Industry analysts have spoken on the impact that the current world economic situation is having on the video surveillance market. IMS Research is cautious but optimistic about 2009.
“Analysis of the video surveillance market has been subject to considerable exaggeration.” says market analyst Alastair Hayfield. “Perhaps this is understandable given the high level of growth seen in the network video surveillance market. However, a more measured approach is required in these uncertain economic times.”
“It is imperative to realise that the global financial crisis is affecting particular market verticals and geographic regions in different ways.” adds Hayfield. “The aim of IMS Research’s latest video surveillance report is to outline exactly how and where the economy is impacting the video surveillance market and which regions and products can expect to see continued growth.”
In the more established markets of Western Europe, the US and Japan, there has been a noticeable slowdown in video surveillance spending. The retail and banking verticals are forecast to be hardest hit as consumer spending slows and financial institutions remain shaky. The transportation and government verticals fair better as video surveillance is often viewed as essential for ensuring public safety and substantial government funding still exists. Overall, the video surveillance market in Western Europe, the US and Japan is forecast to grow by a little over 4 per cent in 2009. That said, market growth is forecast to recover significantly in 2011 and 2012 as the relentless trend to network surveillance continues.
Manufacturers of video surveillance equipment should take heart though, as the markets in Eastern Europe, Russia, the Middle East and Latin America are forecast to remain strong. Combined growth for these regions is expected to remain above 20pc for the foreseeable future and the combined value of these regions is expected to approach $2 billion in 2012. A number of manufacturers, and in particular network video surveillance vendors, are moving to take advantage of this rapid growth by expanding their sales efforts in these developing regions.
Japan aside, the Asian market for video surveillance continues to be buoyant and, as a whole, is unlikely to see any major slow down next year. China is the powerhouse behind video surveillance growth in Asia and the Indian market is also hot according to IMS.
There are several factors causing the high growth in China. Government investment in Safe City projects remains very high. Some 660 cities have been ear-marked for development and projects utilising thousands of cameras have continued to appear over the last year. China is also set to play host to two major international events in the next two years, the World Expo in Shanghai and the Asian Games in Guangzhou, each of which will require substantial infrastructure investment. There is also a vast replacement market in China. Many of the first wave of DVRs now need replacement and the IR day/night cameras that are so popular in China require replacement on a regular basis, due to the relatively short lifetime of the IR LEDs.
The message the researchers stress in their latest report is that, far from a complete market downturn, only select regions and verticals will see flat or negative growth over the next year. The world market is still forecast to grow by over 10pc in 2009 and, if vendors are savvy enough to fair some bad weather and expand into developing regions, then 2010 onwards promises a return to higher growth.
About IMS Research
IMS Research is a supplier of market research and consultancy services on a range of global electronics markets, based in Wellingborough, UK and offices in Austin, Texas and Shanghai, China.
