Looking beyond the 2012 ranks

Editor / Provider: By Tevin Wang and Judy Wang, a&s International | Updated: 12/6/2012 | Article type: Security 50

Consensus among the physical, electronic security industry is that the marketplace out there is highly fragmented and support-intensive. Cream of the crop, by unbiased financial performance, is not easy to muster, let alone gathering a representative 50. In this feature, a&s looks into the 2012 Security 50 who survived and/or thrived, to highlight changes, trends and directions for the near future.

The 2012 Security 50 ranking was based on 2011 financial results. 2011 was supposed to be a “rebound” year, and yet not everyone passed with flying colors. Some gained momentum, sales and market share, while others continued their struggle to find the best approach to defying declining revenues.

Video surveillance, compared to other product groups, had fairly strong revenue growth with an average of 19.5 percent. Avigilon saw its revenue grow to US$59.1 million, up 86 percent from 2010; its gross profit also grew a whopping 89.7 percent. Asian manufacturers Hdpro and Vivotek have also scaled the ranking ladder. As a matter of fact, nine of the top 10 companies for revenue growth are dedicated providers of video surveillance solutions. Chinese manufacturer Tiandy Digital Technology made its debut in this year's ranking; this company is coming on strong with 50.1-percent and 60.6-percent growth in revenue and profit, respectively.

The average revenue growth for the access control manufacturers on the Security 50 ranking was a mere 0.5 percent. Access control giant Assa Abloy (Global Technologies division) clinches the spot as top player again with $826 million in revenue, up 14.8 percent from 2010. According to its financial report, demand for RFID devices rose sharply in 2011, as it upgraded its numerous customers' previously installed locks, which used a magnetic stripe card locking system, to more secure, flexible and user-friendly locks that employ RFID. SimonsVoss Technologies also performed well, growing 18.4 percent in 2011. Korean manufacturer Suprema posted considerable revenue growth, up 21.9 percent from 2010 to $36.4 million in 2011, while another Asian vendor RCG restructured and suffered.

In profit growth, the top 10 include IP video solutions providers Avigilon, Mobotix and Synectics, security and safety systems provider Napco Security Technologies, and Asian elite Hdpro, Tiandy, Hikvision Digital Technology, Dahua Technology, Kocom and Win4Net.

Fast Growing Companies
Last year was quite significant for Avigilon, Mobotix and Arecont Vision. Avigilon achieved 86-percent growth, the highest among the 2012 ranking. Mobotix grew 35.9 percent, and Arecont Vision rose 25 percent. All three are pioneers in multimegapixel cameras and are enjoying the growth phase of the network camera product life cycle.

Avigilon
“In November, we went public on the Toronto Stock Exchange,” said Keith Marett, VP of Marketing and Communications. “In less than a year, we doubled our ITO price. In this day and age, that's a significant achievement to be able to deliver those kinds of results to shareholders. In 2011, Avigilon was named the fastest growing software company in North America by Deloitte's Fast 500 ranking.”

Mobotix
“Mobotix is like Apple,” said Magnus Ekerot, CEO of Mobotix. “We have full control of what we want to be. Putting standards aside, we should think about end users; they should have the freedom with installations and no extra fees for buying management software. Why we do something different is for the sake of end users. We also think about how we can help systems integrators and distributors make money and keep the margin they should have.”

Arecont Vision
“When it comes to surveillance, pixels (resolution) are all that matters,” said Becky Zhou, VP of Sales for APAC. ”Think about how much area can be covered by a camera. For a VGA resolution camera, you get about 1,500 pixels per dollar. For a 10-megapixel camera, it is about 1,800 pixels per dollar. This is more cost-effective, and the ROI is better. The megapixel camera is right in the initial, high-growth phase of its product life cycle. We are expecting more growth in the near future.”

