a&s Asia Mar-Apr 2013(Trial Version) by Messe Frankfurt New Era Business Media Ltd. Taiwan Branch

Mar/Apr 2013

Product Exploration

42 Checkmate! NVRs Win it All

Similar to how DVRs took over the VCR market, NVRs are set to conquer the DVR market and become star products for the security industry. With all due respect, the success of video surveillance is largely dependent on video storage as well as ease of access and management.

52 Userâ&#x20AC;&#x2122;s Choice for Storage: Embedded NVRs

Product Exploration

Industry Report

What Makes Megapixel 56 Cameras Stand Out As 2-megapixel (MP) network cameras become the market standard, there are not only more affordable products but also custom-made solutions available.

62 Six Function-Specific

Cameras

The Biometrics Market Divergence:

Commercial and Government Sectors

Emerging economies are embracing biometric technologies and projected to lead the growth in biometric applications.

38 G overnment Elections Go Biometric

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More on iPad.

Mar/Apr 2013

Vertical Market

Intelligence Eliminates Retailer’s Shrink Business intelligent applications help retailers, big or small, boost their competitive edge and value proposition, and leverage existing surveillance investments.

Download “a&s Magazine” app now.

78 Corporations Choose MVaaS for

Convenience and Simplicity

Special Feature

Regional Perspective

88 Multifactor Authentication Provides

66 What's behind Opportunities in China?

Peace of Mind for All Access Control

Korea Update

96 Korea Update: Korean Manufacturers

The 18th Communist Party Congress was a significant event in Chinese politics. The meeting decided not only the new leadership of China but also made major policy decisions with far-reaching consequences.

Branch Out

Application Case

102 Bosch Enhances Security at

Vietnamese International Airport

Company Spotlight

104 Vantech Grows with Branding and

Services

14 18 20 20

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Contents Editor’s Note Corporate News Market Observer

30 110 118 125

Products of the Month Show Calendar New Products Companies in This Issue

EDITOR'S NOTE a&s Asia, published by Messe Frankfurt New Era Business Media Ltd., is a bimonthly professional publication for channel players in the regional electronic security industry. It caters to importers, distributors, OEM/ODM searchers, system integrators and other

Waiting for the Next Blockbuster?

product purchasers to get updates on product sources and developments in CCTV, Digital Surveillance, Access Control, Biometrics, Intrusion Alarm, Intercom/Video Doorphone, Home Automation and other fields relevant to electronic security.

ISSN 1997-6259

Apple expressed disappointment toward its recent falling share price, which had generated great sensation in the market lately. The technology giant, however, assured investors that it was working on a pipeline of “great stuff” to try to win another battle. Similar news is also coming from some multinationals in the security industry. Axis Communications, the leading network cameras supplier, announced its sales increased by 17 percent in 2012, without reaching its previous forecast of 20 to 25 percent year-on-year. Mobotix announced its first quarter (from Oct. 1, 2012 to Dec. 31, 2012) sales report in 2013 that total output increased by 4.4 percent, but the sales revenue decreased by 3.5 percent. Lastly, Flir Systems’ 2012 sales report showed that its revenue was US$1.4 billion, down 9 percent compared to $1.54 billion for the previous year. Uncertainty in the global economy, recession in some European countries, and budget cuts in government spending are the major reasons for the not-so-positive sales reports. Are those multinationals in security now in the same status quo as Apple, at the beginning of flat and decreasing sales growth? Some worth noticing news is Milestone’s announcement to penetrate mid-to-low end market sectors. Milestone, recognized as one of the VMS leaders in the first-tier market sector, now redirects to focus on this mid-end market. By making this strategic decision, Milestone expects to maintain its steady growth in the future. Meanwhile, Flir’s recent acquisition of Lorex also shows its determination to access consumer electronics. We are wondering what will be the next shining star after the network camera, which was introduced to the market in early 2004. There are some speculations that Apple is working on a revolutionizing product to target the television market. But until now, we haven’t seen any major breakthroughs from these security giants. It doesn’t seem possible that “PSIM” will be the next shining star either, since there are still many obstacles it needs to overcome, such as standards and price. Multinationals strive to continue their sustainable development through product innovations and accessibility. As an industry observer in security, I expect to see more “revolutionizing” products and forward-looking marketing strategies coming up in the near future.

