Ten Predictions of Video Surveillance Market Development Trends in 2012

IMS Research forecasted the development trend of video surveillance in 2012. The forecasting report aims to provide some guidance for the development of video surveillance in all areas of market trends and opportunities.

1. Image quality is the focus of attention Over the past few years, high-definition and megapixel cameras have come to the sweet spot in the video surveillance industry. IMS Research predicts that by 2015, more than 70% of all network cameras will have megapixel resolution. In addition, a common consensus has emerged in the industry that HD resolution is sufficient for most security applications.

Despite this, manufacturers have continued to introduce more megapixel cameras in the past year. Arecont Vision and Avigilon have 20 megapixel cameras in their portfolio, Dallmeier released a 2 megapixel camera, ipConfigure launched the world’s first billion megapixel (technically 2 megapixel) wide-angle monitor Camera.

This trend has caused widespread misunderstanding. The bigger the pixel is, the bigger the resolution is, the better the image quality is. However, image quality does not depend only on the pixels of the sensor, and the lens and image processing are also key factors. So, will manufacturers continue this trend in 2012 with higher-pixel cameras?

Of course, some manufacturers will not stop developing higher-megapixel cameras. For example, Dallmeier plans to upgrade its 2-megapixel camera to 6 million pixels. However, IMS Research believes that the vast majority of manufacturers in 2012 will have new focus on image quality.

This all comes from demand. For most video surveillance applications, there is a limit to the required image detail. Typically, it is necessary to be able to distinguish facial features or clearly identify the license plate. In addition to wide-angle surveillance (eg borders, stadiums, etc.), it is often not necessary to use cameras with higher resolution than normal HD. So far, the market for "higher" megapixel cameras is still relatively small.

As the number of high-definition cameras in the market continues to increase, manufacturers need to further develop product selling points based on the market, such as low illumination capability and wide dynamic range. However, we will also see that manufacturers will increasingly use P-Iris (accurate aperture) lens technology to improve real-time video quality.

2. The stable development of the BRIC market, the six countries of the psychic economy become emerging potential markets The euro zone crisis may dampen the growth of the global economy in 2012. So, what are the development opportunities for video surveillance vendors in the coming year?

In the past few years, the BRIC countries (Brazil, Russia, India and China) are the countries of choice for video surveillance vendors seeking new growth opportunities. Unlike the European, Middle East, Africa, and North America markets where video surveillance equipment is more developed, the four BRIC economies are less affected by the recent economic downturn. In 2010, the total market for video surveillance equipment in the BRIC countries exceeded US$2.5 billion. IMS Research estimates that with more than 20% growth over the next two years, the BRIC countries will continue to provide video surveillance providers with robust growth opportunities.

So apart from the BRIC countries, where should companies seek new growth opportunities? Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa, namely the six countries of the cat, these six emerging potential markets are seen as the emerging market and investment focus. Compared with the BRIC countries, the current investment in video surveillance equipment by the six countries of the cat is still insignificant. However, in the medium to long-term, with the development of infrastructure and the increase of social mobility, the six countries of the civet cat will provide a good opportunity for video surveillance manufacturers. From a wide-ranging economic perspective, political instability and terrorism are currently the major problems that hinder foreign investors from investing in the six countries in the Philippines. Although this may affect the development of many industries, the security industry has always benefited from the threat of social turmoil and terrorism.

In the size of the video surveillance market, the six countries of the Spirit Cat will not surpass the BRIC countries in many years. However, IMS Research believes that in 2012, manufacturers will begin to explore the long-term growth potential of the six countries of the Lynx.

3. Coaxial cable promotes changes in HD surveillance In the "2011 Trends" released last year, IMS Research released a short article ("HDcctv Joins the 2011 Market Fight"), which specifically introduces the HDcctv Alliance certified products into and out of Into the video surveillance market. The article concludes that HDcctv Alliance certified products will not affect the use of network video surveillance equipment in the short term, but we have also noticed that this new transmission technology has great potential.

Now that the year has passed, the market situation proves that IMS Research's forecast is correct. Although the HDcctv Alliance certified products have continued to receive market recognition, sales throughout the year have been slower.