 

 

 

 

 

 

EU Results, Surprisingly Good
For European companies, the average revenue growth was 17.4 percent, which is roughly 6 percentage points higher than the year before. Despite the financial struggles in southern Europe, double-digit revenue growth was posted by Assa Abloy, Axis Communications, Geutebruck, Mobotix, Milestone Systems, Nedap, Safran Group, SimonsVoss, Synectics and TKH Group, averaging at 22.3 percent.

It is worth noting that the three German companies that made the 2012 ranking — SimonsVoss, Mobotix and Geutebruck — all enjoyed consistent, uninterrupted growth, thanks to their strong domestic market and high market presence, averaging an uptick of 23.7 percent.

Minor Bumps in APAC
The average revenue growth from APAC companies, on the other hand, had somewhat lost momentum. Over the past three years, Korean and Taiwanese companies, which used to be the security world's go-to-factories, have been facing stiff challenges brought on by global financial and economic crises and the rise of Chinese manufacturers. Hikvision and Dahua, apparent locomotives of Chinese security manufacturing, have intensified the price competition for their geographically adjacent opponents. Over the past three years, the 10 Korean companies have been able to hold on to and remain in the Security 50 ranking, while two of the nine Taiwanese companies dropped out of the ranking this year.

Interestingly, with an average 17.5-percent revenue increase, the ranking's Korean manufacturers outperformed the overall average growth of 14 percent. While Hdpro's exceptional 83.7 percent lifted the bloc's average, ITX Security's 11.7-percent dip was a clear indication that the days of siloed analog devices are numbered.

Taiwanese players, in contrast, did not enjoy a fruitful 2011, the average revenue growth was a mere 8.8 percent, and three out of the seven Taiwanese companies suffered revenue losses. Dynacolor, Yoko Technology and Everfocus Electronics reported 16.4 percent, 16 percent and 12.3 percent revenue losses, respectively. Vivotek and Geovision, on the contrary, represented a small number of Taiwanese companies who did well in 2011 and invested in IP-based and vertical-specific solutions, with revenue increases of 62.1 percent and 27 percent, respectively.

Despite the successes of Hikvision and Dahua, another prominent Chinese (Hong Kong) company, RCG, encountered a severe organizational and financial struggle, with a revenue decline of 54.2 percent. Average growth for Chinese companies also turned lukewarm in 2011, which might be an implication that the domestic market has slowed, and those looking to grow will need to figure out how to make their mark in the international market.

Warning Sign
The average gross profit margin from 2012 Security 50 was a humble 12.6 percent, a clear warning sign that the security industry is following in the footsteps of the IT industry in terms of ever-decreasing profits.

To stay profitable means to differentiate and stay unique. Mobotix enjoyed a 76.8-percent gross profit margin to lead the top 50, followed by Milestone Systems' 75.8 percent — these were just two stellar examples from many in terms of system architecture and channel distribution.

Promising Verticals Fuel Bullish Growth in Turkey

Editor / Provider: a&s Turkiye | Updated: 7/19/2012 | Article type: Hot Topics

Vibrant Verticals
The pick-up in the construction sector accelerated growth in the private sector with new residential, retail and health care projects. There were also many security projects in finance and education.

However, the largest budgets this year came from the public sector. Projects at the fore were city surveillance, transportation projects (airports, undergrounds, tunnels, et cetera.) and public buildings.

Major Projects
The most attractive projects of 2011 were for Turk Telekom, Zorlu Center, Sabiha Goksen Airport, and the National Archives.

In addition to the large projects, there were also many medium scale projects, which were mostly integrated projects that include fire detection and extinguishing systems, video surveillance, access control and intrusion detection.

In 2011, an increased number of projects required IP-based HD video surveillance systems and card access systems, and demanded integration between the systems, said Bilgecanan Bilgis, Marketing Manager at Ateksis. “Antalya Airport, Medipol Hospital, Bursa Hilton and Hampton by Hilton, and Fenerbah?e Ulker Arena are projects in Turkey which we would like to be part of and concentrate on, and Malabo Congress Center Haydar Aliyev Center abroad.”