Jill Lai

jill.lai@newera.messefrankfurt.com

中華郵政台北雜字第1570號執照登記為雜誌交寄 Parson Lee Publisher & Managing Director Joseph Lee General Manager John Shih General Manager Editorial General Press Jill Lai Editor in Chief Alf Chang Senior Consultant Reporter Tevin Wang Alyssa Fann Reporter Christina Phillips Reporter Christine Chien Reporter Coordinator Jessie Lin

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Corporate News Chinese Highway in Guangdong Goes HD Boluo-Shenzhen Expressway is an important part of the fourth vertical expressway that links Shenzhen, Hunan, and Renhua in Guangdong province. Connected to Yanpai Expressway, it is a major north-south road for the province and a key express link between Hong Kong/Macau and Hunan/Jiangxi. The entire expressway is designed for six two-way lanes and a vehicle speed of 100 kilometers per hour; 50 percent of the expressway comprises of large bridges and tunnels. In order to enhance safety management of the expressway, there is a need to ensure uninterrupted 24x7 surveillance of road conditions and create a safe, trustworthy, high-definition smart video security system that includes surveillance of the tollbooth management center and rest areas. This also meets the requirement for superior security technologies for expressway surveillance. Three hundred and fifty Axis HD cameras were strategically placed at different surveillance points along the Boluo-Shenzhen Expressway. The entire network is comprised of HD cameras along the main

expressway, tunnel surveillance cameras, tollbooth surveillance cameras, and surveillance cameras at the management centers and rest areas. Real-time transmission of high-definition images is achieved through fiber-optic communications. This is the first time that a fully digital surveillance system and HD network cameras are used for an entire expressway by Guangdong Provincial Transportation Group. The entire system is transmitted via Internet, phasing out the optical transceiver model of conventional analog surveillance systems and producing huge savings of construction and maintenance costs.

Global Security Services Market Surpassed US$66B in 2012, Says Frost & Suvllivan

Vietnam Highway Reinforces Toll Collection with ALPR/LPR Solution

The increasing complexity of both IT and physical security requirements for commercial and government organizations will drive a shift toward outsourcing security to managed security service providers (MSSPs). Adopting an outsourced model reduces the need for in-house provision and can provide the most cost-efficient approach to an organizationâ&#x20AC;&#x2122;s security. New analysis from Frost & Sullivan, "Analysis of the Global Managed Security Services Market," found that the physical and IT security market was around US$66.3 billion in 2012 and is estimated to increase to $139.1 billion by 2021. While shifting security operations to MSSPs enables organizations to outsource progressively more complex security requirements to the experts, some organizations still prefer to keep security in-house which allows them to address issues immediately, without relying on outside companies. Focusing on the larger markets, such as North America and Europe, where outsourcing security s e r v i c e s i s a m o re Global Physical and IT accepted prac tice, Security Services Market will help MSSPs build The market is estimated market share and a to increase to US$139.1 strong customer base billion by 2021 for companies. This trend is expected to spread to other regions, with APAC anticipated to experience the highest growth in the next 10 years. Source: Frost & Sullivan

The Cau Gie-Ninh Binh Expressway stretches for 50.3 kilometers from Hanoi to national highway 10 in Nam Dinh Province. The dual three-lane expressway aims to help ease traffic on National Highway 1A, while cutting the traveling time in half between the nation's capital and provinces in the south of the Red Delta. The expressway adopted the Intelligent Transport System provided by Messoaâ&#x20AC;&#x2122;s partner - CadPro in Vietnam. One of the critical parts in the system is toll stations, which were set up at the entrances and exits throughout the expressway to collect charges based on travel distance and vehicle types. To facilitate the toll collection process while ensuring the smooth operation at each station, the ALPR/ LPR traffic cameras were deployed at these locations. Each lane is covered by two cameras for license plate capture and overview monitoring of the entire toll booth lane. The cameras are able to minimize extraneous noises on the road, such as rain, headlight, and smoke/fog, and also designed to capture sharp license plate and overview traffic images in all lighting conditions under various speeds. Having combined the video solution with the toll system, the monitoring center is able to keep track of the toll staff behavior and the vehicle flow at each station. The recorded footage can be used as a reference to ensure proper toll coection.

