Security Camera Demand to Increase 7.2 Percent Annually Through 2021

According to a new Freedonia Group study, security cameras accounted for half of all 2016 video surveillance system sales.

Security Camera Demand to Increase 7.2 Percent Annually Through 2021

In 2016, dome cameras made up 42 percent of video surveillance camera demand.

Security cameras accounted for approximately half of all video surveillance system sales in terms of value in 2016 and are forecast to represent 70% of additional total sales growth through 2021, according to a new report by Freedonia Group.

The research firm, based in Cleveland, further projects that demand for security cameras will increase 7.2% annually through 2021 to $2.8 billion.

Among market trends presented in Freedonia Group’s “Video Surveillance Equipment Market in the U.S.” study:

  • In 2016, dome cameras accounted for the largest share (42%) of video surveillance camera demand. Dome camera sales have benefited from developments over the past decade, such as increased durability and higher resolutions. This has allowed for broader use in both indoor and outdoor applications. Sales have also gained from the rising use of indoor security cameras, where domes remain highly popular due to discreet appearance.
  • Through 2021, sales of all video surveillance products are projected to increase 5.6% annually to $4.9 billion. Growth will be driven by the increasing affordability of feature-rich systems that incorporate enhanced capabilities. This trend is expected to expand the base of end users that choose to install video surveillance systems, as well as incentivize replacement and upgrade demand among existing users.

Numerous technological innovations across the video surveillance sector have added performance advantages and increased functionality, which spur end users to upgrade existing installations before their useful lifespans are over. The ongoing migration of legacy analog systems to IP-based systems is one such example.

Technology advances have also fueled mass market adoption as prices have come down for products such as IP-based thermal imaging cameras; enhanced HD analog cameras and recording equipment; and, video analytics technology used in conjunction with 360⁰ cameras that provide higher quality, dewarped images.

The continued downward pressure on margins is affecting how some manufacturers are positioning themselves in the market, Katherine Brink, a Freedonia Group industry analyst, tells SSI.

“A growing number of camera suppliers are focusing on not just the equipment, but rather providing an entire solution or making it easier for their customers to have greater flexibility in their video surveillance systems,” Brink says. “As the prices of more advanced equipment come down, the focus is increasingly on the related services and other additional components — such as software and storage — that the companies can provide to their customers.”

Even though other components will not see advances as rapid as those posted in the cameras segment, according to the research firm, growth opportunities exist in a variety areas. Freedonia’s study indicates the rising use of ultra-high definition cameras and recording equipment will support increasing sales of high quality, higher value monitors, such as 4K and 8K types, albeit from a small base. Sales of encoders will also see new opportunities as interest in HD analog systems grows.

Leery About Market Saturation

Among the video surveillance sector’s primary challenges going forward, Brink suggests market saturation is one to keep a close watch on.

Currently, the industry has been experiencing substantial growth as end users that may not have been willing to invest in video surveillance systems five years ago have decided the systems are now affordable enough to implement. At some point, however, the market will begin struggling to generate new demand for products.

Brink does not venture a time frame when the market will reach that point, but eventually the number of existing potential customers that believe a video surveillance systems is worth the investment will already have their purchases.

“For equipment manufacturers, upgrade sales to existing customers will become increasingly important as the market becomes more saturated,” Brink says. “Innovations that focus on providing solid benefits to customers has always been an important consideration in the industry, but I think it will play an even greater role going forward.”

The above article originally ran in Campus Safety’s sister publication Security Sales & Integration.

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