2016 was a year of fast-paced changes in the market for video surveillance, especially for higher-resolution and panoramic cameras. We spoke with Scott Schafer, Arecont Vision’s Executive Vice President, for his thoughts on 2016 and the year ahead.
SourceSecurity.com: Did your predictions for 2016 match up with what you thought back at the end of 2015? How has the intervening year changed the thoughts?
Scott Schafer: Looking back on our predictions for industry trends and directions for 2016, we anticipated most of the technology announcements but some were a little faster than we thought. Several more firms have entered the multi-sensor panoramic and multi-directional product sets that Arecont Vision pioneered 10 years ago. These copies may look similar to Arecont Vision designs but they are still first-generation offerings from these vendors. These firms have not done the product hardware, firmware, and software design and integration work that takes time and outstanding engineers to do. This has resulted in products that are much bulkier and harder to install from competitors in this market space. New 4K products will make a substantial impact going forward for the industry, but the volume purchases are still in the 1080-5MP and 10MP platforms.
Pricing continues to be interesting. Many new entrants and established firms continue to release new low-cost products and lower the prices of their legacy products. This was expected.
On the channel changes that happened this year, we did not expect major combinations to happen, for example, Tyco and JCI. The great thing about it is that we enjoy very good relationships with both firms and are enthusiastic about our future partnerships. Similarly, Convergint made strategic acquisitions that will benefit their organization and the industry.
SourceSecurity.com: How did the overall economic impact of the security marketplace? What important trends did you see developing?
Schafer: The economy and currency changes had their biggest impact in Europe and the Middle East. I think both these regions will rebound in 2017-18. Pent-up demand for security systems by retailers, banks and governments will cause these markets to expand over the next three years.
Pent-up demand for security systems by retailers, banks and governments will cause these markets to expand over the next three years
SourceSecurity.com: What notable trends do you see playing out in the new year and what will be their impact? Who will be the “winners’ and who will be the “losers”?
Schafer: For manufacturers, companies with great, valuable technology will be the winners. Companies that depend on third-party platform designs and a low-cost price point for their success will not flourish. Low-price product providers have played an important role throughout the history of the security industry, but that position is not sustainable long-term. And their channel partners may get some upside in the short term, but they will be relegated to low-margin dollars and percentages on the low-price products. Selling low-price, low-margin products can cause firms to think they can make it up in volume, which of course only works in the short term. Low-price product selling can also diminish brand equity.
SourceSecurity.com: What have been Arecont Vision’s successes and challenges in 2016 and looking ahead to 2017?
Schafer: Arecont Vision continues to grow as a company. Our people have developed even faster than we predicted in sales, marketing, customer service, engineering, quality, and operations. It is truly amazing to see how far we have progressed as an organization. Our product line has matured as we released several unique, first-to-market, highly awarded products. In addition, we made strong moves to improve the performance (image quality, low light performance, compression, noise reduction) of our new products, and those improvements in technology can be pushed to many of our past-generation platforms. That’s right. Our new technology is capable of being downloaded too many of our earlier generation products. This is a value that many of our customers use to add additional performance in the form of software/firmware updates that are unique to Arecont Vision’s Field Programmable Gate Array (FPGA) architecture. That is real investment protection, the Arecont Vision way.
And “Made-in-the-USA” will continue to be a unique position that resonates globally, not just in the United States.
See the full coverage of 2016/2017 Review and Forecast articles here