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Changing Market Dynamics Propel Korean Industry Evolution Ⅱ
Hayden Hsu 2011/2/19

More Than A Vision
Established in 2007, ImageNEXT now has more than 30 engineers working on vision-related solutions, namely the advanced driver assistance system (ADAS) and video analytics. “The ADAS provides multichannel image processing so that the driver would get a simulated bird’s eye view from the top of the vehicle, to simplify parking maneuvers and to help avoid pedestrians, oncoming objects, lane departures and collisions,” said Youngduck Seo, Director and CTO. “Hyundai is now testing it out for us, before mass adoption and production.”

More Than A Vision
Established in 2007, ImageNEXT now has more than 30 engineers working on vision-related solutions, namely the advanced driver assistance system (ADAS) and video analytics. “The ADAS provides multichannel image processing so that the driver would get a simulated bird's eye view from the top of the vehicle, to simplify parking maneuvers and to help avoid pedestrians, oncoming objects, lane departures and collisions,” said Youngduck Seo, Director and CTO. “Hyundai is now testing it out for us, before mass adoption and production.”

Korean innovation does not stop at producing video surveillance equipment only. A relatively young management software developer (established in 2007), Innodep has positioned itself as “Korea's Milestone.” “While Korean manufacturers have had pretty high worldwide market shares in video surveillance products, we've been lacking software solutions to manage them or back them up,” said James Joo, VP. “The push from customers and government users has been quite significant and drove us to fund this company to address such severely underserved market needs.”

In access control, “the first quarter of 2010 was bad for us as a biometrics solution provider, but the situation improved rapidly after the second quarter, resulting in 30-percent overall growth,” said Brad Choi, Team Manager of Access Control System, Global Business Sector, Suprema. “We have a sophisticated functionality and pricing matrix for different markets of different maturation levels.”

Intrusion and Automation
There are less than 10 solution providers in intrusion detection in Korea, and Korea Mechatek (KMT) is No. 1 in market share. “Industry development has been pretty similar to that of Japan. As alarm-monitoring companies are required by law to pay 100 percent of whatever was stolen should an alarm go off, detection technology evolves (or is forced to evolve) quite rapidly every year to minimize false positives and negatives,” said Kwan-Sik Choi, CEO. “We even review our R&D investment every quarter. In 2010, our revenue growth was about 10 to 12 percent.”

For intrusion detection and home automation, the markets in Korea, China and Southeast Asia (especially Singapore and Vietnam) recovered really nicely in 2010, with 100- to 115-percent growth for Seoul Commtech (a Samsung company). “Overall growth was about 20 percent, as the markets in Europe, the Middle East and the U.S. didn't quite make the 2008 mark yet,” said Gabsoo Kim, Home Network and Security Export Manager. “We have also been restructuring our channel and looking for new partners in the Middle East, Turkey, Russia, Poland and Germany.”

Standardization in home automation systems has been slow. “We started with our communication protocol in 2002, but again differences exist among different countries. Therefore, we spend about 20 percent of our annual revenue on R&D for the models to be exported,” continued Kim of Seoul Commtech. “After the recession, a noticeable change is that customers — real-estate developers in our case — are becoming more interested in brand names, simple features (popular ones being entrance and lighting controls, window blinds and HVAC) and unbeatable prices.”

Another interesting solution provider interviewed was in lighting. “Compared to 2009, we did pretty well as an LED lighting solution provider across all regions and experienced 70-percent growth in 2010,” said Elizabeth Kang, Overseas Sales Manager of Paragon Tech. “With fierce competition from Bosch, Raytec and Microlight, we still managed to secure some high-profile, long-range (100 to 600 meters) military and border installations in the U.K., U.S., Middle East and Asia. We're also considering exclusive distributors in Eastern Europe. LED lighting in general is greener and consumes less power; we also offer five-year warranties on our illuminators and 10-year on our chipsets, which attest to our quality and performance ratings.”


