Despite economic uncertainty, video surveillance outlook remains bright: IMS Research

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.

IMS Research senior analyst Gary Wong has previously said: “The world market for video surveillance equipment continued to achieve strong growth in 2010, in excess of 10%, despite the persistent after-effects of the global economic downturn.

“Whilst the global analogue 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, over 30%.”

Why continued growth?
So why did the video surveillance industry continue to grow whilst many other industries suffered greatly during the first downturn?

IMS says the answer is 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.

Not all countries equal
Secondly, IMS says, whilst the last economic downturn did impact all countries, it did not impact all countries equally.

As a result, the technology transition from low value analogue 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 analogue equipment sales remaining muted and network equipment sales continuing to flourish.

IMS points to two examples: Axis Communications announcing that, between January and September 2011, net sales had increased by 37% in local currencies; and Mobotix announcing that it had closed its 2010/2011 financial year (Jul 2010 to June 2011) with 36% 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, IMS believes.

Better placed
Looking forward to 2012, Wong said: “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.

“Whilst 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% in 2012.

“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.

“Whilst 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.”