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Corporate News Diamond City of Surat, India Benefits from 24x7 Safe City Surveillance Verint collaborates with Surat City Police Department, Surat Traffic Education Trust, and Innovative Telecom & Software on next generation video surveillance and physical security information management capabilities to help create a safer and more secure environment. With the successful project launched in the beginning of 2013, the diamond city of Surat in Gujarat will benefit from a 24x7 video surveillance and security command center. The initial phase of the Surat Safe City Project consisted of more than 100 video surveillance cameras covering all major traffic junctions, along with critical entry and exit points in the city. In subsequent phases, the Surat City Police Department and Surat Traffic Education Trust plan to extend the coverage in the city, which has a population

of approximately 45 lakh (or about 4.5 million), by integrating the project with a proposed state government surveillance and command center network in Gandhinagar. At the heart of the project is the deployment of a command, control, and communications center with a 280 square foot “video wall” that can centrally monitor, aggregate, and analyze multiple surveillance feeds in police headquarters to support the proactive physical security management of the city. The center includes a city mapping capability that provides reports on physical security and fire alarm and water levels, along with evacuation and disaster recovery plans. The city administration plans to increase the number of surveillance locations to 5,000 by the end of the project implementation.

44.2% ABI: US$2.1B Contactless Employee theft Credentials to Ship17.9% into the Transportation and Others Ticketing Market in 2018 12.1%

PSIA Working Group $918 million to Release Access and Intrusion Profiles

25.8%

Administrative ABI Research forecasts US$2.1 billion contactless will ship errorcredentials Shoplifting andinto the transportation and ticketing market in 2018; a combination of smart organized retail cards crime and

limited use RFID solutions. A shipment forecast for 2018 is just over double that achieved in 2012. MiFare solutions continued to account for the lion’s share of shipments, at just over 80 percent of all contactless ticketing credentials deployed in 2012. Although ABI Research expects it to remain as the number one solution of choice, new standards coming to market, including CiPurse and a fast increasing "others" category will reduce MiFare’s share to a forecasted 69 Contactless Credentials percent in 2018. Further fragmenShips into Transportation tation is expected as governments and Ticketing worldwide look at implementing national standards in a bid to guarantee interoperability, enabling The shipment for 2018 forcasts to double that cross-authority travel with single achieved in 2012 credentials. Overall shipment growth is forecasted to maintain double-digit Year over Year for the next five years; however, shipments of memorybased smart cards are falling, having already decreased by 4 percent Source: ABI Research between 2012 and 2013.

MAR / APR 2013

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To ensure interoperability $377 with milliona "high degree of certainty," Mohammad Soleimani, Executive VP and CTO of Kastle Systems, recommended to the PSIA million develop use-case specific board that the$35.4 organization profiles. Such profiles are commonly used by standardssetting bodies and are carved out of broader standards 2011 2014 2016 or specifications to address narrower applications of the standard. Soleimani and the Profiles Working Group chairs are now, with the PSIA board’s consentment, on the verge of announcing two profiles — access control and intrusion detection, both derived from the broad Area Control Specification. In addition to drawing data elements from the PSIA Area Control Specification, the profiles also detail the data elements from the PSIA's common reference Estimated to reach specifications that govern how security systems US$615.4 million in communicate with each other, including the PSIA revenue by 2016 Common Security Model. With these "compliance recipes" to follow, they should make it faster and easier for manufacturers to comply with PSIA specifications. The Profiles Working Group also has developed a comprehensive testing tool to validate a correct profiles implementation and ensure manufacturers' products will interoperate with other PSIA-compliant products.

Ana

Corporate News Largest Transformer Manufacturer in China Opts for Web-Based Access HID Global, a worldwide supplier in secure identity solutions, announced that its network access control solutions and contactless readers have been selected by Shenyang Transformer Group (Shenyang TBEA) in China to enable access level settings and area control to prevent unauthorized entry. The new access control solution is interoperable with the plant’s existing credentials and integrates with a wide range of hardware and management software for additional deployments. The solution leverages Shenyang TBE’s existing TCP/IP network investment to provide a centralized,

Thai University Conference Center Boosts Security via IP-Based System Prince of Songkla University International Conference Center, Thailand’s newest convention center and the largest in the country’s southern region, is situated within the Hatyai campus of Prince of Songkla University and located just nine kilometers from Hatyai International Airport. The conventional center is also in close proximity to the full spectrum of modern amenities and features a splendid southern style architecture. An outstanding security system was required to be installed within the center in order to accomdate its need of hosting a full range of leading-edge local and international events. Bosch Security Systems was chosen to help install the needed video surveillance system. The purpose of the video surveillance system is to observe, recognize, and identify the people sojourning in the area. Recorded images are relayed to the control room, where they are shown on the video wall for the people who are in charge of the technology. The system provides a complete overview of all events in the center with the help of 19 network cameras, 27 dome cameras, as well as 47 other cameras. Full control of meetings and discussions without being dependent on any operator is provided by DCN wireless systems, which can be easily extended and provides ease-of-use for all of its various functions and its unique features. Nowadays, the center is able to to facilitate numerous meetings taking place with ease. Moreover, the system makes it possible for specific situations or areas to be monitored in order to discuss what measures should be taken.

