China’s Surveillance Market to Reach $11.4 Billion by 2015

Propelled by government support, China’s video surveillance market is continuing to undergo rapid growth as it transitions from traditional analog and black-and-white cameras to more advanced features such as digital, intelligent and networked technology, leading to a near doubling in revenue for this seg- ment from 2010 to 2015.China’s video surveillance video market will reach $11.4 billion in revenue in 2015, up from $6.5 bil- lion in 2010, as shown in Figure 5, according to a new IHS iSuppli China Research report from informa- tion and analysis provider IHS.

The demand for surveillance is growing rapidly in a number of new areas, such as education, health, sports, energy, telecommunications and industrial enterprises. At the same time, demand for surveillance in communities and residential applications is heating up. The market is gradually extending from the cit- ies to rural areas, and from the coastal areas to middle-west regions and the borders.

Government spending on security decreased somewhat after peaking during the World Expo 2010 in Shanghai and the Shenzhen 2011 Summer Universiade in the southern part of the country. However, several Chinese government initiatives, including “Safe Cities,” “Digital Cities” and “3111 Projects,” still involve extensive deployment of surveillance equipment.

Move to Higher-End Equipment
As China’s video surveillance industry moves toward intelligent, networked and digital products, Internet protocol (IP) cameras, megapixel cameras, high-definition (HD) digital video recorders (DVRs) and networked video recorders (NVRs) will become the focus and new direction of the technology in the industry, IHS believes. Video surveillance cameras, in particular, are making a major transition toward offering high-definition resolution.

The surveillance technologies are being enabled by several key semiconductors, including digital sig- nal processors (DSPs), application-specific integrated circuits (ASICs), systems on chips (SoCs) integrated circuits, GPS devices, and charge coupled devices (CCDs) together with CMOS sensors.

Midpriced and high-end products also are becoming available at more competitive pricing, which would further promote the expansion of China’s video surveillance market during the next five years.

Residential Safety
With a 15.8 percent market share, the residential area was the largest video surveillance product sec- tor in China in 2011.

The transportation sector is second, increasing to 14.8 percent in 2011, up from 10.6 percent in 2010. This area largely consists of cameras used for monitoring vehicle traffic, high-speed roads and railways.

Criminal Activity on DVR
In the video surveillance market, digital video recorders (DVRs) are one of the most stable and steady markets with a more than 40 percent market share. DVRs are migrating toward high-definition and networking capabilities. The leading companies in the surveillance DVR segment, Hikvision and Dahua Tech, command a nearly 60 percent market share and are set to remain the leaders for at least the next two years.

However, DVRs are facing rising competition from high-end cameras. By enhancing compression algorithms and facilitating centralization, the camera industry will surpass DVR to take the lead in the video surveillance market.

Initially dominating the analog surveillance camera market were foreign firms Sony Corp., LG Elec- tronics, Panasonic Corp. and Samsung Electronics Co. Ltd.. But with the transition from analog cameras to digital, domestic Chinese companies now are able to compete with international firms in order to gar- ner greater market share. More than 400 domestic companies have the capability to produce megapixel digital cameras, 60 percent of them based in the highly industrialized southern province of Guangdong, near Hong Kong.

Source: ISuppli

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