At the end of 2012, Flir Systems announced the acquisitions of Lorex Technology and Traficon International, respectively known in consumer security electronics and intelligent traffic applications. The company talks about its acquisitions and what it foresees as potential markets for thermal imaging.
Flir's M&A and investment strategy is multifaceted and many criteria are evaluated in the decision making process. The acquisition of Lorex Technology supports several of Flir 's key strategic growth objectives. Flir's overall objective is to bring infrared imaging into homes, workplaces, and the lives of people everywhere. Lorex Technology is a market leading manufacturer of home and personal video surveillance products with very strong and successful retail sales channel relationships. As Flir continues to drive the price lower for infrared thermal imaging cameras and viewers, Lorex's retail channels and advanced e-commerce capability will provide widespread access to consumer markets for Flir's new thermal camera products.
Flir will inject infrared thermal imaging technology into both the Lorex and Digimerge video security product lines, which will expand the customer and application base for infrared imaging, and also provide a differentiated product platform for Lorex to ensure their leadership position in the do-it-yourself video surveillance market segment. Lorex has well-developed component sourcing processes, rapid product development cycles, and volume manufacturing capabilities. These key competencies contribute to Flir's penetration of the consumer electronics market.
Traffic
The use of thermal cameras in intelligent transportation system (ITS) applications is growing rapidly as it proves to be a superior solution. Thermal cameras are unaffected by darkness, sun washout, shadows, and many weather effects that traditional visible light cameras are susceptible to.
Traficon is the leading provider of video-based intersection control and roadway incident detection products. Traficon's core capability is its video image processing software for ITS applications. This technology requires little modification to be applied to security and other applications, so the Traficon acquisition brings high-performance video analytics capabilities to Flir. Thermal cameras are often paired with video analytics for perimeter intrusion detection applications. Combining Traficon's video analytics capabilities with Flir's thermal camera technology completes the task of integrating a powerful roadway monitoring solution for cities and municipalities around the world.
Thermal imaging is applied in two primary application areas in the traffic market: detecting the presence of cars at intersections for the control of traffic signal lighting, and along highways and roadways for automated incident detection applications. Thermal imaging provides clear video images during daylight as well as nighttime hours, and it is unaffected by shadows, bright sunset, and is largely unaffected by weather conditions. Therefore, thermal imaging is a more accurate means of detecting the presence of vehicles and people at intersections, and it allows city transportation managers to monitor roadways 24 hours per day, seven days per week.
Future for Thermal Imaging Technology
The video images created are data-heavy in that the pixels provide both an image as well as temperature information. For security and safety applications, being able to see clearly with no lights is a cost-effective solution. With the ever reducing prices for infrared thermal imaging cameras, using thermal cameras will become much more cost-effective compared to installing lighting for video cameras in a long run. Also, thermal cameras are a “green” technology because they contribute to the reduction in the use of expensive and energy-intensive lighting equipment.
Well-established and mature commercial vertical market segments include industrial manufacturing, power generation, building inspection, and critical infrastructure that require a high level of perimeter security. Emerging commercial markets include high-volume sectors such as consumer electronics, automotive, maritime, and light commercial security systems. Flir expects to see continued growth in each of these sectors.
Home Security Market
Flir believes thermal imaging will become a standard component in all security systems, including home security systems, as prices for thermal cameras drop. Thermal imaging requires no light, so advancements in technology will be able to replace all supplemental illumination required for video cameras to operate, whether it be white visible light or invisible IR illuminators for both indoor and outdoor applications.
Additionally, thermal images can be coupled with video analytics to create a very effective automated motion detection solution, one that will have a much lower false alarm rate than current visible light solutions in the market.
Home security and situational awareness, such as baby and elderly monitoring, is a rapidly growing market. Flir believes the unique benefits of thermal imaging will appeal to anyone using those types of products.
Management of Acquired Companies
“We have acquired nearly 20 companies in the last eight years, so we are experienced at folding in new products, people, and customers into our existing business,” said Andy Teich, President of the Commercial Systems Division at Flir Systems. “Given that a company's employees are its most critical asset, we focus on communicating clearly to the people that are operating the business we have acquired, how and why they were acquired, and what it means to them personally. This is critical to the success of these investments. Understanding the business' processes, product development, delivery cadence, and the factors that can disrupt the flow of a newly acquired business is also critical. We often do not impose significant change on our acquired companies and usually trust the management teams to continue to operate as they have. Where we do make adjustments is around supply chain sourcing, costs control, and manufacturing efficiency.”