According to many in the industry, the stranglehold that analog has held on small video surveillance installations soon may be released. Historically, small business owners have not invested in IP network video surveillance due to cost. Instead they often purchased pre-packaged analog camera and DVR kits available from security dealers and through popular security equipment catalogs.
Now, with prices dropping in network cameras and recorders -- and more dealers and integrators familiar with IP video surveillance installations -- industry manufacturers expect to see installations with smaller camera counts turning more to networked IP video solutions.
"Small camera count systems -- which we define as 16 cameras or less -- represent at least half of the surveillance cameras being sold in the world today," said Fredrik Nilsson, general manager of IP video surveillance products firm Axis Communications. "Within this small camera count market, more than 90 percent still uses analog technology. Think of all that coax cabling you see in small convenience stores, gas stations, banks, small offices and hotels."
Thomas R. Cook, the vice president of sales in North America for Samsung Techwin America, said that the small market is finally about to see the price flip that it needs in order to switch from analog to IP.
"The small retail business market has always been price driven more than any other market," said Cook. "We have seen since the inception of IP cameras a reduction of price, but not until this year, were the IP cameras equal -- and will be lower [priced] than -- a traditional analog solution. At this point we will see a rapid trend towards IP and its technology now that it is hitting the correct price point."
Cook noted a steady drop for the average MSRP of an IP camera from Samsung, noting that five years ago, the company didn't even offer IP cameras, and just two years ago the average MSRP for one of his firms' IP cameras would have been around $1,500, while today it's close to $700, and he expects that to drop to $500 within the next three months.
Willem Ryan, the senior product marketing manager for Bosch concurs with the steady decline in pricing for IP cameras, noting that "prices for standard definition IP cameras have been decreasing over the past five years by 10 percent or more." At the same time, the feature sets on these cameras have improved dramatically as the price has dropped.
"Today you get much more camera performance for your dollar," said Axis' Nilsson. "Case in point: today we can deliver an HDTV-quality camera with on-board SD card storage for less than $230 -- whereas the industry's first HDTV camera from Axis debuted at around $1,500 three years ago. This is typical for a high-tech market were prices drop quickly for products that remain the same, but prices can be kept flat while adding lots of new innovations that address customer needs."
Manufacturers have also smartly segmented their product lines in IP cameras, offering network camera varieties for high-end clients who need the fullest feature sets and also basic units for customers who need affordable options. Bosch is one such company that has pursued this strategy, introducing its "Advantage Line" last year. It's aimed at smaller applications (typically defined as less than 16 cameras), and Ryan said the cameras start at a MSRP of $380. What's unique about the down-market move of technology is that the cameras are offered not only in standard definition but also megapixel resolution, and the cameras include basic video analytics and a basic video management solution -- both of which are elements that customers seeking security solutions would have expected to buy separately years ago.
Besides price drops for the technology (or equivalent pricing for more feature-rich and higher-resolution technology), camera experts say that there are other factors at work. Bosch's Willem Ryan notes that edge storage can reshape the cost model. "The capacity to store sufficient amounts of data at the camera via SD card can help overcome the cost of a DVR in the analog and NVR in the IP world. Combined with free software like Bosch Video Client, this creates a very cost effective IP system for customers."