High Growth Of Surveillance Market Cannot Sustain All Manufacturers

High growth of surveillance market cannot sustain all manufacturers

Despite high growth in the video surveillance market, Memoori’s Jim McHale says that it is simply not enough to sustain all of the industry’s camera manufacturers. World demand for video surveillance is strong but it is skewed by high demand in China and Asia, where local products dominate. Demand in developed markets is running at about half the rate.

As a result of these factors, a very significant number of manufacturers are falling below the minimum economic size to operate efficiently and cannot finance from cash flow the ever-increasing cost of developing cutting-edge products and heavy marketing costs.

New investment would be the best solution for those with promising products provided they have time to negotiate a satisfactory deal. Merger is more practical, but it requires a strong synergy and little product and/or geographic overlap if the union is going to be successful.

Consolidation would improve the performance of the industry but our analysis over the last 14 years detailed in our report – “ The Physical Security Business in 2013 ” – shows that the value of M&A deals across the physical security manufacturing industry has fallen. […]

Source: securityinfowatch.com
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