The product category now used for video transmission has increased. In addition to the HDcctv Alliance certified products, there are HD-SDI and Coaxial Cable Security Link (SLOC) products on the market (represented by Sony's IP coaxial cable in the market), and can also be used in existing (or new) simulations. Transfer high-definition images on the infrastructure. Readers should note that the main difference between HDcctv Alliance/HD-SDI products and SLOC products lies in the transmission. IMS Research studies all these different types of products as high-definition coaxial cable devices.

In the 2011 show, many manufacturers have introduced the concept of HD-SDI. At the 2011 CPSE Anbo, many video surveillance vendors brought HD-SDI cameras in 2011.

Looking into the future, the concept and market potential of coaxial cable are basically sound. There is a large number of analog video surveillance equipment and infrastructure on the market, and there is a strong demand for high-definition video. Having said that, the market for coaxial cable equipment in 2011 was relatively small, which was related to factors such as storage, price, transmission distance, training, and compatibility.

Then, what key changes will happen next year. Can it bring a platform for expanding the market of coaxial cable (only focusing on HD-SDI) equipment?

1. standardization. For the penetration of coaxial cable into the existing analog market, the compatibility issues of various suppliers or brand products must be resolved. Currently, there is no standard in HD-SDI video surveillance equipment other than the HDcctv Alliance certified equipment.

2. Storage costs. HD-SDI cameras transmit uncompressed high-definition video, which can result in increased storage requirements and costs. For HD-SDI to break the mainstream purchase market for analog devices, storage costs must come down. The cost of hard drives, especially considering the current situation in Thailand, has affected storage costs and hardware compression costs. The supply of coaxial cable compression is actually an oligopolistic market, or the niche market, and other manufacturers are not yet suitable to enter the melee.

3. Market education. Manufacturers need to conduct proper market segmentation and promote coaxial cable as a potential alternative to analog or network video surveillance solutions.

So what are our expectations for 2012? IMS Research predicts that manufacturers will continue to promote coaxial cable equipment to end users to increase availability and selectivity. With the support of large manufacturers, such as Sony and Samsung Tyco, in 2012 there may be more and more large-scale video surveillance brands will begin to introduce some form of coaxial cable products in their product portfolio. As predicted last year, we do not believe that the demand for coaxial cable equipment in the market will increase sharply in 2012. However, IMS Research predicts that as more and more manufacturers begin to promote this technology, the growth of the coaxial cable market is strong and the market size will almost double.

4. Powerful Processors Drive Video Analytics Development Video Content Analysis (VCA) software can run on standard computers or embedded video surveillance devices such as web cameras and encoders. In a server-based solution, analysis is usually sent over the network with centralized video streams. In the embedded solution, VCA software is installed in the digital signal processor (DSP) or the embedded processor, and these processors are installed on the video monitoring equipment at the factory. In some cases, the software is loaded directly into the video surveillance device as a plug-in. Embedded solutions are often referred to as "edge analysis" because they can analyze the video before sending it over the network.

Server-based solutions provide more processing power. For this reason, processor-intensive applications such as facial recognition are usually server-based, and edge-based solutions are limited to simple applications such as people counting. Under normal circumstances, the main processor's processing power is mostly used for system control and image processing tasks, and the remaining limited processing power resources are used by the VCA. In fact, a dedicated analysis processor can be added, but this increases the material cost and makes the equipment's price uncompetitive. However, IMS Research predicts that this type of application will increase over the next few years by executing VCA on the device's main processor. This mainly depends on the processor's more powerful effectiveness.

Thanks to their powerful and affordable processors, which are widely favored by video surveillance vendors, they will increasingly add VCAs to their devices. Basic analysis will become the standard function of the equipment, and more advanced analysis will be provided "paid". Over time, more and more analytics software will be added to standard functions, and customers will not have to pay extra. In addition, a more powerful processor will allow multiple VCA algorithms to execute simultaneously, such as loitering object tracking, to improve detection capabilities.