Levent Yildir?m, Director of Siemens Substructure and Cities Sector Building Technologies, said that Siemens surpassed their goals in 2011, citing numerous projects that are worth more than $100,000 in value: Buyaka Complex (shopping center, residence, office), Hilton Hotels, Erdemir, Sandoz, Magnesia Shopping Center, Tarsu Shopping Center, Habom (Aviation Maintenance Center), Marmara Park, Zorlu, Safir, Aliaga Prison, Bodrum Airport, Izmir Special Provincial Directorate of Administration KGM. He also stresses the contributed part of the accomplishment to foreign projects, most of which are located in neighboring countries like Iraq, Russia, Algeria, et cetera.

Gurani Kilic, Country Sales Director for Bosch Security Systems, mentions projects that were conducted in collaboration with their partners and are worth more than $500,000 in value: Sorgun, Soke, Didim Surveillance Cameras Projects, Highway Tunnels Projects, Turkiye, Kirazli – Olimpiyatkoy Subway Line Project, Istanbul, Antalya Airport Domestic and International Lines Terminal 2.Section, Antalya, Republic of Turkiye Central Bank, Bursa, BSH Factory, Istanbul, Bagc?lar Medipol Hospital, Istanbul, Hilton Hotel, Bursa, Cumhuriyet University, Sivas, Archaeology Museum, Hatay, Ma?ka Residence, Istanbul, European Residences, Istanbul, Terrcity Shopping Center, Antalya.

Bulent Cobanoglu, GM of Senkron Guvenlik, mentioned two important bank projects by Honeywell: Standardizing systems for the merged Fortis and Turkiye Ekonomi Bank, as well as a card access system for Garanti Bank that covered 50 management buildings.

2012 and Crystal Ball
Although 2012 will be a difficult year, the consensus is that growth in the security industry will continue despite the economic slowdown, said Tarkan Tuncel, GM of Kekova.

The recession prospect in the world economy in 2012 weakens the prospect for growth in Turkey, Kilic said. “In 2012, there is a 4-5 percent growth prospect in the general economy and 6-7 percent in the construction sector. We can say that the security systems sector will indirectly be affected by this conjuncture in 2012."

“In addition, the pick-up in Libya and the neighboring countries in the last quarter of the year is good news for our sector,” Kilic continued, saying that the continuation of public investments and the mega projects into 2012 suggests that the security industry will continue to grow, albeit at a slower pace.

Yusuf Ziya Oncel, Sales Manager at Pelco Turkey, predicts that 2012 will be a year when no one will be able to conduct aggressive enterprises, but that “we will keep a wary eye so that we can maintain our stability.” According to Oncel, the next 10 percent of growth will be achieved via digesting the growth that occurred in 2010 and 2011, while also stabilizing the total sales at the same levels.

Hidayet Yilmaz of NFS Guvenlik also agrees that the security market will continue growing in 2012, although at a slower pace. According to Yilmaz, the city transformation that will be carried out in 2012, especially in big cities, will have a positive impact on the market.

Cobanoglu shares the consensus. “If there is a crisis, we have to conduct business is different ways. We have to hold fairs and seminars to continue to educate the market. Otherwise, it is hard to hold on.”

In terms of products, industry experts agree that sales for IP-based systems and megapixel cameras will continue to grow. Yildiz has high hopes for network cameras and regularly expands their IP-based product groups. IR cameras and mobile DVR's also show similar potential.

Green buildings will play a key role for the security industry in 2012. Green buildings make extensive use of automation technologies to make them easily manageable, traceable and intelligent, and are great investments in terms of ROI. Especially big cities, green buildings will begin to flourish and; companies that operate and develop products in this field will be able to perform well even in bad economies, according to Kilic."

Additionally, Profilo Security Systems Sales Manager, Ertan Gedik predicts that the alarm system projects will increase for gas leak, fire and flood detection.

Lingering Problems
Although 2011 evaluations and 2012 predictions point to growth and development for the security industry, there are a few problems that need to be solved.

