The Exploding Market
Revenue from shipments of Internet Protocol (IP) video surveillance cameras nearly doubled in 2005, and will continue to grow at a Compound Annual Growth Rate (CAGR) of 87.9 percent from 2004 to 2010, to reach US$3.9 Billion. By the end of 2009, the worldwide IP surveillance camera market will grow larger than the conventional Closed Circuit Television (CCTV) camera segment. Meanwhile, the market for IP surveillance servers is expected to expand to US$1.3 billion in 2010. The exploding market for IP video surveillance cameras and servers will generate nearly a US$1 billion opportunity for semiconductors in 2010. Semiconductor technologies are enabling dramatic new features in IP video surveillance cameras and servers. The market for such semiconductors will grow in parallel with rising sales of IP video equipment.
Trend to IP Camera
Cameras are transitioning to digital, with manufacturers making smarter cameras with image recognition, image tracking, and response and alert systems. Adoption of IP cameras is perhaps the most significant trend in video surveillance. IP Cameras enable remote monitoring, lower cost installation, and centralized storage and backup. Further, IP video surveillance systems enable broader system-level integration with industry specific solutions for public safety, traffic control, industrial, retail, education, and consumer applications. These trends position the IP camera market for dramatic growth over the next five years.
Impacts Worth Noting
The trend to IP cameras and IP camera networks has significant impacts on the broader surveillance market, and promises to create new opportunities for both equipment manufacturers and other technology providers. The implications of IP Video surveillance include:
Remote monitoring and control of IP video streams not only allows security staff monitor and respond to the video from nearly anywhere in the world, but also enables centralization of monitoring staff, equipment, and maintenance.
Networked IP cameras enable new software applications to route video based on intelligent criteria, and to analyze and respond to the video content autonomously.
“Smart cameras” enabled by powerful Digital Signal Processors (DSPs), can perform threat detection, and trigger automatic responses, including alerting security personnel with emails to computers, or cell phones.
Allow increased use of industry standard IP networking and storage equipment, lowering costs of both equipment and installation
Lucrative Opportunities Arising
While IP cameras mark the critical trend in new camera shipments, the installed base is made up of millions of analog cameras. “IP servers” or “streamers” act as a bridge between analog cameras and an IP network. IP servers often have multiple channels of analog video input, which is digitized, analyzed, compressed and relayed to the IP network. Both IP cameras and IP servers promise to be a lucrative opportunity for DSPs, related support logic and Interface chips, including Ethernet and WiFi. The software applications that sit on top of these cameras will provide significant opportunity for camera and security systems manufacturers to develop innovative new features, both at the camera level and at the network level.
Chip Technology Reshapes Video Surveillance
An IP camera typically integrates video capture, video encoding/processing and network interface functions. Thus, video signal processor chips that support these functions are among the most differentiated and lucrative semiconductor opportunities in the video surveillance market. There is substantial variation in requirements for video signal processors, ranging from minimal needs at the low end, to high-performance multi-core DSPs at the high end.
DSPs Take on the High-end of the Market
High-performance DSPs represent the premium end of the video processor market. These DSPs are the key enablers of smart cameras. They also endow IP video servers with the capability to intelligently manage multiple simultaneous video streams.
Texas Instruments Inc.’s TMS320DM640 family targets this segment, as well as the company’s forthcoming DaVinci series of processors. At the very high-end of the spectrum is Cradle Technologies’s multiprocessor DSP.
The high-end of the camera/server market also provides opportunities for additional coprocessors beyond video signal processors, such as general-purpose processors, FPGAs and ASICs. Because these systems are more complex and demanding, as well as less cost-sensitive than low-end products, they often support additional features such as on-board storage or other system-level interfaces. Finally, IP servers and high-end IP cameras may also have embedded storage, either in the form of a hard-disk drives or removable flash memory cards.
A variety of applications are emerging to leverage the powerful DSPs found in digital surveillance cameras. Object recognition is among the more obvious applications.
With the capability to process the video and recognize specific objects and motion, cameras can be programmed for active responses. For example, the camera can preserve storage space by not recording, or recording at a low resolution, until an event triggers it.
Image Sensors Are Everything
Surveillance cameras also are making a gradual transition toward CMOS image sensors and away from traditional Charge-Coupled Devices (CCDs). Each type of image sensor has advantages and disadvantages, but over time, the shortcomings of CMOS image sensors are decreasing. Some unique sensor solutions, such as those from Pixim Inc., target the needs of video surveillance directly by focusing on low-light and high-resolution requirements.
Other technology trends in the surveillance camera market include a migration from motion JPEG to MPEG4, the adoption of 802.11 in some segments and support for power over Ethernet. Beyond video processing, image sensing and connectivity options, analog and power semiconductors also will find a growing market in IP surveillance cameras.
Taking More of the Pie
The broader worldwide market for total video surveillance equipment market is approaching US$7 billion, with strong top-line growth driven by end-user demand. Pricing of equipment continues to be under pressure, but offset by faster unit growth to drive revenue up. IP video surveillance equipment is a relatively small segment of the overall market, but growing dramatically.
On a regional basis, the IP video surveillance market is seeing particularly strong growth in Asia Pacific and the Americas, which each represent over 30% of the market. EMEA is growing rapidly as well. While the commercial and government market dominates the segment, we see growth accelerating for the next couple years as a small consumer market emerges driving units and revenue. This trend will also favor North America, where home networking is strong. In the out years, growth slows slightly as the IP segment becomes the more significant percentage of the total surveillance equipment market. Overall, we expect the Americas market to be the largest segment of the IP video surveillance camera market at nearly US$2.7B in 2010.
Mark Kirstein is Vice President of Multimedia Content and Services for iSuppli (www.isuppli.com), a leading market research firm.
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