The core technology is the key to security development at the end of the price war

The security industry in China has maintained an annual growth rate of 30% in the past five years. Compared with the speed of development of other industries, the security industry can be described as a breeze. Especially under the favorable conditions of the Beijing Olympics, Shanghai World Expo, and the construction of safe cities, the Chinese security industry is developing rapidly with strong momentum.

However, the development of the security industry in China for more than two decades, of which the previous decade is almost dominated by imported products, most Chinese security companies have entered the security industry through the nature of trade. Especially in the Pearl River Delta region, the first pot of gold was dug using natural geographical advantages, and at the same time, the idea of ​​manufacturing was initiated. After 1995, the domestic industry began to form a manufacturing trend. However, the number of small and medium-sized security companies in China so far is still in a state of shallow processing. Utilizing the advantage of cheap labor, the main means of market competition still depends on price wars.

Since the beginning of 2011, the price of DVR products has experienced a greater decline, which has subsequently led to lower prices for other products in the security industry. And this turmoil did not show the momentum of ending. In the beginning of May, another round of price cuts was set off again. From the comparison of the annual financial statements of several listed companies in the security industry, it is not difficult to find that the growth of profits and income is not symmetrical. For example, Hikvision, Dasit Intelligence, and Anjubao are all the same.

This illustrates a problem, the profit rate is declining. This shows that not only the monitoring field, but also the growth of sales in other security areas since 2007 is greater than the profit growth rate. The price war can only bring about a vicious circle. Any enterprise that wins in the fierce market competition is a company that holds the market discourse or pricing power. To master the right to speak in the market, you must master the core technology to improve your competitiveness. Based on the scientific and technological content of products and quality assurance, and through the scale of production and marketing to strengthen the competitiveness of enterprises is the king.

However, our security companies lack mastery of core technologies, or stay in the simple stage of lining up. Many companies are just processing plants that simply assemble various imported accessories. The key technology is controlled by people, so that others can catch the development of the throat, they can not occupy the high end of the industry chain. The most advanced core technology can not be bought, and changing the market for technology is just a good wish. This is a common curse for Chinese manufacturing. CCD in the field of monitoring, pyroelectric sensors in the field of infrared detectors, Fresnel lenses, etc. The core components of these security products are in the hands of foreign companies.

Take the surveillance camera as an example. The camera is mainly composed of a CCD (or CMOS), a DSP, and a lens. The main function of the CCD (or CMOS) is to acquire an image. The function of the DSP is mainly to process the image, which belongs to the key technology of the camera. At present, there are not many security companies that can really master DSP technology, and there are only a few who have mastered CCD technology. At present, CCD resources are mainly monopolized by Japanese companies. Most domestic camera manufacturers use SONY and SHARP CCD chips.

At the just-concluded IoT Expo 2011, there were a few companies exhibiting companies that could independently develop smart card chips. At the expo, the reporter saw that many domestic SMEs are doing the final assembly of products and are at the lowest end of the industry chain, and their profits are very limited.

In the high-tech field, whoever owns technology will own the market. Only by continuous innovation can companies be up-to-date and remain young. When our company grows to a certain scale and poses a threat to the international counterparty market, they will immediately impose a very strict technical blockade on us. At present, China's security industry is in urgent need of transformation, and it attaches great importance to research and development based on high-tech achievements. The emphasis on R&D of core technologies is the real solution.