Products and companies must form and adhere to standards. “Although Turkey is among the few countries that will grow, compared to other nations in Europe and the Middle East, regulations and standards are still not what they should be,” Ozan Demirel, Region Manager, Controls and Security Systems, UTC Climatel said.

Cobanoglu believes that the lack of certification for security companies is a problem, saying that there is no selection process or evaluation even though there are more and more companies entering the market.

Cobanoglu continues to talk about another issue: there is no specialty customs for the security sector in Turkey. “Unfortunately, we still pay Special Consumption Tax (SCT). Video surveillance cameras are taxed as luxury items, following the footsteps of the digital camera found in everyone's pocket. However, these systems are not luxury — they are a necessity. Cancelling the SCT and lowering VAT would directly affect the end user and increase our sale, while also preventing illegal activities regarding security equipment, such as counterfeiting and bootlegging."

Turkey Alive and Kicking

Editor / Provider: a&s Turkiye | Updated: 7/19/2012 | Article type: Hot Topics

According to IMS Research, Turkey is the No. 1 security market in the Middle East region, ahead of Saudi Arabia.

A key driver for growth was that Turkey's economy improved significantly in 2010, explained Gurani Kilic, Country Sales Director for Bosch Security Systems. “New constructions— real estate sectors—grew by nearly 10 percent. In 2011, Turkey's economy broke the world record with 11 percent growth in Q1; overall, Turkey saw 7.5 percent growth in 2011.”

Kilic says the security industry enjoyed an active year in 2011, citing increased investments in Turkic nations and the surrounding regions, despite the debt crisis in Europe and riots in Libya and North Africa.

New constructions play a key role in the security industry's substantial growth, agreed Bulent Cobanoglu, GM of Senkron Guvenlik. “Fire warning systems and intercom systems were heavily used in new buildings, and large quantities of perimeter security and video surveillance systems were put in place. The security industry, of course, benefited greatly from these installations.”

However, the sudden increase in the parity of dollar near the end of 2011 had a negative impact on the security industry. “2011 started off pretty well, but we had a rough time during the last quarter and had to adjust our expectations for November and December.” said Ali Yildiz, GM of Oncu Guvenlik.

Still, 2011 was a good year for the security industry. The electronic security market has for years sustained its constant growth except for the periods of severe crises and 2011 was therefore positive for the electronic security market, stresses Ismail Uzelli, Chairman of Board at Sensormatic.

UTC Fire & Security Turkey saw 50 percent growth in 2010 and 35 percent in 2011, which signals a healthy rebound for Turkey's security industry. Turkey is now the 6th largest market in the UTC Fire & Security EMEA organization, said Ozan Demirel, Region Manager, Controls and Security Systems, UTC Climate.

For Bosch Security Systems, Turkey was the strongest growing country office in EMEA in both 2010 and 2011, according to Kilic.

20% Growth
Overall, industry experts agree that the security industry grew by 20 percent in 2011, compared to 2010. The security industry has generally grown by around 20 percent annually, and 2011 was no exception, said Hasim Yalssn, GM of Bilmak.

Saruhan Acar, GM of Bilgi Elektronik, arrived at a similar conclusion after studying its own volume, customer portfolio and sales. Acar said the security industry grew by at least 20 to 25 percent in 2011. Excluding the last mile, revenue for security equipment reached$500 to $600 million when including actual installations.

“Turkey's vigorous economy has been growing at a rate that is not seen much in Europe,” Kilic said. For Bosch Security Systems Turkey, sales increased by 32.4 percent in 2011. Kilic said that sector capacity in Turkey reached $275 million in 2011.