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web-based access control system that provides central monitoring, report generation, visitor management, and the ability to establish staff access level settings. With dispersed entry points over a 720,000 square meters industrial park, Shenyang TBEA deployed HID Global’s network controllers, door/reader interfaces, and contactless smart card readers to safeguard the plant’s integrated factory, R&D building, administrative offices, elevators, mixed working areas, and key equipment rooms.

China Life Upgrades Attendance Management for 700K Employees Across 1,485 Sites ZKTeco, a provider of fingerprint time attendance solution, won the bidding of the China Life Insurance Company's time attendance project. The project uses the ZKTeco time attendance system to manage the attendance of 700,000 employees spanning across 1,485 subsidiaries or offices. ZKTeco customized the time attendance software for China Life so the system can meet the different demands of the customer, such as attendance rules settings, data collection and computing, report export, and absence management. The whole system consists of 11 servers, three for data collection, six for data computing, and the remaining for back up. With the system recording employee attendance at different work places and the customized software that manages the data at headquarters, the attendance management of 700,000 employees is not a problem anymore.

Magal Expands Its Activity into Cyber Security Magal Security Systems announced that it is expanding its business proposition with integrated physical-cyber protection solutions. As a part of this strategy, Magal acquired Websilicon, an Israel-based provider of network management services and solutions worldwide for a diverse range of electronic equipment and software developers. M a g a l ’s n e w c y b e r security solutions will m o n i t o r, d e t e c t , a n d protect against abnormal network activity, including landline and wireless, as well as the inside and close proximity of the protected sites.

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Corporate News

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Korea's First Urban Transit Monorail to be Trailblazer in IP LILIN has been selected as the security camera provider for the third rail line being built in Daegu, South Korea. This new bidirectional monorail, constructed by Hitachi, will be watched over for both security and safety, with the installation of 224 LILIN vandalproof IP mini dome cameras. The fleet includes 28 trains, and each will feature 8 EN50155-compliant (EN50155 is the European standard of Electronic equipment used on rolling stock for railway applications) domes. Construction of the Daegu monorail began in July 2009, and is expected to be completed by October 2014. When finished,

Another Biometric Solution Provider Obtains STQC Certification in India DigitalPersona, a provider for biometric identity ver ification solutions, announced that the DigitalPersona single touch USB-based fingerprint reader with capacitive sensor have been certified by the Standardization Testing and Quality Certification (STQC) Directorate, an office of the Department of Electronics and Information Technology, Ministry of Communications & IT, Government of India. This certification was obtained in cooperation with DigitalPersona's partner in India, Smart Identity Devices. DigitalPersona is the first and only supplier to pass the rigorous accuracy, durability, safety, and usability tests conducted at STQC laboratories for both optical and silicon fingerprint scanners. The addition of DigitalPersona's single touch USB-based fingerprint reader with capacitive sensor to the list of approved biometric devices for India's Unique Identification project provides integrators and OEMs unique and proven technology choices.

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the rail line will extend from Download “a&s Magazine” app now. Dongho-dong in northern Daegu, all the way to the southern suburb of Beommul-dong. The monorail construct was chosen for its shorter implementation time and lower cost, and will be the first urban transit monorail system in Korea. The Daegu monorail project will serve as testament of LILIN and its partner’s rolling stock capacity and quality for continued growth in the railway sector.

Morpho to Provide Biometric Authentication for State Bank of India During the official visit of French President, Françoise Hollande to India, Morpho (Safran) signed an agreement with the State Bank of India for the provision and maintenance of a biometric authentication solution through its Indian subsidiary, Smart Chip. The agreement was signed on Feb. 18th in New Delhi by N Jambunathan, Chief GM of the State Bank of India and Sanjeev Shriya, MD of Smart Chip, in the presence of French President Françoise Hollande and Jean-Paul Herteman, Chairman and CEO of Safran. Under this agreement, Smart Chip will implement a biometric authentication solution comprising fingerprint sensors and biometric matching software to verify the State Bank of India’s employee credentials before granting them access to the core banking system. This solution will enhance security of the entire banking infrastructure.The system will be implemented across State Bank of India and its associate banks to provide biometric verification in over 21,000 branches.

