China accounts for nearly 1/3 of all physical security equipment sold in 2016 — IHS Markit
IHS Markit has released The Physical Security Equipment and Services Report 2017, which provides a combined analysis of the largest and most interesting markets within the IHS Markit portfolio on physical security, the company says. This fifth edition report presents a global overview of the physical security market by equipment, service, vertical and geographic region.
Overall, the global physical security equipment market was estimated to be worth $29.2 billion in 2016, a $1.6 billion (5.8 per cent) increase from 2015. Included in this estimate are the following equipment types: video surveillance, access control, intruder alarms, entrance control (pedestrian and vehicle), consumer video surveillance, mobile video and body worn cameras, and enterprise storage.
IHS Markit predicts that the world market for physical security equipment will grow at a compound annual growth rate (CAGR) of 7 per cent from 2016 to 2021. It is expected to reach $41.7 billion in 2021.
According to the report, China is estimated to be the largest market in 2016, accounting for 29 per cent of global revenues. It is expected to reach 38 per cent in 2021.
The majority of this growth is being driven by significant investment in video surveillance equipment, says IHS Markit. In 2016, China accounted for 42 per cent of the global video surveillance market. Significant investment by the Chinese government in safe cities projects, particularly focusing on traffic monitoring and city surveillance, will drive further growth in this market.
Additionally, as a result of the size of the Chinese market, the Asian government vertical was estimated to be almost twice the size of the Americas government vertical, and nearly three times the size of the EMEA (Europe, the Middle East, Africa) government vertical in 2016.
While the Asian market for banking and finance is estimated to be around three times the size of the equivalent Americas and EMEA region, as a proportion of their overall spend, the Americas and EMEA region spend significantly more on privately funded business verticals such as the commercial, retail and sports and leisure markets.
Meanwhile, the Americas region, where the United States accounts for 79 per cent of all physical security equipment revenue, is the largest residential market in the world. The U.S. leads the world in many aspects important to the residential market such as video penetration and smart home adoption.
Key trends driving this market include resolution quality improvements, advanced video content analytics and the growing adoption of cloud storage. A variety of new analytics continue to be developed and applied to video surveillance, the majority of which focus on refining what should and should not be recorded in order to save bandwidth and storage space. Motion detection, event recording, facial recognition and object awareness are a few of the technologies being applied in this regard.
Analysis of the leading companies involved in the physical security market shows that the top 10 equipment vendors in 2016 are the same as in 2015, and these companies are gaining market share over the rest of the market.
In 2015, the top 10 equipment manufacturers accounted for 35 per cent market share and in 2016 this increased to 37.7 per cent.
However, growth within the top 10 is being driven mainly by Chinese vendors Hikvision and Dahua Technology, which are ranked first and second.