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Smart Home Surveillance Camera Market Movers are coming into View

by Jack Narcotta | Apr 17, 2018

Smart home surveillance cameras are fast-approaching the mainstream consumer mindset, priming this market for steady annual growth through 2023. Platform companies such as Amazon and Google, independent camera manufacturers such as Netgear, D-Link, and Zmodo, and security service providers such as ADT, Alarm.com, Comcast, Hive, and Vivint are taking the reins of this segment.

In ways unique to each of these companies but with common threads of software and services woven among them, they will be among the strongest engines of market growth, with their go-to-market strategies, technology roadmaps, and partnerships and acquisitions. These companies will be among the leaders in a market that, according to Smart Home Strategies’ recently published Global Smart Home Surveillance Camera Market Forecast: 2012 to 2023, will surpass $9.7 billion by 2023, growing at 9.1% CAGR over next five years. Video doorbells, a cousin form factor of the more traditional mountable Wi-Fi cameras common today, will be the fastest growing segment over the next five years as the front door moves front-and-center for customers and companies alike.

Even with this market forecasted to eclipse $7 billion by the end of 2018, Strategy Analytics believes the market is still in the early stages of growth. New vendors, especially those with ties to China’s consumer market, appear on the landscape seemingly every day. As more competitors enter this arena, camera prices are beginning to fall, and yet in contrast to this trend, camera performance and specifications continue to improve.

As a result, consumers are getting better cameras at lower price points. Camera shipments are climbing. Companies’ camera businesses are growing larger. This should be a win-win, right?

However, while consumers have more camera options to choose from than in the past, a different story is unfolding for vendors. It’s becoming more difficult for vendors to differentiate their cameras due to the number of competitors seeking a share of this market, especially in crowded entry-level ($50 and less) and midrange ($51 to $100) price bands. There’s more elbow room in premium ($101 to $300) and professional-grade consumer ($301 and up) price bands due to fewer competitors, but heavyweights such as Amazon and Google pose stout challenges for other companies that manufacture or distribute higher-end cameras.

A look into a cross segment of the smart home surveillance camera market, such Strategy Analytics’ recently published Smart Home Surveillance Camera Database which collates purchase prices across the four price bands mentioned above, as well as the “speeds and feeds” of nearly 160 smart home surveillance cameras and 19 video doorbells, shows how crowded and similar products in this market are.

The only difference in some cameras, especially in the entry-level, is the label on the camera, as the same device is made for multiple vendors by a contract manufacturer. Some cameras priced around $80, such as those from EZVIZ or Zmodo, tout similar specifications and features as those costing twice as much because those companies have high-volume, low-cost manufacturing capability and large stables of intellectual property.

So how are leading vendors and other influencers separating themselves from the pack? The low-price game is high risk, low reward for nearly any company not named Amazon or Google. Brute forcing unit shipment volume is a losing proposition over the long term for most companies, so leading companies are turning to software as a primary differentiator.

Over next few years, Strategy Analytics believes artificial intelligence and how vendors choose to integrate it into their smart home surveillance cameras and video doorbells will become one of the primary differentiators. This trend is detailed in Strategy Analytics’ recently published Smart Home Surveillance Camera Market Analysis and Forecast, which explains how leading companies are pivoting away from focusing on hardware specifications. Companies leading this market are creating differentiators based on software and services, led by ongoing efforts in facial recognition, object tracking, and contextual notifications. The report also details Strategy Analytics’ assessment of market trends, analysis of the competitive landscape, and market forecasts of consumer spending and unit sales by device type and price band through 2023.

For those companies choosing to pursue, at the very least, a balance between their hardware and software portfolios, they will solicit customer feedback and integrate that into their offerings, ensuring their company’s value proposition stays aligned with their customers’ needs. For companies focused primarily on differentiating themselves through hardware and hesitant to invest in software or services, their road will be a tougher, steeper climb.

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