Expert Perspective

The U.K. is one of the most important CCTV markets in the world. Strong potential has made it a prime target for many manufacturers, many of which have established distribution and branch facilities.

The U.K. is one of the oldest as well as most established, competitive and saturated CCTV markets in the world. While the U.K. is not a large nation, it is one of the largest users of CCTV equipment; historically, the population has been very accepting of video surveillance. Generally, Britons believe that those who are not doing anything wrong have nothing to hide. Because of this, invasion of privacy arguments are sometimes raised, but never seem to gather serious support. This is in direct contrast with many European markets and, even, North America.

Large potential has attracted companies from around the world, while creating home-grown innovators such as Dedicated Micros, Baxall and Tecton; these companies have developed worldwide reputations and large export markets. Baxall exports, for example, account for 57 percent of sales. Although there is still a healthy distribution sector in the U.K., dominated by Norbain, manufacturers rely on it less. Many tend to have larger inventories for immediate dispatch; others have enough products on hand to provide complete systems, enabling them to supply and service the installer market directly. In conjunction with this, distributors have expanded and improved branded product lines, while refining offerings. There is much competition for the installer business, and the market has collapsed from a traditional pyramid to a flat structure.

In 1998, LILIN was the first Taiwanese manufacturer to invest in a U.K. subsidiary, although Japanese consumer brands such as JVC, Sony and Panasonic had already been in place for 20 years or more. My first experience working for a CCTV manufacturer was with a leading Japanese lens producer Computar (CBC). I remember being overwhelmed by the sheer number of products that it had in the lens rangethe many different formats, focal lengths, f-stops and camera mounts. I am sure that it still produces a comprehensive selection, but expect that much of its sales volume is now generated by a handful of varifocal lenses.

That demonstrates one of the key changes to the U.K. marketplaceability of modern equipment to incorporate many functions previously offered by individual components and the rationalization of product ranges as a result. As size of product range being offered by each manufacturer decreases, it leads to increasing competition for each part of that range, creating more downward pressure on prices.

End User Needs

The current estimates for the U.K. CCTV market value (end-user prices) is US$1.1 billion, up from $630 million in the early 1990s; future growth, however, is predicted to be negligible. Although there is still demand for new systems and upgrades, equipment value is dropping at the same rate, producing a flat market.

The typical end user in the U.K. is not shy of modern technology and generally has high expectations of system performance. End users are beginning to focus less on details of technical specifications- -often rife with complex jargon and confusing terminologyand focusing more on system performance and functionality. There is now a given assumption that modern CCTV equipment will be reliable, high-resolution and capable of producing good video images under a wide range of circumstances. Becoming more important is system flexibility and ease of location of recordings as well as ability to monitor and control from multiple locations and remotely from anywhere in the world.

The modern DVR is now seen by the end user as the heart of the CCTV system, with cameras and domes considered simply as accessories that are bolted onto the core system, their individual performance and specification becoming less important than overall performance as seen through the DVR.

Future Focus

To be successful in the future, manufacturers will have to learn what the British end user really wants, rather than focusing on narrow performance specifications or simply matching competitor offerings; they must understand what features are driving the decision process. CCTV is no longer merely a grudge purchase bought after an incident or at the request of an insurer; it has now become an intrinsic part of a companyˇs IT solution, capable of delivering useful data to improve operational performance, reduce risks and control environments. End users expect to be able to integrate these systems into their networks and systems; they expect seamless system control and simple operation. If the system cannot deliver the solution in terms of information, then the system does not satisfy their requirements.

Developers are responding to this trend; we are making our equipment more user-friendly, offering more intuitive control interfaces like IR remotes and Web browserbased monitoring and control. We are even working with mobile phone operators for 3-G solutions. There are, however, a tremendous number of opportunities available for us to explore, even in a market as mature as ours.

Perhaps, the U.K.ˇs largest potential lies in domestic CCTVssystems for your home and mine. The unique British acceptance of surveillance, combined with an appetite for new technology and a rising fear of crime may lead to a significant new market opening in the next few years. Being successful will require entirely new strategies from existing CCTV manufacturers; many will be unable to produce the equipment cheaply enough or establish the new type of sales channels necessary for retail-style sales. Those that do rise to the challenge could be reaping large rewards in the years to come. 
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