JUST how many IP cameras are being installed out there in networkland? Are analog cameras headed for the scrap heap in a couple of years time or could they cling on for another 10 years? The answers are surprising and they suggest that while IP camera sales are increasing – with an acceleration in the last year – vast numbers of analog cameras are still being installed and the analog market is growing faster than ever.What’s most interesting is the fact that a huge minority of analog cameras are going onto networks via encoders – this means that cameras on networks are not only common, they’ll soon be in the majority. It’s an interesting finding suggesting that once IP cameras gives users what they want in terms of performance and price, they’ll immediately own close to half the market. Australia’s largest video surveillance wholesaler, Pacific Communications, is a case in point. Pacom’s Rob Rosa says IP camera sales are currently around 5 per cent of the company’s total camera sales but what’s most telling is that around 30-40 per cent of the remaining 95 per cent of Pacom’s cameras go out the door with an encoder/decoder. “The IP side of Pacific Communications’ business, particularly in major projects, is growing fast but what we are seeing is that analog cameras are often being sold as part of a hybrid IP solution (encoders or combination analogue/IP) or a true IP platform,” Rosa explains. “Having said that, the analogue side of the business is by no means dead and it continues to yield significant growth of around 12 per cent per annum,” he says. “This is not expected to change based on the fact many projects still require analogue cameras while many people prefer the quality of analog over that of IP. “Today, analog cameras also represent better value for money and in many cases are better suited to the many environmental conditions and other harsh lighting the typical variable conditions an external camera faces.”According to Rosa, the market is price sensitive and any quality IP camera is more expensive than an analogue equivalent. “If you take something like the Sony E473P which is a 540-line day night high resolution camera and put its functionality into a comparable IP product, you would be looking around 50-70 per cent more in terms of dollars,” Rosa says. “The cheaper IP cameras don’t put out anywhere near the same quality picture as the analogues.” Rosa says that another issue is installer and end user perceptions on IP which he says are very much skewed in terms of what they expect to see. “I don’t think that IP will overtake analogue cameras in the next 2-3 years,” Rosa insists. “Analogue is still around and will be for many more years unless some technological breakthrough makes it uneconomical to purchase analogues over IP cameras.“I firmly believe that IP sales will continue to grow but not at the rate that some companies are claiming they will,” Rosa says.These comments are supported by another major supplier who elected to remain anonymous. According to that company, only 1 per cent of its camera sales are IP, with 99 per cent being high quality analog cameras. But our contact stated that the company’s hybrid analog/IP solutions businesswere going gangbusters. “I still think the best solution now is quality IP platforms supported by the best analog cameras – this combination offers the best balance of flexible functionality and outright camera performance,” our contact claimed. “I do think that the clock is ticking and IP cameras will one day offer the same or better performance than analog, and at the right price,” he said. “It’s inevitable that IP cameras are the future – it’s already obvious to everyone that networked surveillance systems are the future of video surveillance and IP cameras will be part of that future.”Meanwhile over at Baxall Distribution, Paul Thompson and his crew are having a similar experience to Pacom’s people, with Thompson saying current IP sales are around 10 per cent with more enquiries being fielded for the technology than actual sales are being made. “The analog side of our business is still growing significantly, especially the cost conscious segments of the market like retail and small commercial – these are the areas that are strong for us at the moment and none of these users is aware of IP cameras and they are not considering them.”Thompson says Baxall’s IP gear is currently more expensive than its analog but he believes it won’t always be that way. And he explains that it can be hard to compare IP cameras and analog cameras given they are often expected to handle different tasks. “We actually have IP cameras at the same price as high end analogue gear that we believe offer more flexibilty and an image quality that provides the same level (or better) of resolution,” he says. “And I do think on current trends IP cameras will take over from analogue and ultimately they may have the lead in market share but not for quite some time.”Supporting Baxall’s experiences of significant market growth is Omega Power, whose marketing manager Aleksander Stefanovic says the company’s analog camera business is expanding at 55 per cent a year. These are big numbers that in part reflect Omega’s powerful position astride the wider electrical wholesaling market but even taking this into account, Omega’s success suggests the market is broadening as well as deepening.