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IP cameras: Rise of local IC sources to spur growth

Low-cost solutions pave the way for a broader product range, improving makers' chances at enhancing their export capability.

China's IP camera manufacturing industry will climb steadily through 2010 with a CAGR of about 50 percent. This comes amid an expanding supplier base, continuous network infrastructure development and decreasing production outlay. The emergence of local chipset providers, which can lower the technology threshold and component costs, is likewise expected to drive growth.

IP camera
  The TS6000 model from China's Fuzhou Senview uses Hisilicon's Hi3510 series, and features bidirectional audio talkback.
IP models still account for less than 10 percent of China's total output of surveillance cameras, but the supply situation has improved. With more domestic design houses engaged in chipset development, IC solutions are becoming affordable and the technology is no longer confined to a few advanced companies. This has prompted more players from sectors such as network equipment manufacturing to join the line.

Because of the efforts of local solution providers, including Hisilicon and Shanghai Jade Tech, suppliers have better access to the ASIC chipset, which is the preferred component in mainstream products. Moreover, the availability of affordable ICs within China is expected to give makers a price advantage over other manufacturing hubs in the long term.

Anticipating a surge in demand, several companies have stepped up capacity to 4 or 5-digit volumes per month.

Trends & components
Product development
Industry composition
Technology: Creating a unified standard
Taiwan: R&D expands despite sluggish sales
Trends & components

China offers IP cameras in bullet, dome and speed dome types. These products typically have CCD or CMOS 39sensors, digital signal processor or DSP, or ASIC chipset solutions, MPEG-4 or H.264 compression formats, CIF to D1 resolutions and built-in Web servers. Network interface is via an RJ-45 10/100M Ethernet port or 802.11b/g Wi-Fi. PoE has become a common configuration as well.

Suppliers are also adding functions to increase product value. They incorporate microphones, a PTZ control, alarm I/O ports, a night-vision function and either a multimedia card slot or USB port for storage. Units with water and vandal resistance, and wide dynamic range are also available. The devices feature modular designs.

Current models are based on two different hardware architectures, namely, CPU+DSP and CPU+ASIC. The CPU generally utilizes an ARM9 or corresponding processor.

DSP solutions afford makers the flexibility to add various compression algorithms and functions. These, however, require higher R&D capability. Products based on such are therefore classified as high-end.

ASIC chip providers, on the other hand, offer comprehensive reference designs, including hardware, software and software development kits or SDKs. The components are primarily found in low-priced and midrange products.

Some of the popular ASIC solutions are sourced from domestic companies. Hisilicon's Hi3510 and Hi3512 series are popular because the provider offers technical support.

Certain price-sensitive buyers request makers to provide devices designed with Taiwan-based Faraday's FIC8120 and FIE8180 chipsets. International enterprises, including Vweb and Freescale, also occasionally supply ASIC components to mainland China makers.

DSPs, meanwhile, come from companies in the US and Europe such as TI, ADI and NXP.

TI offers reference designs and solutions with powerful processing capability. Its TMS320DM64x series has high frequency and a strong processor that enables video analytics and other advanced functions. The TMS320DM3x has low power consumption and cost, and an optimized video coprocessor. Because of prohibitive costs, only large factories can often afford these products.

ADI's Blackfin DSP includes the BF52x, BF53x and BF56x series. These are mainly used in midrange models.

A number of IP cameras from China are designed with NXP's PNX13xx and PNX15xx DSP solutions.

SoC solution providers integrate CPU and DSP/ASIC into a single chip to lower production outlay and simplify circuit design. They use royalty-free Linux RTOS for the software platforms to save on expenses as well.

These measures are driving the popularity of SOCs particularly among IP camera manufacturers looking to cut costs and reduce risks in R&D. The preferred SoC solutions are TI's TMS320DM3x, Hisilicon's Hi351x, and Faraday's FIC8120 and FIE8180 series.

Product prices depend on the camera type and IP module. Suppliers are predicting stable quotes in the low-end segment and further cuts for the high-end in the next six to 12 months. This comes after IP module rates dropped to $15 to $40 with the adoption of low-cost solutions.

Product development

Since most IP cameras from China are ASIC-based, product homogeneity has become a problem. ASIC's fixed architecture results in similar functions and specifications across different models.

Companies are therefore developing new functions to differentiate their devices. Network adaptability and optimization, higher resolution and intelligent technologies top makers' R&D agenda.