Videofon Security Systems achieved a growth of 15 percent in 2011, said CEO K.Mehmet Kahramanoglu. Kahramanoglu said the overall capacity of the sector in 2011 was around $650 million and dissects this number into product groups: Video surveillance (50 percent), intrusion detection (20 percent), fire alarm (10 percent), access control (10 percent) and others (10 percent). 30 percent of total sales revenue is contributed to installation and services, Kahramanoglu added. Uzelli provided a break down with similar conclusions: Video surveillance (60 percent), intrusion detection (12 percent), fire alarm (8 percent), access control (5 percent) and others (15 percent).

Honeywell Turkey's Mustafa Altunta? broke the numbers down as well: $250-300 million for CCTV, $70-80 million for intrusion, and $40-50 million for access control. Altuntas said that with perimeter security and special/private security equipment included, the electronic security market reached nearly $400 million in revenue in 2011.

When it comes to the distribution of security products, video surveillance takes one lion share of the total revenue. Total sales of video surveillance products reached $150 million, with the total security market pegged at $450 to $500 million, said Yusuf Ziya Oncel, Sales Manager at Pelco Turkey.

Following the market shrinkage following the crisis, the current electronic security market is around $440 million, said Levent Yildirim, Director of Siemens Substructure and Cities Sector Building Technologies.

The numbers are largely in the same range, but there is still a lot of potential for growth, said Metin Kastro, GM of Pronet Security. “Approximately 140,000 to 150,000 residences and offices have subscription to communication centers. With 17 million houses and 2 million offices in Turkey, we still have a lot to achieve.”

Moving forward, Ekrem Ozkara, GM of Okisan, predicts 15 percent growth in 2012, citing the increasing high-level projects in Turkey and its neighboring countries.

Products Carrying Momentum
Sales for network cameras have continued to grow. On the video surveillance side, growth has been mainly driven by IP-based video surveillance systems, which has approximately doubled, Oncel said. Having 90 percent of their sales came from IP-based systems, Oncel predicts that the analog market will be completely replaced by IP by 2014.

Acar agreed that video surveillance took the spotlight in 2011, and noted that IP-based systems are preferred over analog, especially when it comes to public tenders.

On the other hand, ?obanoglu believes that IP-based systems' market share of 10 to 12 percent in the video surveillance market underlines two basic problems: Data storageand transmission. Data storage is expensive, Cobanoglu said, and better compression technologies need to be developed to overcome this problem. Transmission will also benefit from better compression, since current bandwidths are not practical for video surveillance. IP-based video surveillance will show more potential once these two problems are solved, Cobanoglu said.

Regardless, there is always a need for more detailed images. Altuntas points at megapixel cameras as one of the rising stars of 2011, emphasizing that cameras with 10 and higher megapixels are now more common.

Kilic said that, one of the most significant developments in the security industry in 2011 was increased demand for HD video surveillance systems and products. In 2010, Bosch launched a HD product line that was developed to meet the demand for HD video in the IP-based security systems market. In 2011, this product group significantly expanded with new product launches.

Ozkara mentioned that Mobile DVR were one of the most important developments in 2011. He said that many cities have announced mobile DVR projects since 2011, following new regulations. 800 to 1,000 mobile DVR projects have been launched for school buses and public buses, and Ozkara predicts that demand for this product group will accelerate in 2012.

Uzelli added that the servers and network switches emerged in 2011 as another development. Security companies have become significant server and switch vendors due to the increased demand for them in security projects, Uzelli said. He said that server and network switch sales is becoming a big chunk of revenue for security companies. On the other side, IT companies are trying to become security companies, Uzelli said, and will be continue to acquire big security players.

Uzelli continued to emphasize that biometric access control and integrated HD video surveillance systems are on the rise, and that “companies that offered customers total solutions with high brand value and appropriate pricing undertook significant projects.”

Growing Profits in Lean Times Part Ⅱ

Editor / Provider: by a&s International | Updated: 12/1/2010 | Article type: Security 50

Production Costs
Manufacturers have a number of operating costs that affect their prices, as well as their profitability. This year, production costs were affected by a component shortage as well as limited warehousing. Final prices were subject to unfavorable currency changes, an inevitable part of global business.

