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Strengthen the position on the security market
Axis is the world-leading provider of network video solutions for professional installations. The products have considerable growth potential based on the ongoing technology shift from analog surveillance systems to network video solutions. Axis was ranked in fourth place among the world’s suppliers of security equipment and thus advanced two positions compared with the previous year.
Above all, the security market is being driven and developed by increased prosperity, urbanization and a general trend towards greater security consideration. The customers are mainly within the security sector, but are also found in other sectors where a need exists for remote monitoring and streamlining of business processes. The market is considered to have major growth potential. Apart from security installations, growth is anticipated within new fields of application and new customer segments for network video, for example, inventory management and measurements of customer behavior in the retail sector and remote monitoring within health care.
Business opportunities through legal requirements
Stricter legal requirements on camera surveillance within specific areas may also give rise to new business opportunities, for example if a public authority decides that dispensing counters for medicines or public dams should be monitored. Greater acceptance of surveillance cameras is another important driver of the market. The right to feel safe and secure is one of the most important basic principles in society. Axis products contribute to creating safety as well as security. To ensure that the products are not misused, Axis carefully selects its cooperation partners and resellers and provides continuous training.
As the established market leader within network video solutions, Axis is well-positioned to take advantage of the growth opportunities generated by the technology shift as well as new fields of application.
Positive trend on the security market The market research institute IMS Research* forecasts that the total market for video surveillance (CCTV), covering for example surveillance cameras, recording equipment and video encoders, will continue growing. The total market was estimated by IMS to be worth USD 8.2 billion in 2008 and is expected to grow to USD 13.3 billion by 2013. Axis is ranked fourth in the world in the IMS report among vendors providing video surveillance equipment, compared with sixth place in 2007 and eighth place in 2006.
From analog technology to network revolution
The market for surveillance equipment came into existence in the 1950s when the first analog cameras were installed. The products have been progressively developed since then. Analog cameras with color images were introduced in the 1970s and ten years later, the possibility of recording video sequences was developed. When the AXIS 200 network camera was released in 1996, a technology shift from analog to network video solutions began and Axis has been the market leader ever since.
The shift from analog to digital technology creates opportunities for a new way of thinking when a security system is to be installed. The many benefits of network cameras, for example, easy installation in networks, high image quality and flexible installation mean that the closed systems must gradually give way to open and fully integratable systems.
Global market leader
The interest in network video products continues to increase and these products currently account for approximately 20 percent of the new surveillance cameras sales globally. IMS estimates that the network video market is worth approximately USD 3.5 billion (figure for 2008). IMS Research ranks Axis in its report as the market leader within network cameras with an estimated market share of 31.2 percent. Axis has reached this position through solid know-how about products and solutions, well-established sales channels, good relationships with partners and a portfolio featuring innovative products.
Schools and health care have highest penetration
Schools and health care are the customer segments with the highest penetration of network video products. This is a logical consequence of the fact that installed networks often already exist in buildings where these types of operations are conducted. Other customer segments where network video has high penetration, approximately 25 percent according to the IMS report, are the transportation sector and government. The segments showing the lowest rate of network video installation are private housing and the banking sector.
The shift is progressing
The general financial turmoil during the year meant that some customers deferred decisions regarding installations, which has affected the rate of the shift from analog to network technology. According to IMS Research, network cameras are expected to account for between 40 and 50 percent of total new camera sales by 2014. In its report, IMS Research estimates global growth of 28 percent for network video in the coming year (2010), an assessment that Axis considers too optimistic in the prevailing market climate.
Competitors
The interest for network video products rose during the year, which has also led to a gradual increase in competition. Axis’ largest competitors are still manufacturers of traditional, analog cameras. The dominant manufacturers of analog cameras are global players such as Panasonic (PSS) and Pelco, which occupy first and second places respectively in the global ranking for surveillance cameras in the IMS report. Sony and Panasonic (PCC) are examples of competitors offering network cameras, and are ranked after Axis on the global list of network video providers. All in all, it is estimated that there are around 250 different brands worldwide within the field of network cameras.
Market shares for network cameras, 2008
| Rank | Supplier | Share |
| 1. | Axis Communications | 31,2 % |
| 2. | Sony | |
| 3. | Panasonic (PCC) | |
| 4. | Mobotix | |
| 5. | Panasonic (PSS) |
Market shares for security cameras, 2008
| Rank | Supplier |
| 1. | Panasonic (PSS) |
| 2. | Pelco |
| 3. | Axis Communications |
| 4. | Bosch Security Systems |
| 5. | Sony |
Market shares for video surveillance equipment, 2008
| Rank | Supplier |
| 1. | Panasonic (PSS) |
| 2. | Pelco |
| 3. | Bosch Security Systems |
| 4. | Axis Communications |
| 5. | Honeywell |
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