22/12/2013
South African network market already surpasses analogue
The market transition will continue with an increasing proportion of future revenues coming from network equipment. However, due to a combination of low economic growth, a weakening Rand and on-going labour disputes in key vertical markets for video surveillance, we remain conservative about the current growth prospects for the video surveillance market in South Africa. Single digit growth is forecast for 2013 and 2014.
There remains a high installed base of analogue equipment in South Africa. Analogue equipment still accounts for the majority of unit shipments and, unlike other regional markets in Europe or North America, shipments are forecast to grow. In certain vertical markets analogue equipment is likely to remain the technology of choice. The residential sector is one such example: analogue equipment offers a low-cost, easy-to-install solution and each year a high number of cameras are installed by small security professionals covering homes in South Africa. It will be a challenge for network equipment vendors to convince these installers to switch to network video surveillance equipment. In installations where cost is the most significant factor, the higher price of network equipment still means analogue is often preferred.
The transition to network equipment in high value projects is having the most substantial effect on growth in the South African market. Revenues from analogue equipment are forecast to remain broadly flat.