruits of that trend. Video manufacturers currently see IP cameras taking over a little more than 60 percent of the total worldwide camera market by 2011 (see diagram).

Is their projection correct? We’ll have to wait and see, but those who say the analog camera market will disappear anytime soon will have to make a stronger case.

Joe Freeman is founder and president of J.P. Freeman Co., a company widely known for its security market reports and business consulting since 1983. In 1995, he founded J.P. Freeman Laboratories LLC, which provides technical services to clients worldwide. He can be reached via e-mail at

If you enjoyed this article and want to receive more valuable industry content like this, click here to sign up for our FREE digital newsletters!

Security Is Our Business, Too

For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add sales to your bottom line.

A free subscription to the #1 resource for the residential and commercial security industry will prove to be invaluable. Subscribe today!

Subscribe Today!

Get Our Newsletters