Bank of New Zealand Keeps 179 Branches Powered Up At the 179 branches and 36 business centers of the Bank of New Zealand, a range of Altronix products supply power to analog and IP cameras and other security equipment. In addition to wall-mount and rack-mount analog power supplies, the bank deploys the supplier’s unshielded twisted pair (UTP) transceivers to transmit video across structured cabling and video power supply models to provide centralized power in a rack configuration. In 2009, the bank upgraded from utilizing coaxial cable by switching to UTP for analog video transmission, implementing UTP solutions. Hubway transceivers coupled with video balun/combiners allow the bank to continue to use existing AC and DC analog cameras. The new cable infrastructure enables migration to IP video when and where required by adding power and pass data for PoE compliant cameras/edge devices.

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Industry Report

Government Elections Go Biometric

Photo courtesy of Suprema

Emerging economies are embracing biometric technologies and projected to lead the growth in biometric applications. Where there is little faith in the electoral process, such technologies may hold key to safeguarding the basic individual right of voting and credible elections. This feature looks at the adoption of biometric technology for government elections. By Alyssa Fann

any emerging economies have implemented biometric voter registration (BVR) systems in 2012. In many of these countries, governments are not only adopting biometric technologies for national identification systems and border control, but also to secure the basic voting rights of their citizens. The adoption of BVR is especially attractive for countries where election results are often disputed and manipulated. The main reason is simple — biometric solutions provide an irrefutable proof of the voter ’s identity, thereby injecting credibility and transparency to the electoral process of many emerging economies that have often suffered from vote rigging and manipulation in the past. The countries that have adopted BVR systems were able to prevent fraudulent and duplicate 38 22

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registrations, as voters are only able to register for themselves and once only. It also removes the deceased from the database so that it will no longer be possible to vote in their names.

AFRICA

In Africa, where elections have always been plagued by rampant fraud and manipulation, biometric solutions carry the answer to credible and transparent elections. Several

Why Use Biometrics to Register Voters? A BVR system enables the electoral register to ensure the following: • The possibility of multiple registrations is reduced to 0.01 percent

• Ghost registrations are eliminated as voters have to be physically present to be enrolled

• Voters will be able to change their details or transfer to other electoral areas without the need to re-register • The database can be easily updated; new voters can be added and deceased voters can be removed as necessary

• Lost ID cards can be easily and accurately replaced by confirming the individual’s identity using biometric details in the database

• Subsequent registration costs will be reduced as some of the equipment will still be available Source: The National Electoral Commission, Sierra Leone

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countries across the continent have begun, or are planning to implement BVR systems. In Sierra Leone, a country that is still recovering from the civil war that ended a decade ago, the government turned to BVR to prevent duplicated registrations and uphold the principle of “one person, one vote.” The system they adopted captures thumbprints and facial features, along with biographic information. To avoid duplication, enrolled thumbprints are centrally matched with those in the database. The supplier, Suprema, provided over 800 units of its fingerprint live scanner to form the core component of the BVR system. In addition, Suprema was able to assist in updating the previous electoral registry that, as reported by CNN, contained names of the deceased, the underage, and foreign nationals. Ghana holds the current world record in both biometric voting and registration. Despite the problems that it encountered during its 2012 elections, such as biometric verification machines going missing and time delays related to using new technology, Ghana’s accomplishment

Photo courtesy of Suprema ▲ Biometric technology may hold key to credible elections.

Venezuela: An Automated End-to-End Voting Experience • Smartmatic’s end-to-end automated electoral solution was employed for both the 2012 Regional and Presidential Elections in Venezuela

• 12,784 polling stations were set up and 36,220 voting machines were deployed for the 2012 Regional Elections

• More than 18 million citizens enrolled to vote in the presidential election, and 13,683 polling stations with 39,018 voting machines were set up for the presidential elections • T he Consejo Nacional Electoral, the country’s national electoral council, published official results only minutes after the last polling station closed

• The system is 100 percent auditable, and was audited before, during and after each election Source: Smartmatic

should be noted — it registered and verified approximately 13 million people within 48 hours, and was able to expose 4,000 people with multiple registrations. The Ghanian BVR system requires voters to register their 10 fingerprints, a headshot, and biographic information using machines supplied by Suprema. Kenya is another African country that has implemented a BVR system for its Mar. 4, 2013 general elections. A supply of 15,000 BVR mobile kits was provided by Morpho Canada, following an agreement between the governments of both countries. The BVR kits include digital cameras, fingerprint scanners, and power back-up systems. As with other BVR systems, facial features, fingerprints, and biographic information were registered. By December 2012, more than 12 million eligible Kenyans have registered. Many other African countries are also preparing to adopt BVR systems for their elections, or have already done so. These include Zimbabwe, Mozambique, Namibia, Nigeria, and South Africa.

