Who are the key access and security systems providers in the US, and how is the industry changing?

by Brianna Crandall — August 1, 2018 — Market research store ResearchAndMarkets.com recently added three new reports from The Freedonia Group to its online catalog of offerings. Of interest to facilities managers (FMs) in the market for new security systems or equipment, the reports cover key players and trends in electronic security products, video surveillance equipment and access controls.

Electronic security products

The Electronic Security Products US Market Forecasts by Product and Market industry report presents historical demand data (2006, 2011, and 2016) and forecasts (2021) by product (alarms, video surveillance equipment, access controls, contraband detection systems, electronic article surveillance systems), and market (nonresidential, consumer).

The study also evaluates company market share and provides analysis on industry competitors, including:

  • Robert Bosch
  • Canon
  • dorma+kaba
  • Hangzhou Hikvision
  • Honeywell International
  • Johnson Controls
  • Smiths Group
  • United Technologies

Industry gains are expected to result from demand for upgraded security systems as new technologies come on line. Additionally, sales will be aided by growing construction activity in both the residential and nonresidential markets, as many security systems are installed during or shortly after initial construction.

The decision to purchase an electronic security system depends on a number of factors, key among them being the end-user’s perceived risk of crime, as well as the convenience and cost of the system. This balance varies significantly between end-users. For example, nonresidential users with high security risks (e.g., trade and distribution facilities that house goods and/or cash onsite or air transport facilities) are much more likely to invest in comprehensive electronic security systems, such as integrated video and alarm systems, electronic article surveillance, and contraband detection.

Most homeowners and low-risk nonresidential users, on the other hand, typically invest in basic systems, such as intrusion alarms or a single camera. Nonetheless, products that offer greater affordability and ease of use have worked to bring new end-users into the market. For example, there has been rising interest in self-installed, self-monitored alarms and video cameras among consumers who typically would not purchase a full-service system.

According to the report, technological advances continue to play a significant role in driving demand for electronic security products. For example, shifts in technology have driven system updates in a number of segments within the industry, including:

  • The shift from legacy analog to digital, Internet Protocol (IP) video surveillance systems
  • The shift away from basic card-based access control technologies such as magnetic stripe and proximity types to more secure technologies such as smart cards and biometrics

Furthermore, sales of upgrade products will benefit from the introduction of products that offer a variety of improved characteristics, such as:

  • Ease of operation
  • Durability
  • Cyber-hardened components
  • Greater flexibility and interoperability with other systems

Interoperability, in particular, continues to be a key consideration. End-users are willing to adopt systems that are capable of working not only with other types of security systems, but also with others such as building operations. Such systems may also allow end-users to leverage the data gathered to improve business operations or increase profits, supporting spending on these traditionally non-revenue-generating systems.

Video surveillance equipment

The Video Surveillance Equipment in the US by Product, Technology and Market study presents historical demand data (2006, 2011 and 2016) and forecasts for 2021 by product (cameras, monitors, recording equipment, other components), technology (IP, analog), and market (trade and distribution, government, financial, educational, industrial, services, healthcare, air transport, offices, consumer, lodging, other nonresidential).

The study also evaluates company market share and competitive analysis on industry competitors, including:

  • Robert Bosch
  • Canon
  • Hangzhou Hikvision
  • Hanwha
  • Honeywell International
  • Johnson Controls
  • Schneider Electric

According to the report, growth will be driven by the increasing affordability of feature-rich systems that incorporate enhanced capabilities, which will:

  • Work to expand the base of end-users who choose to install video surveillance systems
  • Spur replacement and upgrade demand among existing end-users

Continued, though slowing, gains in construction activity will also support new system installations among the expanding base of potential end-users. New construction in the trade and distribution market, where video systems are key security components, will drive gains.

Cameras accounted for roughly half of all video surveillance system sales in value terms in 2016 and will represent 70% of additional total sales growth through 2021. Gains will be supported by a number of factors:

  • Stiff price competition at all price points will result in more affordable products, expanding the potential customer base and propelling volume gains, even as it limits value sales to a degree.
  • Ongoing technological advances that provide enhanced characteristics — such as improved durability, ease of use, and picture quality — will drive upgrade demand.

Although other components are not expected to see advances as rapid as those posted in the cameras segment, there are a variety of opportunities for growth. For instance, rising use of ultra-high-definition cameras and recording equipment will support increasing sales of high-quality, higher value monitors, such as 4K and 8K types, albeit from a small base. Sales of encoders will also see new opportunities as interest in high-definition (HD) analog systems grows.

Various innovations across the video surveillance industry add performance advantages and increased functional capabilities, which spur owners of existing installations to upgrade before their useful lifespans are over. The ongoing transition of the installed stock from analog to IP-based digital video systems is one such example. Technological improvements are included in more mass-market equipment as prices come down.

Examples include:

  • IP-capable thermal cameras
  • Enhanced HD analog cameras and recording equipment that are capable of operating with all HD analog technologies as well as traditional analog systems
  • Analytic technology used in conjunction with panoramic cameras that provide higher quality dewarped images

Access controls

The Access Controls in the US by Product and Market report presents historical demand data (2006, 2011 and 2016) and forecast (2021) by product (biometric, card-based, keypad/combination) and market (trade and distribution, government, financial, educational, industrial, services, healthcare, air transport, offices, consumer, lodging, other nonresidential).

The study also evaluates company market share and competitive analysis on industry competitors, including:

  • Allegion
  • Robert Bosch
  • dorma+kaba
  • Honeywell International
  • Johnson Controls
  • OT-Morpho
  • United Technologies

According to the report, sales of access control systems in the US will be driven by:

  • Rising new construction activity, which will support sales of new systems as the number of potential end users expands;
  • Demand for upgrades as newer technologies are adopted, particularly as interest in multi-credential and interoperable systems continues to rise; and
  • Declining product costs, which make higher security systems more affordable to a wider variety of end users.

Faster gains will be limited to a certain extent by the balance between end-users’ perceived risk of and their willingness to invest in access control systems. Even as biometric technology comes down in price, the cost of these systems still outweighs the needs of all but the highest-security locations. Similarly, lower cost, more basic electronic systems compete with mechanical locks, which provide similar levels of security at a lower cost.

Gains are expected to result from the increasing trend toward systems that incorporate multiple credentials in one system. Multi-credential systems minimize the risk of access by unauthorized individuals by requiring verification of more than one of the following:

  • Who they are (e.g., fingerprint, retinal)
  • What they have (a card, fob, or mobile credential)
  • What they know (a passcode)

According to the report, the use of mobile credentials has seen particularly strong gains in a variety of settings, including lodging establishments, offices, universities, and some government facilities. The use of these systems has provided a particular boost to sales of the higher value card-based and biometric segments, since most multi-credential systems incorporate at least one of these technologies and are classified here by the most secure technology.

Through 2021, gains will be particularly strong in markets where at least one of two key trends is taking place:

  • Strong new-construction activity, resulting in demand for new installations
  • Increasing adoption of newer, higher value technologies, which will spur upgrade demand

For example, accelerating construction activity in health-care and education facilities will result in above-average increases in new access-control-system sales for both markets, predicts the report. Sales to the government market are also expected to be above the industry average, boosted by a shift within the Department of Defense toward higher-security biometric readers.

For more information or to purchase either of the reports, visit the ResearchAndMarkets.com website or click on the specific report links above.