Suppliers are working to reduce bandwidth consumption and network latency during transmissions. They expect that H.264 will replace MPEG-4 as the mainstream format in this line within the next two years. New versions incorporate the latest networking functions, including adaptive multistreaming and activity-controlled frame rate.

Homegrown ICs are also enabling makers to develop high-definition or megapixel products. The 720 and 1080p are projected to gradually become the HD standard. New chipsets, including TI's DM365 and Faraday's FIE8180, support 720 or 1080p realtime compression. Some of the recently launched models of megapixel cameras are equipped with a 1.3MP CCD or 2MP CMOS sensor.

Moreover, companies are cooperating with video analytics experts to develop intelligent systems. Current applications include vehicle license plate and face recognition, object detection and action identification. Incorporating intelligence into surveillance, however, can take its toll on hardware performance. Makers, therefore, prefer DSP solutions for these.

Some DSP providers offer assistance to IP camera manufacturers to enhance their systems. ADI, for example, give China suppliers an SDK called Image Tool Box to help in video analytics development and improvement. Hangzhou Hikvision Digital Technology Co. Ltd works with TI and ObjectVideo.

Other R&D priorities are 3G network introduction, cosmetic design upgrades, product diversity and reliability, simpler installation and debugging.

Industry composition

China IP camera suppliers are classified into three tiers. The biggest group is comprised of traditional camera manufacturers that have ample experience in CCTV production, a range of models encompassing most key categories, and large in-house capacity. Major players, including Sunell and Shenzhen Hongtianzhi offer a comprehensive selection of analog and IP products. Small companies, on the other hand, handle product assembly only.

IP surveillance camera suppliers develop the line's core technology of IP cameras, which covers compression algorithm, communication and control protocol, software platform, DSP programming and intelligent image processing. They provide packages that are compatible with most IP systems. Many can also furnish downstream makers with SDKs for redevelopment. Hangzhou Hikvision and Launch Digital Technology Co. Ltd are among the suppliers in this tier.

Recently, network equipment manufacturers began entering the line to widen their product range and increase profitability. Since such operations specialize

in network performance optimization and offer switches, routers and other related devices, their knowledge helps upgrade the IP surveillance industry's technical capability.

Technology: Creating a unified standard

In coming years, China makers expect that the creation of an IP surveillance standard will be the main concern of the sector. There are currently two contenders to the move, namely, the Open Network Video Interface Forum or ONVIF and the Physical Security Interoperability Alliance or PSIA. Both are international IP surveillance organizations seeking for compatibility among all players in the line. They have released their draft standards and have attracted supporters from various countries.

The ONVIF is an open industry forum aimed at developing a global standard for the interface of network video products. Its specification defines a common protocol for information exchange between network video devices, including automatic device discovery, video streaming and intelligence metadata.

Hangzhou Hikvision Digital Technology Co. Ltd has joined this group.

The PSIA, on the other hand, is a consortium of nearly 50 physical security manufacturers and system integrators. They are promoting interoperability of IP-enabled devices across all segments of the security industry, including video, access control, analytics and software.

Since some China makers expect the single standard will not be achieved in the near future, they have chosen to wait and see which one will prevail.

Taiwan: R&D expands despite sluggish sales

Growth in Taiwan's IP camera industry has been slow due to the weakened broadband development. Although the segment was earlier predicted to replace conventional analog CCTV systems, no new technologies have been introduced lately. Because of this, traditional CCTV suppliers have postponed their R&D plans for IP surveillance.

Meanwhile, telecom device manufacturers are aggressively expanding to include IP systems in their product range. This is to boost the line through broadband expertise and gain significant share of the market in future.

IP surveillance companies, however, continue to upgrade their models and systems to remain competitive.

Mainstream units support megapixel resolution and H.264 compression format and operate on integrated central management system software. Upcoming cameras may have biometric identification and data security maintenance functions.

Suppliers are also pursuing hybrid system upgrades, software integration, remote monitoring and system reliability improvements. Software developers are exploring the possibility of combining data and physical security, and are teaming up with hardware vendors for better design strategies.

This article "IP cameras: Rise of local IC sources to spur growth" is originally posted in Global Sources.

Note: All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.

Disclaimer: All product images are provided by the companies interviewed and are for reference purposes only. Those product images featuring products with trademarks, brand names or logos are not intended for sale. We, our affiliates, and our affiliates' respective directors, officers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof) which infringe on any intellectual property or other rights of a third party.

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