As Moore's Law states, the capabilities of processors will become more and more powerful. VCA has been increasingly used in various industries, such as driving assistance cameras and interactive game console peripherals in automobiles (such as Microsoft's Kinect). The potential of these new markets for VCA is huge and attracts the attention of chip manufacturers. In the next few years, manufacturers are likely to develop powerful processors to optimize the application of VCA. For the security industry, this will inevitably mean that more edge analysis will emerge.

5. Mergers and acquisitions in the video surveillance industry will continue in 2012 Despite the unstable economic situation, mergers and acquisitions in the security industry have continued in the past few years. However, the acquisition of video surveillance has not been at the forefront of these transactions.

The remote monitoring market has made considerable deals. For example, Tyco International acquired Broadview Security for $1.9 billion in 2010. In the same year, Protection One was acquired by private equity firm GTCR, and Monitronics was acquired by Ascent Media Corporation with a transaction value of US$1.2 billion. In 2010, three-fifths of the large-scale monitoring companies in the North American market were merged.

Similarly, in the system integration market, mergers between large companies are also very active. The recent acquisition of Niscayah by Stanley Black & Decker merged two top ten suppliers in the US market (in terms of turnover). According to Stanley News, the transaction was worth US$1.2 billion and was completed in September 2011. Another cause for concern is Safran's acquisition of L-1 Identity Solutions (worth $1.99 billion).

However, the video surveillance market has not really seen a similar-sized deal. In general, the size of M&A in the video surveillance market is much smaller. Recently, March Networks announced that it had been acquired by Infinova Corporation and was valued at approximately US$90 million. Other major M&A activities include DVTel's acquisition of ioimage, a video surveillance maker, in 2010, and Matsushita and Samsung jointly creating a unified video analytics business.

The recent large-scale M&A was the acquisition of General Electric (GE) security by UTC Fire & Security in 2010. GE is the top ten supplier of the video surveillance market in 2009. However, it is doubtful whether the video surveillance business will be the main driver in this merger with a company that combines fire safety products with its main product portfolio. Therefore, you need to look back at the case of Schneider Electric's acquisition of Pelco, the top ten video surveillance provider in 2007.

At a glance, these figures indicate that the video surveillance industry will be the main candidate for M&A activity in 2012. IMS Research's annual report on the global CCTV and video surveillance equipment market in 2010 is expected to have a market value of more than US$9 billion. However, the top 15 video surveillance equipment suppliers only account for about 40% of sales. In addition, despite the uncertain economic situation, the video surveillance industry continues to maintain strong growth momentum. IMS Research predicts that despite the uncertainties in the euro area in 2012, sales of network video surveillance equipment will exceed 25%. Although IMS does not believe that 2012 will see billions of dollars in hypervisors in the video surveillance industry, larger-scale medium-sized deals are likely to be completed in the coming year.

6. Cloud Video Surveillance Vigorously Developed In 2011, sales of cloud-based video surveillance services (VSaaS) grew significantly. Overall, the market has grown by about 20-30%. However, this market is still emerging, evolving and changing. IMS Research believes that VSAaS will have great development in the coming year.

Cloud video content analysis can enhance VSAaS functionality. By running cloud analytics, users can enjoy the power of virtualization. It is common to use such clouds as infrastructure services (IaaS) in other industries, such as Apple's voice control software Siri and Amazon's Silk browser. IaaS opens up different types of business models for analytic software vendors. In addition to charging on each channel, the supplier can charge for analysis services, such as report generation. Retailers pay a certain amount of fees each year to suppliers, and they can receive reports on store indicators every month, such as the number of customers per day and the average queue length.

Another potential application of VSaaS is video analysis by people. Video from the camera can be sent to the cloud for monitoring. This monitoring process can be operated privately, and operators (whether trained or public) watch video recognition or take the right measures. For example, this type of monitoring can be performed anywhere in the world and is more accurate and more effective than some systems based on software analysis. As for the monitoring of the source population, this involves videos of the public in public places, and it is necessary for the responsible persons to monitor and identify unusual or illegal behaviors. Although this application involves privacy issues in some countries, a few vendors have begun to provide solutions. For example, Internet Eyes, a British company, provides an online monitoring solution that can provide on-site monitoring of commercial purposes for registered members of a company, and informs users when observing crimes.

