Omdia reports global video surveillance market revenues to reach $24bn by 2022

According to Omdia’s latest Video Surveillance and Analytics Intelligence Database, global video surveillance market revenues are set to reach $24bn by the end of 2021.

This marks a quick recovery for the video surveillance market as demand that was suppressed in 2020 looks set to return and revenues will be bolstered by projects that were postponed in 2020 getting the greenlight in 2021. Omdia forecasts that total video surveillance market revenues will grow to $31.9bn by 2025 with a total CAGR of 7.1% between 2020-2025.

Thermal body temperature solutions – Growth driver and inhibitor

The size of the thermal body temperature solutions market has rapidly grown to $1.3bn globally in 2020. Driven by COVID-19 precautions, this technology has been adopted by several regions, in particular China, East Asia, India and the Middle East. However, without the growth in thermal body temperature solutions, the global video surveillance equipment market declined 3.8% globally in 2020.

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Despite being a driving growth factor in 2020, Omdia forecasts the thermal body temperature solutions market will decline rapidly in 2021 to just $137 million, an 89.8% decline, ultimately limiting overall video market surveillance market growth.

Geopolitics, supply chain constraints, and AI developments increasing average selling prices

Omdia expects average selling prices of video surveillance equipment to increase in the short term as US-China geopolitical tension and supply chain constraints from the COVID-19 pandemic increases pressure of vendor margins.

In recent years US-China geopolitical tensions within the video surveillance industry have escalated. The initial NDAA and blacklisting of certain vendors within the US is being augmented by new FCC regulations.

Oliver Philippou, Research Manager – Physical Security at Omdia commented: “The semiconductor shortfall driven by geopolitics and COVID impact has affect all industries, and video surveillance is no expectation. This disparity between supply and demand is expected to last until mid-2022.

Longer term, Omdia expects that there will be a greater adoption of the network camera products using AI deep learning acceleration and inference at the endpoint. This will result in higher average prices of network cameras.

Chinese impact on global market revenues

The Chinese video surveillance market is estimated to have grown 6.4% in 2020 compared to the global average of 2.2%. This growth is mainly attributed to the thermal body temperature solution. The market excluding such solutions is estimated to have declined by 0.8%. As such, China now accounts for 50% of the global market revenues. However, a combination of COVID-19 and the completion of the Xue Liang program has resulted in declining government investment in video surveillance in China. Even so, the Government investment will continue grow, all be it at a slower rate.

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What is the Xue Liang programme?

The Xue Liang programme – translated as ‘Sharp Eyes’ – has been designed to connect the security cameras in China that already scan roads, shopping malls and transport hubs with private cameras, integrating them into one nationwide, centralised data-sharing platform. Facial recognition and AI have been utilised to help analyse the incoming video evidence – all of which is designed to help prevent crime, improve safety and monitor the activities of its population, according to a report from the Washington Post in 2018.

The programme is also said to “rank the trustworthiness of citizens”, with cameras and facial recognition having been rolled out nationwide to support the government’s efforts to cross-reference with photos on ID cards.

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Tommy Zhu, Senior Analyst – Physical Security at Omdia commented: “One of the major factors that drove China’s market growth in the past few years was government investment. Although the year of 2020 marks the completion of the Xue Liang program, the Government will continue to enhance the construction of ‘Safe China’ during its 14th Five-Year plan. In addition, as China is rolling out its trillions of dollars investment in new infrastructure construction, the demand for video surveillance equipment is expected to continue to grow. China’s ambitions to accelerate the transformation to a digital economy will boost the investment in both public and private sectors.”