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security
technology market
shift analogue boxes
whilst their share of the
market declines.
Market Growth
by Sector & Region
The total value of world
production of products
at factory gate prices
in 2012 was $20.57
billion. Of this video
surveillance products
at $10 billion increased
their share to 49%,
access control at $4.8
billion took a 23.5% share and
intruder alarms at $5.77 billion
had a 27.5% share.
The developed markets of
North America and Europe are los-
ing market share to Asia and par-
ticularly China which will be the
largest single market before the end
of this decade. Asia has increased its
share to over 35% for all physical
security systems, whilst growth has
been much more modest in North
America and Western Europe with
an aggregate increase of 6 / 7% and
3.5% respectively over the last 3
years. This trend will continue well
into the next decade.
The measure of penetration
of physical security products in
any country is an important factor
with system integrators to develop
solutions that work across differ-
ent vertical markets that add value
not just for improving security but
to increase operating efficiencies.
Improved ROI through IP
IP networking products can
offer much more than analogue
when they are joined with other
building services and the business
enterprise and these additional
benefits for the end user have defi-
nitely increased demand because
they deliver a much improved
ROI. There is no reason why the
traditional distributor route can-
not deliver the same service but
most distributors have not seen
the need to change and prefer to
alliances. But the main driver is
that they are delivering products
and systems that are transforming
the security industry from a cost
centre to a cash generator.
The business has also benefit-
ted from IT and communications
and defence companies continued
foray into the security industry
leveraging their expertise in digital
technology and making serious
inroads into homeland security
and transport markets.
Manufacturers partnering
with system integrators
The second structural change that
has contributed to getting more
from seemingly less is that the
routes to market have changed
with system integrators now tak-
ing some 50% of all product sales.
Manufacturers are now partnering
IMF projections for the rate of
GDP growth across advanced
countries in 2012 is 1.4% whilst
the world market for physical se-
curity systems grew by 6% a mul-
tiple of approximately 4.3. Even
allowing for much higher rates of
growth in emerging and developed
economies this is much more than
a worthy performance particularly
for a mature industry.
The growth continues
It also masks the fact that video
surveillance achieved 11.8%, dou-
ble the rate of aggregate growth
for the industry and access control
7.2%. Variation in performance
across subsectors is even wider
with IP video surveillance topping
the performance charts at around
30%. How this was made possible
is one of the main themes in the
4th Edition of "The Physical Secu-
rity Market 2012" by Memoori.
The main reason that this sec-
tor has been able to prosper dur-
ing the worst trading conditions
for decades is that the structure of
the business has morphed not just
to compensate but to meet and
beat the challenge.
From cost centre
to a cash generator
The 2012 Annual Report shows
that both the middle strata and
small companies have both
increased the size of the market
and their share. The minnows are
taking on the sharks and winning,
both through the development
of leading edge products and
growth through acquisition and
ThePhysicalSecurityMarket2012report:
Continuous growth despite
harsh economic times
security industry restructures to meet new challenges
Memoori is now releasing "The Physical Security Mar-
ket 2012" giving a valuable insight into global indus-
try that is very much influenced by not only techno-
logical developments but also by global changes for
the business sphere in general.
Jim Machale, market analyst at Memoori, has
written a summary of the report for detektor, based
on interviews and actual events that took place
during 2012.
Fig 2.5
The penetration of
physical security products
is highest in North
America where GDP
per capita is forecast at
$49,340 and security
sales per capita $14.81.
In the EU(7) GDP
per Capita is projected
at $42,240 and secu-
rity sales per capita at
$11.5.
In China the GDP
per capita in 2012 is
projected at $6,120,
and sales per capita
was $2.4 showing that
the potential for future
growth is enormous.