Video Surveillance Vendors Will Face Further Challenges In 2019

Video surveillance equipment vendors report their 2018 revenue data to IHS Markit in the first quarter of 2019, which is when we calculate the rate the professional video surveillance market grew in 2018. However, we expect this rate will have been around 10 percent globally -- slightly higher than the 9.3 percent growth in 2017 and much higher than the 3.9 percent growth in 2016.

Changing Market Trends

Despite this healthy rate of growth, 2018 was not without its challenges and surprises. Challenges included continued price erosion, cyber-security attacks on video surveillance equipment, component shortages and increased barriers to international trade. Surprises included the US Government banning the use of products from Hikvision and Dahua (the two largest global vendors of video surveillance equipment) in its own installations and the entry of new vendors like Motorola Solutions and Amazon into the video surveillance market.

The effects of these trends and surprises is likely to reverberate through 2019 and beyond. Increased tariffs and other barriers to international trade, banning vendors, and potential changes in the product mix could cause average prices to rise. Larger vendors offering fresh solutions, and new ways to acquire those solutions, could affect traditional industry sales models and cause market disruption.

Competitive Supply Base

While the currently strong market growth rate offers big opportunities, vendors must move with the times, since fortunes can change quickly. Hikvision, Dahua and Axis Communications were the world’s largest video surveillance vendors in 2017. However, just ten years ago, the market was led by Panasonic, Pelco and Bosch.

The professional video surveillance supply base remains highly competitive, and there are many vendors with lofty ambitions. In 2019, we can expect to see some vendors decline in the market, or even disappear altogether, as other vendors take the lead in shaping the industry’s longer-term direction.