“At the moment we don’t carry IP cameras but we soon will and we expect to offer them at similar prices and with similar performance,” Stefanovic explains. Meanwhile, Merit Li-Lin’s Matthew Harvey says that Li-Lin is moving about 10 per cent IP to 90 per cent analog. According to Harvey, the market is waiting on higher performance but he says this performance is coming.“The IP camera market will grow a lot more when equivalent analogue cameras come out in their IP variants – products like our new Infrared Varifocal IP cameras,” Harvey says. “The knowledge of our CCTV industry needs to grow too, if IP cameras are going to catch up to the analogue market.”“It won’t be for a few years yet,” Harvey says. “Having said that the IP marketwill certainly keep on growing but there will be variables such as which analogue trends change.“Analog will not keep still and that means to meet analog performance in 2 years time IP may need to beat 400ips and D1. Harvey says it’s hard to put a time on IP’s looming dominance and he believes (not without good reason) that the change will happen in other countries before it occurs in Australia. “Countries like the USA and the UK have much more advanced internet infrastructure than we do,” Harvey says. “This means that locally the hybrid-style systems will become more common – people are heading in that direction now.”Harvey says that in Australia price and performance are governing factors. “IP does cost more but you’re actually getting more with quality IP cameras. To give an idea of how much more an IP camera costs when compared to an analogue camera you add the value of the server inside – that’s a fair way to think of it,” he explains. “If you think that you are adding a server into the IP camera you realize it’s an extra physical part that needs to be manufactured and paid for. “And while there are a lot of cheap IP cameras coming out in the market with them you run into performance/price issues if you are comparing analogue to IP,” Harvey explains. “IP cameras are usually about double the price on a medium performance camera and about 25 per cent more expensive for a more high performance camera.“There are IP cameras out there which record at 720P (HD) files which have brilliant resolution and clarity but that performance comes out at a price,” Harvey says. “What this means is that most businesses will pick the cheaper option unless they believe performance is necessary for their solution.”Central to the issue according to Harvey is a lack of knowledge in the industryabout networking and IP cameras in general. “As there are only limited number of companies with knowledge of IP and networking and I think that is a limiting factor when it comes to the expansion of the IP surveillance market.” At Ness Security Products, Glenn Watkins agrees with Harvey that training isthe key.“We are seeing IP growing dramatically and to support that growth we have launched an IP course and have had good results with it,” Watkins says. “We started an IP course at the start of the year – we have 10 installersin each class – it’s proving very popular.“People find IP much easier than they think they will,” Watkins says. “Installers leave the course with a high degree of understanding and they say ‘we would have done IP sooner if we realized how easy it was’. We give the attendees $1000 worth of IP gear to play with when they do the course so bythe time they’ve installed that gear they’re on top of it. “Interestingly, we find that end users tend not to ask for IP – it’s up to installers to learn about the benefits and tell customers about those benefits – the education part is what’s holding us up,” Watkins says. Something else that Ness people have noticed is the way IP cameras have broadened the market at different performance levels in a way that is facilitating further growth. “We have 2 ranges, the first being entry level with cameras about the same price as analog cameras but having images that are not quite as good as analog. These cameras are ideal for small jobs,” Watkins says.“Then there’s the high level range – it costs more than analog but not too muchmore but there’s D1 performance which is as good as an analogue camera,”Watkins says. “We’re finding there are clear cut levels at the installation level, too,” Watkins explains. “A customer may want one camera connected to a workstation to cover a door or traffic area at the lowest IP level yet at the upper level an IP installation might call for 1000 cameras in a Government building.“Something else we are finding, is that while total sales may be as high as 10 per cent – it’s really on and off with IP. We’re not selling IP cameras each and every day. Instead one day we’ll do heaps of IP cameras and the next couple we won’t.” Watkins clarifies this by pointing at that taken as a whole, growth has been significant.“A figure of 10 per cent for IP cameras in the context of our total camera sales for the past 12 months may not sound much but it has to been seen in light of the fact that a year ago we were not doing 1 per cent on IP cameras– that makes IP a pretty big deal.”