Given the market trends at play, what will the markets actually look like in 2012? Which markets are growing? What are the verticals to watch out for? In this article, a&s analyzes the security markets in 2012 by product segment.
Given the market trends at play, what will the markets actually look like in 2012? Which markets are growing? What are the verticals to watch out for? In this article, a&s analyzes the security markets in 2012 by product segment.
Surveillance
Surveillance is expected to grow in 2012. IMS Research believes that demand for video surveillance equipment will remain strong. “Growth in network video surveillance equipment sales is forecast to exceed 25 percent in 2012,” said Gary Wong, Senior Research Analyst.
Wong predicts the verticals with the fastest growth (in terms of sales revenue) will be transportation, city surveillance and governmental markets. There will be variations among geographic regions, but all verticals are forecast to grow in excess of 15 percent in 2012.
The shift from analog to IP-based surveillance products helped drive the surveillance market following the 2008 financial crisis, and is also expected to drive sales in 2012. IMS Research reports that following 2008, the global analog market was relatively depressed while the network video surveillance market grew almost three times as fast as the total market in 2010, at more than 30 percent. “Throughout 2011, this trend continues to hold, with analog equipment sales remaining muted and network video surveillance vendors exhibiting robust sales figures,” said Blake Kozak, Senior Market Analyst. “Looking forward to 2012, the global video surveillance equipment market is expected to continue to grow, spearheaded by sustained strong network video surveillance equipment growth.”
There is increasing price competition/commoditization of the mid to low tier of the analog surveillance market. As IP video gets cheaper, smaller end users will see more value in switching over to an IP-based system. “The projected dip in the prices of IP cameras is expected to narrow the pricing gap between IP and analog systems,” according to the “Asia Pacific Video Surveillance Market” report from Frost & Sullivan. “The increasing presence of low-cost products from China and Taiwan will further drive down prices, as will the tough economic conditions that compel companies to offer competitive prices.”
Access Control
The access control market is forecast for steady growth in 2012. “Access control is often a purchase that must be made regardless of the economic climate, especially in highly regulated end-user sectors such as banking, government, utilities and airports,” Kozak said. Growth is expected to continue for the near future. According to a new report from Global Industry Analysts, the global electronic access control systems market is to reach US$14.7 billion by 2017. Global financial difficulties will help move this segment forward. “The prolonged 2007 to 2009 recession, interestingly, is expected to be a catalyst for growth as the financial pinch felt by employees and commoners alike can result in increased instances of theft, break-ins, shoplifting and whitecollar offences, thus throwing the focus back on efficient electronic security solutions such as electronic access control systems,” said Global Industry Analysts, in a prepared statement.
According to Kozak, the verticals that are expected to increase investment next year include sports and leisure, utilities, government, health care, airports and hospitality.
Regionally, Global Industry Analysts believe that opportunities in the U.S. remain, but advises watching for markets in APAC. “The U.S. will continue to remain the largest regional market. APAC is the fastest growing regional market, with value sales waxing at a CAGR of about 13.5 percent over the analysis period.”
Intrusion
Of the different product markets, intrusion looks like it will show the slowest growth, Kozak said, “The intrusion detection market has historically been relatively slow growing; as the global economy improves, the technology used in intrusion detection remains relatively unchanged.”
Verticals that are expected to be fastest growing, according to Kozak, are health care, residential and commercial. It is interesting to note that although residential is forecast to be slower than health care, it is nearly 30 times its size. The residential growth has been driven by instances of crime, but also due to the move away from traditional landlines toward wireless and IP. Commercial is forecast to grow most slowly of this group because of the lack of new construction.
However,despite lack of construction, Kozak believes that there are opportunities in the retrofit market. “Forecast to surpass $2.4 billion in 2011, the global intrusion market is poised to recover steadily as the industry capitalizes on new growth opportunities. Unlike other security products that are heavily dependent on new construction, intrusion detection, with its lower penetration rate, witnessed a less dramatic decline during the downturn. As a result of a stronger retrofit market, the Americas experienced a smaller decline compared to EMEA, with retrofit business having a lesser impact in Asia which benefits from stronger economic and construction growth from countries such as China and India.”