Will coronavirus impact technology supply?

Posted On 03 Mar 2020
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Although the coronavirus outbreak has had only a minimal impact on the video surveillance market so far, the industry still faces a risk from falling demand and a potential production bottleneck spurred by labour and component shortages in China, according to Omdia.

Production of video surveillance equipment is heavily concentrated in China, with the country accounting for 90 percent of global production of video surveillance cameras, and 45 percent of worldwide global market revenue in 2019. As a result, any coronavirus-related disruption to production, supply chains or workforces in the country could have a significant impact for a global video surveillance market totalling $19.9 billion in 2019.

“Given China’s status as the world’s largest producer and consumer of video-surveillance cameras, the country wields a proportionately massive influence on the global market for these products,” said Tommy Zhu, senior analyst, video surveillance, at Omdia. “Video surveillance equipment suppliers in China currently are contending with reduced production because of a lack of manpower and delays following the Lunar New Year. Meanwhile, domestic demand for general-purpose video surveillance products is likely to cease or suffer delays as the Chinese government focuses on coronavirus control.

“If the epidemic continues to spread and infections rise in number in the second quarter, the effects of the coronavirus on video surveillance hardware supply will be severe, not only in China but worldwide,” Zhu said.

According to Omdia, in the best-case scenario, with the epidemic successfully contained by the end of March and the disruptions reduced by April, the impact of the virus on the video surveillance market will be minor. However, if the epidemic continues to spread and infections rise in number in the second quarter, then the effects of the coronavirus on the video surveillance industry and on many other markets will be severe.