Prediction: US market to be $17b by 2014, access to lead the way
CLEVELAND - Freedonia Group analysts have released a report that predicts fairly quick growth for the electronic security market in the United States, saying the market will grow from roughly $10.9 billion (2009) to $17 billion in 2014. This represents a 9.3 percent annual growth rate.
Ron Petrie, industry analyst at Freedonia and author of the report, said this growth will be lead by access control product sales, which he says comprises 37 percent of the market currently, and will make up as much as 43 percent of the market by 2014 - a greater than 12 percent annual growth rate. "Access control is still a critical issue,' Petrie said, "and it's not totally addressed anywhere ... If you can get people to crash the gates at the White House, the most secure place in the world, think about whether you're a CEO of a corporation somewhere: Are you thinking that maybe your employees are not secure?'
He said a "biometric revolution is coming out of the military,' that logical/physical convergence is a small, but important driver, and that identity management will be more critical in the near future.
He predicted that within 10 years some kind of universal smart card would be common in the United States, whether it be an "alternative passport' or a "universal driver's license.'
Despite the press video surveillance systems get, Petrie is not as bullish on video's growth. He predicts a seven-percent growth rate through 2014, to a total video-market size of $1.6 billion.
In fact, Petrie said the 2009 economy was so bad, the market for video stayed essentially flat between 2004 and 2009. He called last year "truly a 50-year flood ... It was a very severe recession and that affected a lot of businesses that typically aren't that sensitive to the economy.'
He thinks the rebound is already happening, though, and while installers might not see the business until 2011, retailers and financial institutions in particular are starting to green-light projects that have been on hold since late 2008.
Those markets "have a very large install base already,' Petrie reasoned, "so it wasn't like you could go to them and say, ‘you need a new toy.'' However, "there are some great new things that are coming that they're certainly going to be investing in. If not this year, then the next year and the year after, and that's going to be a lot of video equipment.' He cited the ability to serve video to mobile devices as an important market driver.
In the residential market, "we're looking for pretty strong growth in multi-unit housing,' Petrie said, "and that should be a big fresh new area.' He said there haven't been great multi-unit security system solutions in the past, "but now it's getting to be a lay-up to put access control in, along with video in the parking lot and alarm systems. The cost is so low and the technology is so proven, so that any new construction will just have that as a matter of course.'
Finally, however, Petrie said the industry needs to be aware of the tenuous value proposition it holds with the general public. Mainstream Americans seem to be almost irrationally afraid of crime, as Gallup polls have found fear of crime increasing as actual crime decreases.
"Crime is increasingly less of a problem,' he said, "and the crime that is a problem is so irrational and unpredictable, it's hard to say exactly what you're getting from this equipment sometimes. Could someone figure out how to get through your system? It seems to me that we've created equipment and systems that deter amateurs, but we find over and over again that if someone really wants to spend the time, they'll figure out how to defeat the system.
"So it may be that the great growth in the future comes from someone who figures out how to stop the pros. We're not there yet.'