Soft Powers
Human Resources
To be able to compete in today's cutthroat environments requires much more than production prowess; R&D capabilities and experience are equally pivotal. “Hitron has been around for 30 years and understands perfectly that IP is not just about product sales; software development and training are equally, if not more, important,” Jung said. “Even with standards like the ONVIF, vendors still have their own interpretations and different development road maps. That's why public ‘plugfests' are needed, as a reality check to ensure that everyone understands and follows the specifications correctly, and Hitron is an active contributing member of the ONVIF.”

ITX started in 1998 and currently has more than 40 percent of its personnel dedicated to R&D. “After going public in 2009, we now own our own manufacturing facilities and can focus on fine-tuning smaller details like automatic bandwidth control and perfecting the balance among product functionality, reliability, quality and price,” Lee said.

For Innodep, “our R&D team is composed of senior engineers from the manufacturing community, with an average of eight to 10 years of product development experience under their belt, so it's really easy for us to communicate and get the ball rolling,” Joo said. “We were late coming into the ‘game,' but it allowed us to think deeper and clearer.”

During the recession, HDPRO managed to advance its material and component forecast system and started to adopt a multisupplier approach. “Our purchasing and material department has also been making a concerted effort to lower our BOM cost by leveraging our ever-expanding sales volume,” Kim said. “With increasingly fierce price competition, it is vital to make technology differentiation clear, through proper marketing promotion and company image maintenance.”

Price competition in the market is really tough. “We're trying to squeeze our production cost by improving

production and purchasing methods (with mass quantities and cash payments) and securing ICs in advance based on an early yearly production plan,” Han said.

With more than 60 percent of its personnel devoted to R&D, iCanTek is more than prepared in the competition against newcomers that offer products with merely acceptable specifications at very low prices. “The extensive experience and knowledge of IP ensure our system functionality, stability and quality,” Lee said. “Customization and support services also set us apart from the competition.”

In 2011, Sevo will be expanding its R&D team to continue to work on its remote client software and ONVIF-compliant network cameras, to be bundled with the HD hybrid DVR. “With unique product offerings and a competitive BOM cost advantage, the company is well-positioned to take on the Tier-1 titans,” Kim said.

Simplicity has also been highly demanded, given systems are getting larger and more complex. “As one of the top analog camera OEMs, C-Pro Electronics enjoyed 12 percent of growth in 2010, with huge orders and projects rushing in in the second half,” said Rhea Jang, Assistant Manager in Overseas Sales. “Needs for IP and ease of installation/use are on the rise; for example, we have a series that can accommodate multiple modules and allows for one-screwdriver installation and housing design.”

Needs Analysis
Product needs from new buildings are always changing; recent requirements included features such as ecofriendly, remote health care, 10-inch panels and Android interfaces, said Kim of Seoul Commtech. “Integrated functions — such as video door phones or intercoms on TV screens, door controls on remote controllers or cordless phones, and gas and utilities meters on intercoms — are in ever-increasing demand, especially for markets that are more receptive to newer technologies. We are also developing a multimedia kiosk with intercom and street lamp functions.”

This year, ITX will have a fuller range of megapixel cameras and recorders, hybrid DVRs and NVRs, to cater to IP and integration needs from newer buildings and installations. “In analog, we will have 650 TVLs and HDcctv ready,” Lee said.


Three types of analytics are offered by ImageNEXT: server, camera and board. “We've expanded our algorithms from standard engines (from university and government research institutes) to make scenariobased detection more stable and intelligent for real-life applications and customizations,” Seo said. “Training or tuning software parameters has also been made easier, to minimize the gap between customer expectations and real-world performance.”

TOM has been focusing on providing verticalized solutions and customizations for higher-end niche markets, to get slightly higher margins. “For example, we've developed our own HD codec to filter out noise and enhance overall performance in color rendition and contrast. We also added a remote support feature for an alarm-monitoring customer who would have the same GUI as its customers for easier troubleshooting and simultaneous live and search playback,” Park said. “As 70 percent of the technical support inquires we receive are due to misuse of hardware or software, having remote support and training capabilities really cuts down on our cost and sets us apart from the competition.”

