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Researchandmarkets

Global physical security demand to reach $56.7bn by 2024, driven by AI

960 640 Stuart O'Brien

The total value of world production of Physical Security products at factory gate prices in 2019 was $34.3Bn, an increase of 8.5% on 2018 and equivalent to a compound annual growth rate (CAGR) over the last 5 years of 7.24%.

According to a report from ResearchandMarkets, over the last 10 years, the market has grown by a CAGR of 6.27%. However, different rates of growth apply in each of the three key segments (Access Control, Video Surveillance, Intruder Alarm / Perimeter Protection) and geographic territories. It forecasts the total market will reach $56.76Bn in 2024.

Key report findings include:-

  • China has increased its market share this year but still has a market penetration of 50% less than North America, based on sales per capita. The Chinese market has grown rapidly through a boom in new construction and Safe City projects in the public sector. However very little of this vast expanding market has been of benefit to overseas manufacturers. The report shows that the problem for overseas manufacturers getting a piece of the China market is not about technology or performance, at its core it is a geopolitical challenge.
  • In 2019, AI Technology applied to Video Surveillance has convinced the market that by 2020 it will become mainstream. Significant improvements in AI Video Analytics software is making this possible and over the next 10 years it will become a standard requirement across Video Surveillance solutions. There is a critical need to make full use of the massive amounts of data being generated by video surveillance cameras and AI-based solutions are the only practical answer. Modern chip architecture with AI software can comb through vast volumes of data and boost security and safety. Th reports says there is a lot of development in this field that we are yet to see, but the path towards AI seems quite clear.
  • The supply structure and the competitive landscape will continue to change over the next few years and the main driver for this is the Internet of Things (IoT). Physical Security systems generate vast amounts of information that when analyzed together with data from other Building Automation Systems can deliver intelligence that will improve the security, safety and performance of buildings and the business enterprise within.

Demand structure in the video surveillance business is unbalanced because of the Chinese market. The main reason is that the government has some control over even private video surveillance manufacturing companies. If these companies want public sector business (which today accounts 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 Chinese 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 two 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 Safe City projects. Huawei, one of the world’s largest communication companies, has 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 present incumbents, and this could at least reduce the pressure on non-Chinese manufacturers operating in the more open world market.

In terms of macro trends:-

  • Access control is expected to deliver a slightly higher growth than the 8.2% report has estimated, as it further expanded 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.
  • M&A data collected over the last 18 years shows that the Physical Security industry, has gone through 4 cycles of increase and decline in the value of activity, sometimes exaggerated by a number of billion dollar deals in one year. In 2019 the value of mergers and acquisitions fell to $2.913Bn a reduction of approximately 12% on the 2018 adjusted value.
  • Since January 2018, about 75 new entrants have gained VC Investment of approx. $900 million for Physical Security solutions in commercial and industrial buildings. This excludes 2 of the major investments made in Megvii and OpenAI claiming $1.75 billion.

Value of Physical Security products at factory gate prices reached $34.3Bn in 2019

960 640 Stuart O'Brien

The total value of world production of Physical Security products at factory gate prices in 2019 was $34.3Bn, an increase of 8.5% on 2018 whist the compound annual growth rate (CAGR) over the last 5 years has been 7.24%.

Over the last 10 years, the market has grown by a CAGR of 6.27%, however, different rates of growth apply in each of the 3 businesses (Access Control, Video Surveillance, Intruder Alarm / Perimeter Protection) and geographic territories.

A new new report from ResearchAndMarkets also forecasts the market will reach $56.76Bn in 2024.

Other key findings include:-

  • China has increased its market share this year but still has a market penetration of 50% less than North America, based on sales per capita. The Chinese market has grown rapidly through a boom in new construction and Safe City projects in the public sector. However, very little of this vast expanding market has been of benefit to overseas manufacturers. The report shows that the problem for overseas manufacturers getting a piece of the China market is not about technology or performance, at its core it is a geopolitical challenge. 
  • In 2019, AI Technology applied to Video Surveillance has convinced the market that by 2020 it will become mainstream. Significant improvements in AI Video Analytics software is making this possible and over the next 10 years it will become a standard requirement across Video Surveillance solutions. There is a critical need to make full use of the massive amounts of data being generated by video surveillance cameras and AI-based solutions are the only practical answer. Modern chip architecture with AI software can comb through vast volumes of data and boost security and safety. Granted, there is a lot of development in this field that we are yet to see, but the path towards AI seems quite clear. 
  • The supply structure and the competitive landscape will continue to change over the next few years and the main driver for this is the Internet of Things (IoT). Physical Security systems generate vast amounts of information that when analyzed together with data from other Building Automation Systems can deliver intelligence that will improve the security, safety and performance of buildings and the business enterprise within.