Mobotix managed to lower its material usage ratio, or the cost of materials to the total output, to 26.2 percent from 29 percent, the company said in a prepared statement.

Some costs can be saved by establishing overseas branches. “The real cost is not in external things, but in our growth and expansion,” said Tony Yang, International Marketing Director for Hikvision Digital Technology. “In 2008, we had a joint venture in India, as well as a Russian joint venture and European offices in 2009. Aside from the expansion of our US office, these were necessary investments, as entering new markets offers greater flexibility. With local operations, there are more services and support that can be delivered to the market within the shortest time.”

Other providers found new locations helped their bottom line. “RCG relocated our operational headquarters to RCG Tower in Malaysia in mid-2009, which has proved to be significant in the midst of the global financial crisis by means of lowering operating costs and bringing substantial benefits to the company,” Lee said. “With competitors kicking in, RCG adjusted its pricing model to maintain attractiveness. We, however, believe that we will still have sustainable margin.”

Some makers automated production and relocated manufacturing facilities. While Assa Abloy was not in the top 10 for profit growth, it is worth noting that its Global Technologies division moved production from Western Europe to China. It joins several other makers who produce in China, including Bosch and Panasonic. As Asia manufactures most of the world's security equipment, it seems likely more companies will go east in the future.

Challenges
In light of the numerous external challenges, it was interesting to note how many companies emphasized connecting with customers. Aside from making sales, manufacturers with a long-term strategy repeated that placing client needs first was a continued priority.

The migration to IP remains a hurdle. “IP still accounts for only 30 percent of the market, and this shift is still ongoing,” Mauritsson said. “We will continue to make efforts in education, present more competitive and attractive products, and penetrate smaller installations.”

Other providers saw the IP challenge as an exciting prospect. “Although the security market is moving from older analog systems to IP, 90 percent of this transition has still yet to take place, giving IndigoVision a clear opportunity,” said Oliver Vellacott, CEO of IndigoVision.

Education is a long-term challenge for manufacturers. “Some technologies do not require throwing out existing equipment,” Yang said. “Users should understand the actual costs involved in product replacement. If they are very conservative, we need to address those concerns.”

Implementing new technologies remains a challenge. “A key challenge for us and for the industry in general is the speed at which technology can evolve to cover new needs and solve specific problems,” Fullerton said. “Interesting developments and applications can and will be seen in lower-level analytics, solid-state storage, and incident reporting and management, as video enablement of various business processes will be increasingly appreciated and become prominent.”

Acceptance also is a challenge, as L-1 noted that biometrics have yet to achieve widespread commercial acceptance. The cost, performance and reliability of the competition will also keep biometric vendors on their toes, the company said in a prepared statement.

No silver bullet exists for profit growth. Being the first to commercialize new technologies is an advantage, such as what Axis Communications did with the network camera, but not a surefire way to make money.

Solutions with good value and cost-effective performance will command better returns, so manufacturers will do well to listen to clients, instead of promoting the newest features. It takes a long-term strategy and a commitment to customers to develop a winning solution and retain clients.

Find More 2010 Security 50 Articles :

● Asia Weathers the Storm

● Growing Profits in Lean Times PartⅠ

● Bucking the Downward Trend: Top 10 Revenue Growers of 2009

● Security 50's Top Performers Rise Above the Fray Part Ⅱ

● Security 50's Top Performers Rise Above the Fray Part Ⅰ

Newcomers: Making the Cut

Editor / Provider: The Editorial Team | Updated: 8/16/2007 | Article type: Hot Topics

This year's Security 50 ranking includes 11 new faces from all corners of the globe and all product sectors. The U.S. is well-represented, with GE Security and FLIR breaking into the top 10, and L-1 Identity Solutions close on their heels at 16th. Asia continues to be strongJVC of Japan, Hikvision of China, Commax of Korea and Hi Sharp Electronics of Taiwan successfully placed in the ranking. In Europe, Nedap (Netherlands), Texecom (U.K.) and Geutebruck (Germany) helped make 2007's ranking a diverse one. By product group, the majority of this year's new participants are in video surveillance. Video surveillance providers include FLIR, JVC, Hikvision, Commax, March Networks, Hi Sharp Electronics and Geutebruck. GE Security and Nedap have more diverse portfolios in multiple domains, while L-1 Identity Solutions is in biometrics and Texecom is in alarms. From this band of newcomers, it appears that emerging security players are finding profits in the video surveillance sector.

