Network cameras poised for growth

Who wouldn’t want a network camera? A device that connects to your wired or wireless network so you can monitor your home while you’re away is just plain cool.   

So with such obvious appeal, why is the market still less than half a million units worldwide?  

The main reason is price.  Until recently, network cameras – or Webcams – have been targeted at the government and business sectors, which still account for about 75% of the market’s total volume. The government and military use Webcams for security, while the owner of your local Subway shop uses his Webcam to monitor employees, to make sure they’re not out taking a third smoke break in an hour.   

While government and businesses wouldn’t hesitate to plop down a grand or more for a camera, consumers wouldn’t dream of it. But prices have begun dropping dramatically. Today, low-end cameras can be had for less than $300, some less than $200. Axis sells devices in the sub-$200 range, and the camera Linksys debuted last fall, the Wireless-B camera, costs about $180. You can bet D-Link, Toshiba and Panasonic will jump in the low-end market soon. 

The other barrier to adoption has been lack of availability in stores and through service providers. When a market is too small for volume shipments, prices remain high. But with the availability of lower-priced consumer units meant to ship in higher volumes, e-tailers such as Buy.com and Amazon are now in the network camera business.      

Consumers may also be able to get a network camera through their broadband provider as part of a value added service package. While none of them are offering cameras yet, a handful of DSL and cable providers I’ve talked to have network cameras in their labs. What’s holding up services? Providers are still trying to figure out how to make money off them. 

So where is the biggest market for network cameras today? Japan, of course, the country that brought us the camera phone. For two years, Japanese consumers have been using network cameras mainly to monitor locations outside their homes, like the front stoop. But vendors agree that the U.S. isn’t far behind.