The number of IP PTZ camera providers is rather limited — making training and support resource-intensive — so Cynix is considering HDcctv (probably after the second quarter), to build up a fuller spectrum of IP PTZ, megapixel/HD PTZ and HD-SDI PTZ offerings. “We are also recruiting software engineers,” Bay said.

Uncharted Territory
With IP and HD-SDI solutions ready, CamTron can provide its customers with more choices. “Furthermore, CamTron has been continually developing specialpurpose cameras like microscopic cameras, and our video analytics is almost complete for production,” Chun said.

In 2011, HDPRO will continue to strengthen both its analog and IP lines, with HD-SDI and megapixel offerings in March and April. “We see Asian and Latin American markets, such as Vietnam and Brazil, are with very high potential, and our strategy is to put our hooks in the markets, like fishing, for the mid to long term; when the markets start to move, we will be all ready with great partners and products,” Kim said.

TOM's HD DVRs were already ready for shipping in the last quarter of 2010, and the new NVRs were sent out for sampling last month. “We are confident and are projecting at least 10 percent of growth this year, targeting niche verticals such as museums and banking,” Park said.

Hitron anticipates that 15 percent of its revenue in 2011 will come from the IP line where it will have at least 50 new products, as network capability has become the de facto standard in new buildings and projects. “We will also have a full lineup of 700 TVLs and offer a free, fully functional NVR software license for 64 channels,” Jung said.



Lee of iCanTek is expecting to see an even faster transition to HD, in both camera and recording technologies, in 2011. “About 50 to 100 models are on our 2011 product road map, including smart-phone apps, waterproof and purpose-built cameras, indoor and outdoor solutions, ONVIF-compliant NVRs and management software, and PoE modules. We've also built in data security measures and privacy safeguards in our IP lines. Overall sales growth is expected to be more than 40 percent.”

Micro Digital will launch a series of HD-SDI products, widen the range of IP products, and initiate more brand marketing in the U.S. and U.K. where its is currently selling only small quantities on an OEM basis, Han said.

For Paragon, Kang is expecting a 50-percent growth rate this year. “We're developing new product lines, including white-light LEDs for golf courses and stadiums. Based on our own market research, we're also working with a camera manufacturer to develop integrated systems.”

Eom of Nadatel believes differentiation ultimately lies in software, GUIs, network utilities and technical support, and these qualities have helped the company secure a strong foothold in the industrial, health care and education markets.

For BT & Com, 2011 will be its foundation year, with overseas sampling in the U.S., Europe and Japan and product development in network cameras. “We are also targeting smaller niche applications such as SMBs and retail,” Huh said.

In product development, more high-resolution offerings and mobile applications will be made available by C-Pro, aiming for overall growth of 40 percent. “We will also try out new promotional strategies and marketing materials, to keep in constant communications with our worldwide customers,” Jang said.

RTS is launching new products on all fronts: video encoders, network cameras, NVRs, panoramic lenses, management software, access control integration and commercialized industrial-automation offerings, Bang said.

In software, Innodep will be integrating new features, such as ALPR, VCA, geographic information and biometrics, into its software soon and will be developing functions that support wireless applications, Joo said.

Even in access control and biometrics, the trend toward IP is clearly palpable, especially with more and more Web-based solution requirements from emerging markets, so Suprema will expand on its current PoE model to better develop Brazil, Russia, India and Australia. “Other product development efforts will be on RFID and management software, as well as modules for integration with other brands or systems,” Choi said.

In intrusion detection, awareness is already high in Korea and Japan. “Homeowners easily pay US$100 to $200 per month to have their properties monitored,” said Choi of KMT. “In Korea, home automation is even required by law for buildings constructed after the 1990s.” Jade Choi, Assistant Sales Manager, added that the company will be developing even more sophisticated features, like “robotic-cleaner immunity” and integrated solutions combining PIR with surveillance, microwave and wireless transmission.

Changing market dynamics have indeed propeled the Korean industry to adapt and transform faster.

Messe Frankfurt New Era Business Media Ltd. All rights reserved. 2018/12/15 print out