Security

World Sales of Physical Security Products in 2019 was $34.3Bn but Global Demand is Unbalanced

Our new annual report shows that total value of world production of Physical Security products at factory gate prices in 2019 was $34.3Bn, an increase of 8.5%. Of the 3 product categories covered in the report, video surveillance had the highest rate of growth at 9.7% over the last 3 years and accounts for 56% of world sales. Western manufacturers have competed better against Chinese competition this year, but they still have little possibility of penetrating the Chinese public sector business. China is by far the largest single market probably accounting for 35 to 40% of world demand for video surveillance. Access control was expected to deliver slightly higher growth than the 8.2% we have estimated in 2019. It now accounts for 24% of word sales. It continues to expand the IP network business, advancing deeper into biometric, identity management, wireless locking systems and ACaaS. This would have been the 3rd consecutive year that it […]

Stay ahead of the pack

with the latest independent smart building research and thought leadership.

Have an account? Login

Subscribe Now for just $200 per year per user (just $17 USD per month) for Access to Quality Independent Smart Building Research & Analysis!

What Exactly Do you Get?

  • Access to Website Articles and Notes. Unlimited Access to the Library of over 1,700 Articles Spanning 10 Years.
  • 10% discount on ALL Memoori Research reports for Subscribers! So if you only buy ONE report you will get your subscription fee back!
  • Industry-leading Analysis Every Week, Direct to your Inbox.
  • AND Cancel at any time
Subscribe Now

Our new annual report shows that total value of world production of Physical Security products at factory gate prices in 2019 was $34.3Bn, an increase of 8.5%.

Of the 3 product categories covered in the report, video surveillance had the highest rate of growth at 9.7% over the last 3 years and accounts for 56% of world sales.

Western manufacturers have competed better against Chinese competition this year, but they still have little possibility of penetrating the Chinese public sector business. China is by far the largest single market probably accounting for 35 to 40% of world demand for video surveillance.

Access control was expected to deliver slightly higher growth than the 8.2% we have estimated in 2019. It now accounts for 24% of word sales. It continues to expand the IP network business, advancing deeper into biometric, identity management, wireless locking systems and ACaaS. This would have been the 3rd consecutive year that it turned in the highest rate of growth of the 3 businesses, but price pressures are starting to bite, partially through consolidation and weaknesses in the supply chain. This has reduced growth when measured by value.

16 Group A companies (those we believe have a physical security business over $1Bn sales) account for 67% of sales in 2019, continuing to grow their share at the expense of smaller companies. In Group B we identified 42 companies (3 more than last year) having sales of over $100m but less than $1billion and taking a 19.5% share of the business but 4.2% of the population of companies.

We discuss in the report that the problem for Western manufacturers getting a piece of the China market is not about technology or performance, at its core it is a geopolitical challenge.

Demand structure in the video surveillance business is unbalanced because of the Chinese market. The main reason is that the communist government has some control over even private video surveillance manufacturing companies. If these companies want public sector business (which today could account for more than 50% of the Chinese’s video surveillance market) and support with long term cheap loans, then they must comply with the states requirements.

For this the government ensures that foreign equipment will not be used on public sector projects. Not surprisingly this arrangement has distorted any possibility of “open trade” and further has allowed the 2 major Chinese manufactures to build up a market share of 40% of the worlds video camera business; in part by operating a “race to the bottom” by lowering prices that no other manufacturers could sustain because they don’t have the same volume of production.

However on the horizon are other Chinese companies that want a part of the massive investment in the public sector projects. Huawei, one of the world’s largest communication companies, have announced a major push into video cameras and an AI video analytics startup Megvii intends to offer complete video surveillance solutions.

They will eventually get established in the public sector market and take share from the 2 present incumbents, and this could at least reduce the pressure on non-Chinese manufacturers operating in the more open world market.

This article has been taken from the 11th edition of Memoori’s Annual Report “The Physical Security Business 2019 – 2024.

Most Popular Articles

Solaredge Technologies
Energy

SolarEdge Technologies Augments its Solar Energy Management Portfolio

This Research Note explores SolarEdge Technologies, a NASDAQ-listed firm headquartered in Israel with $3 billion in revenues, providing intelligent inverters for photovoltaic systems, primarily in the smart home sector. We examine recent acquisitions, funding, and product launches that augment the company’s software and product portfolio addressing real estate owners and operators in the commercial, industrial, […]

Nordomatic 2024 Map
Smart Buildings

Mapping the Strategic Direction of Nordomatic in Smart Buildings

In this Research Note, we explore the strategic direction of Nordomatic, the leading independent BMS systems integrator in Scandinavia. This Research Note examines the company’s strategic priorities in the smart commercial buildings space. through mapping M&A and investment activity to ascertain the growth ambitions of the business from 2019 to date. Founded in 1967 and headquartered in […]

Subscribe to the Newsletter & get all our Articles & Research Delivered Straight to your Inbox.

Please enter a valid email

Please enter your name

Please enter company name

By signing up you agree to our privacy policy