The MF estimated that the GDP growth rate of developed countries in 2012 was 1.4%, while the global market for physical security systems increased by 6%. Taking into account the higher economic growth rates of emerging and developed economies, especially for a mature industry, this is far more than a valuable performance. The area of ​​video surveillance grew by 11.8%, which is twice the overall growth rate of the industry, and the access control area increased by 7.2%. The performance changes in various segments have become more extensive, with the IP video surveillance industry ranking at the top of the list, about 30%.

Why Structural Changes Increased Demand For decades, the main reason why the security industry was able to thrive in the worst business environment was the change in the structure of the industry, which was not only a remedy, but also to meet and overcome challenges. .

Our 2012 annual report shows that the market size and share of SMEs have increased. With the growth of high-end products, acquisitions, and alliances, small businesses are competing with large companies and succeeding. But the main driver is that the products and systems they provide are transforming the security industry from a cost center to a money-making machine.

The industry also benefits from IT, communications and defense companies continuing to enter the security industry. They use their expertise in digital technology to enter the homeland security and transportation markets.

The second structural change is that with the system integrators currently occupying 50% of all product sales, the market course has changed. Manufacturers are now working with system integrators to develop solutions that add value to different vertical markets, not only to improve safety, but also to increase operational efficiency.

If you cooperate with other building services and companies, IP network products can provide far more capabilities than analog products. Because of the greatly improved return on investment, these additional advantages will undoubtedly increase demand. Traditional distributors are also able to provide the same services, but most dealers have not seen the need for change, and they prefer to replace analog devices when their market share declines.

Market Growth in Segments and Regions In 2012, the total value of globally produced products was approximately US$20.6 billion in ex-factory prices. Among them, the total value of video surveillance products was US$10 billion, its market share increased to 49%, the total value of access control products was US$4.8 billion, the market share was 23.5%, and the total value of intrusion alarm products was close to US$5.8 billion. The share is 27.5%.

The market share of developed markets in North America and Europe is gradually being occupied by Asia, especially the Chinese market, and China will become the largest single market before the end of the 1920s. The market share of all physical security systems in Asia has grown to over 35%, while the market growth in North America and Western Europe has been rather slow, with total growth in the last three years being 6%-7% and 3.5% respectively. This trend will continue until the next decade.

In any country, the penetration of physical security products is an important factor because it sets a benchmark for potential development and utilization. There is a huge potential demand in the global emerging markets. Manufacturers should currently develop these markets because their growth rate will be much higher than that of Western developed markets. For example, China's current market penetration rate is one-sixth that of the United States, but this was only one-tenth in 2011, indicating that the Chinese market is using this potential to grow rapidly.

North America's physical security products have the highest penetration rate, and their per capita GDP and per capita security product sales are expected to be US$49,340 and US$14.81, respectively. In EU countries, per capita GDP and per capita security product sales are expected to be US$42,240 and US$11.50, respectively.

In 2012, China’s per capita GDP and per capita sales are expected to be US$6,120 and US$2.40 respectively, indicating that the potential for future growth is enormous. The Chinese market is moving forward with the highest growth rate in the security industry, and its overall growth over the past five years has not slowed. However, despite the fact that its market penetration has increased by nearly 60% during this period, it is still far below the North American market, so there is still great potential to be exploited.

In other parts of Asia (including India), the market penetration rate is lower than China. Many of the countries in this group have a large population, such as India, Indonesia, the Philippines, and Vietnam, where their market penetration is as low as $2 per capita. However, Japan, Australia, South Korea, and Singapore have a much higher penetration rate in the security market, and are comparable to Western countries. Countries with long-term potential for development include India, Thailand, Indonesia and the Philippines.

Because Western markets have such a high penetration rate, it is necessary to open up new vertical markets, transition from analog systems to IP network systems, and continuously improve and increase the rate of return on investment to achieve growth.

Market Forecasts for the Next Five Years Our forecast for the next five years is based on the fact that the global trading environment has remained fairly stable and is gradually growing over the next four years.

We forecast a compound annual growth rate of 5% over the next five years. This prediction can be said to be quite optimistic because the European market will remain unchanged at best. However, since the economic slowdown at the end of 2007, the physical security market has grown at a compound annual growth rate of 2% during the five-year period of economic damage.

The security industry is currently in a relatively healthy state, and its product portfolio offers more attractive opportunities to help customers improve security. Together with the unstoppable growth of the IP video network and access control market, as well as management identification and verification, it will drive the market forward.

In addition, relatively new vertical markets and smart buildings are providing further growth opportunities. System integrators from the security industry are using PSIM and SAP platforms to provide a comprehensive system that not only integrates security and security systems, but also integrates Building and energy performance monitoring system. If these drivers do not meet expectations, we can rely on the BRIC countries and other emerging markets to continue to grow and transition to cloud-based systems.