No. 4: GE SECURITY

GE Security, a wholly owned indirect subsidiary of the General Electric Co., is a leading supplier of security and life safety technologies, with operations in more than 35 countries and approximately US$2 billion in annual sales. GE Security offers one of the industryˇs broadest product portfolios, covering explosives and narcotics detection, intrusion and access control, video surveillance, key management and fire detection. GE Security products are used to protect people and property across a wide range of industries, including aviation, law enforcement, banking, education, health care, mass transit, residential and retail.

GE Security was honored with the Frost & Sullivan 2007 Global Market Leadership Award for Container Security Devices for its CommerceGuard container security solution.

No. 6: FLIR SYSTEMS

FLIR Systems is a world leader in the design, manufacture and marketing of thermal imaging and infrared camera systems. FLIR products are used in a wide variety of applications in commercial, industrial and government markets, internationally as well as domestically. The company offers a variety of system configurations to suit specific customer requirements. Its business is organized into the following three divisions: Thermography, Commercial Vision Systems and Government Systems.

Thermography products are generally sold for commercial and industrial applications, generally where temperature measurement is the primary requirement. The Commercial Vision Systems division is focused on commercial markets where the primary need is to see at night and in adverse conditions. The Government Systems division provides enhanced vision capabilities to a wide variety of military, paramilitary, law enforcement, public safety and other government customers.

No. 7: JVC

The JVC Professional Electronics division manufactures surveillance video equipment, audio equipment, professional video equipment and projectors. Its products include network video recorders, IP dome cameras and high-resolution CRT and LCD monitors. JVC solutions are suitable for installations such as prisons, campuses, parking garages, railway stations and other environments. Its video solutions are scalable and enable remote surveillance. JVC partners include Paxton and Milestone, whose software solutions are integrated with JVC hardware.

In the Professional Electronics segment, JVC sales in Japan declined year-on-year. Sales of security products, including surveillance camera systems, were strong, but sales of professional audio products were sluggish. In markets outside of Japan, sales of security products grew steadily, while sales of professional HDV camcorders were up significantly. The headquarters of its parent company, Victor Co. of Japan Ltd., is in Yokohama, Japan.

No. 11: NEDAP

Nedap's Security Management, which includes access control systems, payment, fire and burglary alarms, surveillance and biometrics, recorded a substantial increase in revenue, due partly to a very large contract. This market group has increasingly switched its attention from hardware to software. This is clearly reflected in the increase in added value and, accordingly, in profit.

The distinctive character of software-based solutions sets them apart from hardware-based systems. The distinctive power of Nedap's AEOS security platform is modular structure of the software, which enables it to respond quickly to new security needs and wishes based on changing circumstances.

When it comes to security, it is important to have tailored solutions. To develop customized solutions, it is essential to have a close relationship with the customer, a broad knowledge of security, an awareness of changes, familiarity with the business and a wealth of experience on which to draw. In this area, service is key.

No. 16: L-1 IDENTITY SOLUTIONS

L-1 Identity Solutions is a trusted provider of technology, products, systems and solutions that protect and secure personal identities and assets. Together, its growing portfolio of companies delivers a full range of offerings targeted at managing human identity. These offerings are the cornerstone of building convenient and secure identification solutions. L-1 companies have a 20-year history of serving domestic and international governments, law enforcement and border management agencies, military branches, and commercial businesses.