REST OF THE WORLD

While Africa appears to be the current hotspot for BVR systems, 22

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several countries in other regions are also on a similar track. For instance, more than half a million eligible voters in Fiji have registered to vote in the upcoming 2014 elections. The system is a biometric thumbprint registry system supplied by CODE (now owned by Electoral Services International), and has brought to light 1,441 fraudulent or duplicate entries in the registry after only the first round of registrations. In Venezuela, Smartmatic supplied a system to fully automate the national election process in which Hugo Chavez was reelected as president. For the election, Smarmatic provided Venezuela with a new biometric voter authentication system, a newly designed e-ballot that works in unison with the 39,018 voting machines deployed in 13,810 polling centers. Thanks to the technology, official results were available and published only minutes after the last polling station closed. Other countries that have expressed interest in BVR systems include the Philippines, Pakistan, Nepal, and Brazil. Not surprisingly, there are voices in the U.S. calling for reforms in the country’s electoral system that has yet to take advantage of technological advances.

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Regional Perspective

What’s Behind Opportunities in China? The 18th Communist Party Congress was a significant event in Chinese politics. The meeting decided not only the new leadership of China but also made major policy decisions with far-reaching consequences. Being the world’s second largest economy and home to 1.3 billion people, the impact of the 18th congress carries great significance for China and the rest of the world. a&s gives the latest update on China’s top vertical markets, security industry, and IP uptake in 2013. By Tevin Wang

espite slow GDP growth in 2012, Zhongyuan Lu, Deputy Director of the Development Research Center under the State Council said China's economy will grow more than 8 percent in 2013. The government will continue its focus on promoting sustainable growth. The chariot of Middle Kingdom is not only riding fast as a manufacturer in the security industry, but also as a market for security equipment. Rapid urbanization will continue to drive

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the Chinese security market. China’s homeland security and public safety (HLSP) market will surpass the U.S. and become the world’s leading market. According to IHS iSuppli, the Chinese

US$

11 billion: www.asmag.com

surveillance market will reach US$11 billion in revenue by 2015. According to China’s 12th Five-Year Plan (2011-2015), it spends more on HLSP than it does on defense. The HLSP market grew from $40 million in 2011 to $45 million in

According to IHS iSuppli, the Chinese surveillance market will reach US$11 billion in revenue by 2015.

2012 and will reach $58 billion by 2015 and $105 billion by 2020. By 2014, China is to become the world's largest national HLSP market.

Top Verticals

Airports, transportation, and city surveillance are key verticals in 2013. According to IMS Research (now part of IHS), two out of three new airports built in the world are in China. Constructions of new airports launched in 2011 are now in the early stages of development. By 2015, 42 airports will be completed. Major cities in China are embracing the convenience of metro systems. Construction is currently underway in 2013. If Chinaâ&#x20AC;&#x2122;s massive investment in high-speed rail is impressive, its spending binge on local rapid transit is even more remarkable. The central government has made a commitment to spend up to $100 billion by 2015 on the urban public transportation, which is part of a $1 trillion investment in urban infrastructure nationwide. Shanghai, for instance, now offers 282 stations and 420 kilometers of subway track, compared to 408 kilometers in London and 368 kilometers in New York. The city has an additional 300 kilometers planned for operation by 2020, by which time this city alone will have more rapid transit mileage than the entire country of Japan. Shanghai is not alone. Twelve other Chinese municipalities currently have rapid transit, 19 more have systems under

180 billion:

construction and an additional 17 new networks are planned. By the end of this year, China will offer a total of 1,400 kilometers of metro systems, up from about 600 kilometers today, to form a network spanning 3,000 kilometers in five years. Other government initiatives driving growth are safe/smart city projects. The governmentâ&#x20AC;&#x2122;s safe city program funding will exceed $180 billion during 2013-2020.The 18th congress mentioned that these projects will continue to expand in order to speed the pace of urbanization, as urbanization introduces unique security and safety demands. The metropolises of Beijing, Shanghai, and Shenzhen will continue to expand their city surveillance with more SD to HD upgrades. It is estimated that in the following three years, about 1 million cameras will be deployed in each province. Also, retrofitting projects from SD to HD upgrades and newly installed HD cameras together will be worth $4.7 billion in 2013. Banking is rich with golden opportunities. According to China Galaxy Securities Research, there are about 3 0 , 0 0 0 banking

420 kilometers:

Shanghai, for instance, now offers 282 stations and 420 kilometers of subway track, compared to 408 kilometers in London and 368 kilometers in New York. The city has an additional 300 kilometers planned for operation by 2020.