In addition, ResearchAndMarkets says demand structure in the video surveillance business is unbalanced because of the Chinese market. The main reason is that the government has some control over even private video surveillance manufacturing companies. If these companies want public sector business (which today accounts 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 two major Chinese manufactures to build up a market share of 40% of the world’s 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 Safe City 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.

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

Video surveillance system market to hit $96bn by 2024

960 640 Stuart O'Brien

The global video surveillance system market has been valued at $40.37bn in 2018, and is expected to reach a value of $95.98 billion by 2024, equivalent to a CAGR of 15.53% over the forecast period.

A new report by ResearchandMarkets says use of video surveillance in business is growing significantly, owing to the increasing need for physical security, coupled with the use of cloud-based services for centralised data.

The firm says video surveillance is primarily adopted in manufacturing, banking & financial services, and transportation and retail industries.

This incorporation is higher in countries, such as the United States, the United Kingdom, China, and Brazil, owing to the large size of the concerned industries and higher awareness among consumers.

Globally, the drive to enhance the safety and security across different industries is adding to the market growth. With rapid developments in cloud computing and video surveillance software, the surveillance market has transformed, in comparison to the previous decade.

VSaaS has been increasing over the recent years, owing to the market penetration of IP camera sales. Significant factors, such as IT cost containment by major IT organizations, the emergence of data centers, and improving functionalities associated with centralized data, are aiding the VSaaS segment.

ResearchandMarkets say the growth of the video surveillance market is expected to be fueled by the introduction of new IP-based digital technologies, to detect and prevent undesirable behaviours, such as shoplifting, thefts, vandalism, and terror attacks.

Image by Peggy und Marco Lachmann-Anke from Pixabay 

Physical security demand to hit $119bn by 2023

960 640 Stuart O'Brien

It’s been predicted that the global physical security market will to grow in value from $84.1 billion last year to $119.4 billion by 2023.

That’s equivalent to a Compound Annual Growth Rate (CAGR) of 7.3%, according to analysis from ResearchandMarkets.

Its report, The ‘Physical Security Market by Component and Services, Organisation Size, Vertical and Region – Global Forecast to 2023’ found that (deep breath) rising incidents of terror attacks, technological advancements and deployment of wireless technology in security systems, increasing use of IP-based cameras for video surveillance, implementation of mobile-based access control, and adoption of Internet of Things (IoT)-based security systems with cloud computing platforms are projected to drive the growth of the market across the globe.

However, violation of privacy related to physical security systems and services is expected to restrict the growth of the market across the globe in some instances.

The Services segment is projected to lead the physical security market during the forecast period. The report says physical security services play a vital role in enhancing the existing video surveillance system by integrating digital video surveillance with network and IT systems.

This integration enhances property safety and reduces loss from thefts. Moreover, the service segment is being continuously affected by the introduction of the integrated Social, Mobile, Analytics, and Cloud (SMAC) solution, which need proper monitoring.

The Large Enterprises segment is expected to lead the physical security market in 2018. These enterprises were the early adopters of physical security solutions and services, as they have larger revenue pool to spend and a larger infrastructure to be protected.

High spending on security, followed by the high need for securing large assets is leading large enterprises to contribute to a higher market share in the physical security market.

The residential segment faces the challenge to manage security without violating the privacy of their guests, comfort, and travel experiences. In residential premises, the implementation of access control and video surveillance security systems is growing.

The residential properties are installing access control systems to prevent invasion and burglary. Residential properties are increasingly adopting electronic lock-based access control systems. The demand for electronic products is growing with the increased home automation trend.

The APAC physical security market is projected to grow at the highest CAGR during the forecast period. This growth is primarily driven by the rising adoption of access control systems in Small and Medium-sized Enterprises (SMEs), hospitality businesses, airports, ATMs, banks, residential buildings, and religious places, among others are expected to drive the physical security market.

Security systems are expected to witness increasing adoption in APAC as the countries in the region are emerging economies with a growing number of manufacturing bases, and there is also a constant risk of terror threats in the region.