Because of threats to national security and significant economic loss resulting from identity-based fraud and theft, the market requires a more secure, tamperproof means of validating claimed identity as well as issuing credentials that grant privileges for travel, physical and logical access to facilities and networks, and financial transactions. L-1 believes that the best means available today is through an end-to-end, integrated multi-biometric (finger, face, iris) recognition solution.

No. 21: HIKVISION

Hikvision is dedicated to the continuous research and development of video encoding, decoding and processing technologies, and highly reliable digital surveillance products. The Chinese supplier provides advanced H.264 solutions for digital surveillance security industries based on its patented algorithms.

Its products range from audiovisual compression boards to embedded net DVRs and multi-purpose DVSs. Hikvision provides the latest software development kits to partners with online technical support. Its products are designed and produced by its 650 employees, which include 300 engineers in research and design. Hikvision's products are widely used in security surveillance systems for public security, banking, telecom, law enforcement, transportation, residences and warehouses.

Partners include Texas Instruments, whose DaVinci chipsets are used in Hikvision DVRs. Hikvision and TI established a laboratory in 2006 to promote the development of video surveillance.

No. 22: COMMAX

Commax, located in Sungnam, Kyunggi-Do, Korea, is a leading company in home automation with the largest market share for video door phones. The Korean government supports the company, as Commax is a member of the digital home network business consortium led by the Ministry of Information and Telecommunication. Commax is also participating in development of an affordable home network system for a domestic robot platform and smart environment project lead by the Ministry of Commerce, Industry and Energy.

No. 23: MARCH NETWORKS

March Networks draws upon a rich heritage of IP-based networking and video processing technologies to design, implement and support network digital video systems. These solutions help businesses enhance security, work more effectively and protect themselves against theft and fraud.

Its software portfolio combines visual and business intelligence with exceptional video network management. March Networks solutions enable organizations to dramatically improve loss prevention, risk management and surveillance programs and gather business intelligence with applications such as LP data mining and financial transaction investigation.

Network and mobile video recorders provide scalable recording and real-time monitoring over wireless and wired IP networks, offering customers a range of platforms for different environments that support analog and IP camera integrationall managed with March Networks enterprise-level software.

No. 37: HI SHARP ELECTRONICS

Hi Sharp Electronics, established in 1987, provides a variety of high-quality and cost-effective products. Revenue for 2006 climbed to $40.8 million, representing growth of 15 percent from 2005. The company manufactures full product lines in LCDs, cameras, DVRs and other peripherals that offer a wide range of video surveillance applications for all fields of industry.

Its headquarters are located in Taiwan. Spread out over 72,000 square feet, the facilities house more than 200 employees. The Taiwanese supplier is dedicated to research, development, manufacturing and marketing of high-quality CCTV solutions. It has successfully produced CCTV-integrated systems and services, which have contributed to its competitive advantage.

No. 38: TEXECOM

Established in 1986, Texecom is an award-winning manufacturer of intruder alarm products, including a full range of motion detectors, control panels, perimeter protection devices, heat and smoke detectors, external sounders, and power supplies. In 2005, Texecom Ltd. became a member of the Halma Group of Companies.

Texecom's commitment to uncompromising product design has been recognized by the worldwide security industry in achieving product and corporate awards. All Texecom products are designed to comply fully with British, European and international standards for safety and performance. Texecom products are protected by U.K. and international patents, trademarks and registered design rights.

No. 47: GEUTEBRCK

Geutebruck is an industry leader in the field of video surveillance. Security professionals worldwide turn to Geutebruck products for monitoring of industrial production processes, securing peripheries of power stations or keeping an eye on department stores and banks. Security managers of government facilities, industrial corporations, financial institutions and utility service providers rely on the German manufacturer whenever they need professional video surveillance systems from a single supplier.

Solutions include the MultiScope video management system and video motion detection technology. Geutebruck maintains direct subsidiaries in the U.K., France, Russia, Slovenia and China, and representatives and sales partners for Geutebruck products offer their services all around the world. The supplier is based in Windhagen, Germany.