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The governmentâ&#x20AC;&#x2122;s safe city program funding will exceed $180 billion during 2013-2020.

locations and 21,500 ATMs nationally. Driven by intelligent video, financial security solutions are expected to combine alarm notification, intelligence, HD, and system integration, according to IHS iSuppli.

Product Trends Cameras

Analog price wars led to crumbling profit margins, making IP-based solutions the only way out of this vicious circle. According to Kedacom, more than 90 percent of its revenue comes from HD products. End users that used to be hesitant about IP got a better understanding in 2012 and are more receptive to IP. As profit for analog products drops to nil, IP provides manufacturers with tremendous opportunities for revenue and margin growth. Network camera sales in 2012 have become major profit generators for manufacturers. The convenience of PoE, IP integration, and better images compared to analog have grabbed more attention from end users. Major players such as Dahua Technology and Hikvision Digital Technology launched price-competitive network camera plus NVR combos to increase their market share. With leading companies pushing budget packages, massive NVR deployment and adoption are to be expected in 2013. Many Chinese brands will divide their camera lines into two categories. The first is high-end, pushing camera specs to the limit with numerous features, high sensitivity in low-light applications, and front-end analytics.

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Regional Perspective

R.I.A is one of the companies which extended the portfolios to smart cards, readers, and parking management software.

30,000 & 21,500: According to China Galaxy Securities Research, there are about 30,000 banking locations and 21,500 ATMs nationally. The other category is budget cameras targeting the mid-end to entry-level market. While Chinese manufacturers put extra effort on features such as codecs, bandwidth optimization and wireless transmission in the previous year, image quality and color saturation will be fundamental goals in 2013. Tw o - m e g a p i x e l c a m e r a s a re expected to be the mainstream. Features such as smart algorithms or plug-and-play draw attention and create true value quickly, Mobotix said. Network cameras now generate not just clear but too many images for the human eye to see. Smarter analysis from intelligent algorithms is what users can rely on to analyze the video feed effectively and efficiently. With more network cameras swamping the market, there is still much to improve, especially for integration. While 2-megapixel cameras will become the norm, cameras with 5 megapixels will be adopted for traffic management. Access Control

The IP migration has had a positive influence on access control. Chinese manufacturers are launching more integration-friendly products rather than simply manufacturing standalone readers or cards. Even access control providers are now positioning themselves as building automation providers rather than box-movers. Near field communication (NFC) is sure to be a must-have in 2013. However, lack of standards and

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Intrusion Detection

u n s e c u r e d trans m iss io n are major bottlenecks. Currently, foreign companies promote NFC while Chinese companies launch RFID-SIM or SIMPass enabled products. Higher-layer cryptographic protocols for secured transmission in China at this moment are still absent. Products such as access control management software, wireless/IP locks, and combination of physical and biometrics readers/cards are expected to increase at a steady 8 to 10 percent. Metro systems, parking lots, and commercial buildings are hot verticals with solid growth. Dethroning the U.S. as the world’s largest car market in 2009, China's auto market is forecast to grow an average 8 percent annually until 2020, according to McKinsey & Company. The growth of automobiles is accompanied by the need for parking lots and better management systems. This makes smart parking lot management one of the fast growing markets for access control. The number of automobiles in China has surged to 100 million in 2011. With this increase, it is estimated China’s smart parking equipment market will be worth $800 million and grow 20 percent. Seeing this tremendous demand, Tongfang

8%:

From 2005 to 2011, housing prices rose rapidly in the Chinese real estate market. Average housing prices in the country tripled from 2005 to 2009. The overheated real estate bubble started to deflate in late 2011, when housing prices began to fall following government policies passed about citizens unable to afford homes in large cities. Beijing, for instance, banned the sale of homes to those who have not lived in the city for at least five years. Beijing also limited the number of homes a native Beijing family could own to two, and allowed only one home for non-native Beijing families. Since new buildings have always been the largest market segment for alarm companies, Chinese manufacturers are facing falling sales. How to maintain steady growth was top priority in 2012. Honeywell, Bosch, and Risco found momentum in high-end sectors such as banking and airports. Bringing something unique was a game changer for Risco in 2012. Seeing the problems of individual bank branches being secured separately from headquarters’ management, Risco launched a unified central management platform that allowed CSOs to have complete situational a w a re n e s s

Dethroning the U.S. as the world’s largest car market in 2009, China's auto market is forecast to grow an average 8 percent annually until 2020, according to McKinsey & Company.