Whether or not these VSaaS applications can take a place in the market, one thing is for sure; VSaaS will continue to provide opportunities for solution providers looking for new applications for video surveillance. VSaaS costs more but provides "real" benefits for the solution. VsaaS will fuel the growth of this emerging market in 2012.

7. The flooding in Thailand has significantly affected HDD prices and the average price of hard disk drives (HDDs) has dropped continuously for more than two decades. Now faced with the recent floods in Thailand, video surveillance storage industry is likely to be changed by this factor.

Many of the world’s largest HDD manufacturers and HDD component suppliers have production facilities in Thailand. For example, nearly 60% of Western Digital’s products are produced in Thailand; the fourth largest hard disk manufacturer, Toshiba, produces half of its hard drives in Thailand. Each hard disk production supplier is affected differently. The official forecast price will rise from 0 to 180%. Although the credibility of outliers in this range is debatable, it is clear that there will be a shortage of hard disk production in the video surveillance market. The determinants of this effect size will be determined by the size and type of storage providers in the market.

Small storage companies may be seriously affected. For them, this means that the price will be at the highest and the supply will face the worst shortage. Vendors who rely entirely on Thailand's hard disk vendors will compete to find other different resource supplies, and it is difficult to guarantee the security of products from different sources. These small storage vendors may find it difficult to maintain production and may increase their customers' purchase costs by increasing the storage system price.

The impact on medium-sized manufacturers will be mixed. Suppliers who have already taken action to protect the HDD supply chain as soon as possible may only feel that HDD suppliers that affect them should choose to raise prices. Storage suppliers may recognize price increases in the short term, which of course depends on the price increase. If the price of HDD increases significantly, a very likely outcome is that the historical trend of depreciation in the storage system will be flat, and the price per TB will be stable.

The huge storage market is most likely not to be significantly affected. In fact, these suppliers may benefit from the shortage of HHD supply. This is because the HDD supply of big manufacturers will be guaranteed. The purchasing power of large manufacturers is strong. With the support of the global supply chain, they have the largest shelter for HDD prices, and their storage system's price per TB is the highest. It is possible to remain relatively stable.

In 2012, the downward trend in storage prices will slow down. If hard disk drive production facilities continue to suffer, this will have a more pronounced effect on storage prices than expected, and it is also likely that storage prices will rise slightly in the short term. Once Thailand's hard disk production resumes, or the production of alternative production bases increases, the price of hard disks will continue to go down, and the price of each TB storage system will also drop. However, at present, the trend of disk low prices has temporarily stagnated.

8. Video management software hits the brand IMS Research predicts that the 2012 VMS (video management software) industry will hit a new wave of innovation because vendors are trying to evade the threat of commodity popularity.

The current market structure shows that while the upper tier of the market is dominated by VMS combinations provided by some of the larger and more mature VMS brands and security solution providers, the middle and lower tiers of the market are “free”.

For more mature VMS suppliers, if they want to maintain a long-term high growth rate, they need to complete two key points: (1) maintain and increase their market share in the market; (2) medium in the market And the lower level has developed. To meet these two goals, innovation is the primary motivator.

IMS Research believes that in 2012 VMS system providers will make innovations in the following areas:

User Interface - Although different VMS solutions contain unique features, the user interfaces are basically similar. Manufacturers should develop a simpler, more intuitive user interface.

Mobile applications - such as iOS and Android mobile platforms - will become the first choice for many VMS manufacturers. The mobile video surveillance application market is still relatively immature, which is the real demand of technology and market. The current generation of application features is usually limited to remote video viewing. In 2012, suppliers will work hard to improve the utility of these applications. Simple concepts, such as using positioning services to view video from the nearest camera on a mobile device, or setting video streams from multiple cameras via nearby mobile devices (such as when guards are patrolling), will help improve the user experience.