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of all branches and make decisions right away. Bank branches no longer have to invest in systems that cannot communicate with one another. The HQ saves money while security is enhanced.

The Way Forward

IP has been a buzzword, despite analog cameras outselling network cameras in China. Besides HD quality with more pixels, network cameras also bring new challenges. Due to the lack of IP know-how among installers, Chinese manufacturers have to establish more branches and recruit engineers with IT backgrounds. This has put foreign companies who rely on agents to increase market share in an awkward situation, since agents tend to focus more on project bids and

â&#x2013;˛ China is not only riding fast as a manufacturer in the security industry, but also as a market for security equipment.

camera sales instead of IP training and recruiting. Installers are in desperate need of IP know-how, while training from surveillance companies are in short supply. To gain market share and increase

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brand recognition, foreign companies are approaching the Chinese market differently. Axis Communications and Mobotix focus on high-end markets and large projects such as government and high speed rail, since system

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Regional Perspective

integrators with such IT knowledge and capability are limited in these market segments. Bosch Security Systems, Honeywell Security, Pelco by Schneider Electric, and Samsung Techwin are eager to target the mid-end market and second- and third-tier cities. To be more competitive, these companies have established locally manufactured product lines. Despite price competition, the mid-end market is growing with spare room for everyone. Japanese brands seem to keep their momentum when they laid solid foundations in applications such as banking and city surveillance, however, with political friction between China and Japan, city surveillance projects are likely to fall into the grasps of local companies. Application-specific products

The spread of IP technology is driving the convergence of digital systems across multiple areas. It has improved and forced manufacturers to accelerate the speed of innovation across diverse applications. Learning to provide application-specific products is the way forward and will be the deciding factor in a company‘s survival. Deploying low pricing tactics is something that has become common for some Chinese suppliers. But this surely leads to short-lived success. When manufacturers have their technology and unique products, they are no longer dictated by price wars. According to IMS Research, products must be designed and marketed towards a specific vertical market. For example, a retail-focused camera might have built-in people counting analytics and other limited features to reduce the price of the product. A camera designed for the transpor-

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scale, handling more than just security matters, adding measurable long-term ROI and lowering TCO. All of these is made possible with IP and Tiandy is sure to ride this tide.” Integrator Swan Song?

▲ When manufacturers have their technology and unique

products, they are no longer dictated by price wars.

tation or critical infrastructure markets might have megapixel resolution or high image quality as well as more advanced video analytics. IP migration adds complexity in network setting and configuring. Any installer would choose manufacturers with the fullest product ranges and simplest network settings. Thus, manufactures are providing more customized solutions than before. Some, such as Sunell, will focus on not just front-end surveillance equipment but also launch NVRs, storage, and even switches. Others provide both products and integration services. Still others continue to emphasize their products and offer comprehensive solutions by collaborating with partners. Kedacom believes that comprehensive offerings, value-added features plus constant innovation are ways to long-term success. Tiandy Digital Technology is eyeing the integration opportunities beyond security. “IP is driving the convergence of digital systems across multiple areas and diverse applications such as access control, human resources, finance, production, and logistics. Open-platform IP video is enabling business optimizations on a larger

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As competition heats up, some well-known Chinese brands such as Dahua and Hikvision are speeding full-throttle directly to end users. Their aggressiveness has impacted system integrators directly. System integrators are facing unprecedented pressure facing constant profit shrinkage and direct competitions from manufacturers. Some integrators are expanding their service offerings by transforming themselves into SI/manufacturers selling products in order to maintain solid growth. ZTE Netview, for instance, started out in networking and now consults, installs, and supplies smart-city solutions. It provides not only consultancy and integration but also surveillance equipment, from cameras to VMS. One strategy some integrators use is to focus on specific vertical markets, as the knowledge gained from one project can be applied to other ones in the same vertical. For instance, by collaborating with brands with complete portfolios from cameras to VMS, Sobey will fully take advantage of its experience in smart cities and extend it to banking and traffic management. Another system integrator, Ragile, will maintain its strong footing in verticals with opportunities for design and consultancy revenues, such as transportation. Despite tougher times ahead, integrators still need to provide the highest quality to customers. Keeping track of major developments from their product vendors will be fundamental.

APPLICATION CASE