Situational awareness - The integration between access control and video surveillance systems has been implemented in the past few years, and this trend will continue in 2012. However, VMS system vendors will further develop their products on the professional VMS platform or security management platform. In the PSIM (Physics Security Information Management) software market, there is a clear and specific need for a platform for situational awareness (multiple related sensor inputs to generate an operational report and response) in a specific industry area. Despite the advantages of PSIM solutions, these solutions are costly to implement and far exceed many end users. Vendors of VMS have attempted to bridge the situational awareness of demand and supply gaps by adding PSIM-like functionality to their platforms (eg, enhanced visualization capabilities on Google or ESRI maps). IMS Research believes that this trend will accelerate in 2012.

9. Development of Video Compression Technology. 264 has become the de facto video surveillance system compression technology. However, in 2012, some factors may promote the emergence of more advanced video surveillance compression technologies. The three factors are:

1. Thailand flood. As mentioned above, flooding in Thailand has significantly affected the price and supply of HDDs. Although businesses are taking steps to resume production, the current situation is likely to continue until 2012.

2. Economic climate. The crisis in the euro zone on the horizon has not been immediately curbed. In 2012, the global economic climate will continue to be turbulent. Although the video surveillance market is expected to continue to grow in 2012, IMS Research believes that customers will increasingly look for greater cost-effectiveness. Video surveillance storage is a researchable area. Due to legal or other administrative factors, it is impossible for users to delete tampered video records on their own.

3. The growth of HD megapixel network cameras. Despite unfavorable economic conditions, the HD megapixel network camera market is expected to continue its strong growth. In 2012, shipments are expected to increase by more than 70% over last year. Although high-resolution cameras bring more benefits to users, such as clearer viewing of live video, the cost of storage will be high due to large video files. As a result, high-definition video and low storage costs place demands on more efficient video compression codecs.

Some other compression formats include:

H. 264 SVC - There are many different Hs on the market. The 264 variant, although Scalable Video Coding (SVC) has matured in other industries, is not common in the video surveillance industry. The main advantages of SVC variants include reduced bandwidth (thus reducing storage requirements) and dynamic resizing of video.

WebM - An open, free video compression format based on VP8. WebM and H. 264 who is even better is still to be controversial. However, for HTML5 video, an important standard in VSaaS applications, WebM is the best choice. However, the current WebM does not have a related real-time streaming protocol, which hinders WebM's advancement in the video surveillance industry.

High Efficiency Video Coding (HEVC) - HVEC is still under development and is considered an upgraded version of H. 264. The core goal of the new generation of video compression standards is in H. Based on the 264/AVC high profile, the compression efficiency is doubled. That is, under the premise of guaranteeing the same video image quality, the bit rate of the video stream is reduced by 50%. While increasing the compression efficiency, the encoding side can be allowed to increase the complexity appropriately. This new standard may come out in late 2012 or early 2013.

What will happen in 2012? In fairness, the video compression technology in the video surveillance industry has not achieved much. MPEG4, microwave, and JPEG2000 are still widely used, H. 264 is still sometimes referred to as "new technology." H. 264 SVC is essentially H. The extension of 264 is the most feasible alternative in the short term. It is expected that more support H will be introduced in 2012. 264 SVC video surveillance products. In the long term, HEVC may be H. 264 Most likely successors, but ultimately will depend on whether it has better performance and its applicability in video surveillance applications.

10. The Internet of Things continues to have an impact on the video surveillance industry In 2012, the Internet of Things (IOT) will not have a great impact on the video surveillance market, but it will get more publicity and long-term development trends.

IOT refers to the identification and classification of individual objects in an Internet-like structure. Such objects must contain a tag, such as an RFID tag. Once classified, supply can more easily meet demand and waste will also decrease. IOT has received a lot of attention in China. The central government focuses its strategy on the development of seven emerging industries. It is expected that these industries will enjoy preferential policies in many aspects. The Next Generation Information Technology (NGIT) is one of these industries, and IOT is one of the most important parts of NGIT.

In the past 10 years, China has installed millions of video surveillance cameras. These cameras can provide an information source for IOTs to verify the classification of objects. The Internet of Things includes three levels: the perception layer, the network layer, and the application layer. Video surveillance cameras will provide information sources for the perception layer.

Whether IOT will bring new investment for security cameras remains to be verified. However, IOT's expected benefits will help prove public spending on video surveillance equipment. In the coming years, IOT will be an interesting topic in the video surveillance industry.