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| AM32003 |
| AMA ELECTRONIC SECURITY & FIRE ALARM SYSTEMS MARKET SEPTEMBER 2003 |
| Overview |

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This report covers: security systems, access control, Intruder Alarms, CCTV, closed circuit television, Cameras, Recorders, Monitors, distribution structure for security and fire alarm products, Contractors, Installers, fire protection, extinguishing systems, alarms, extinguishers, sprinkler systems, smoke detectors,
Companies covered include: Apollo Fire Detectors (owned by the Halma Group), Gent, Wormald Ansul (owned by Tyco International), How Fire Group, Preussag Fire Protection, Blick, Ademco Microtech, Dedicated Microcomputers, Norbain, Baxall, ADT, JVC, Sanyo, Panasonic, PAC International, Bewator, KABA, SensormaticTyco, Kidde, Novar, Chubb, ASSA, Halma, Honeywell, Cooper Menvier, Bosch
| INTRODUCTION and OVERVIEW |
| AMA Research have published the SIXTH EDITION of the 'Electronic Security and Fire Alarm Systems Market Report - UK 2003'. This report contains original input and a detailed assessment of the market; the report represents excellent value for money to those in the industry or considering entry. |
| This market has experienced good growth in recent years with a value exceeding £1.5 billion in 2002, driven in particular by an increasing level of public concern for improved protection from security and fire risks. |
| Product areas covered include:- |
| Security Alarm Systems |
| Fire Extinguishing Equipment |
| Access Control |
| Smoke Detectors |
| Fire Alarm Systems |
| CCTV |
| Individual product sectors are covered in detail, with a review of recent trends, interpretation of current developments and future prospects. The report is presented to answer the need for both a comprehensive review of quantitative market developments combined with analysis of the qualitative background reasons and influences affecting the UK security market. |
| Key issues of particular interest: - |
| Lower levels of construction, the economic climate and increasing maturity is affecting all sectors of the market. |
| Intruder Alarms and Fire Alarm Systems increasingly dominated by replacements as they approach maturity. |
| Technological developments fuelling the trend towards integrated systems, with major implications for new product developments. |
| Legislation and policies relating to security equipment and their influence on the overall market. |
| The report content includes:- |
| THE MARKET |
| Historical background - development of the market, influencing factors, economic influences etc. |
| Market size by volume and value - development from 1996-2002 in both security and fire systems, with forecasts up to 2006. Factors influencing future growth potential in domestic and non-domestic applications. |
| SECURITY SYSTEMS |
| Intruder Alarms - Market size - volume and value - historical volume trends from 1995-2003. |
| Factors influencing the market - crime rates, APCO policy, insurance companies, domestic & non-domestic construction, new technology. Long term market prospects and influencing factors. |
| Household Ownership Levels - reducing potential for first time installations. |
| Domestic/Non-domestic market - volumes by sector, professional/DIY fitted alarms (share by volume), factors influencing each sector. |
| CCTV - Market Size - value for CCTV from 1996-2002 and forecasts to 2006. Factors influencing the market - crime rates, success of town/city centre schemes, product developments. |
| Review of CCTV products - product mix and trends. |
| End Use Application areas - mix of sales into commercial, retail, industrial & public sectors, potential growth areas. |
| Access Control -Market size - Value, development of market 1996-2002 with forecasts to 2006. |
| Review of access control system types - mix of sales, product trends, future developments. |
| Buying and Specification Process - range of equipment, specification and purchasing responsibility for equipment. |
| FIRE PROTECTION/EXTINGUISHING SYSTEMS |
| Market size by value 1996-2002 - product analysis (alarms, extinguishers/sprinkler systems, smoke detectors) - market size by value, growth prospects to 2006. |
| Factors Influencing Market Growth - non-domestic construction, regulations, slowing of growth of smoke detector market in domestic sector, market maturity. |
| Household Ownership Levels - smoke detectors, fire alarms, extinguishers, blankets, sprinkler systems. |
| Buying and Specification Process - range of equipment, specification and purchasing responsibility for equipment. |
| DISTRIBUTION AND SUPPLY - SECURITY & FIRE |
| Review of distribution structure for security and fire alarm products - manufacturers, specialist distributors, electrical wholesalers, DIY Multiples, Independents etc. |
| Sources of Supply - differences between security and fire equipment. |
| Review of major suppliers in Security and Fire Systems Markets - Leading companies, specialist suppliers. |
| Contractors/Installers Market - Major Contractors, specialist and non-specialist, external influences (insurance companies, growth of DIY installations, APCO policy etc.) Future prospects. |
| Review of Imports and Exports for alarm systems and extinguishers. |
| The overall Electronic Security & Fire Protection Market has experienced lower levels of growth in recent years with the Electronic Security Market estimated at £1.16bn per annum and the Fire Protection Market worth an estimated £354m in 2002 |
| The electronic security market enjoyed considerable success throughout the latter half of the 1990s, reflecting growing concerns over safety and security issues both within domestic and non-domestic situations, technological developments and changing legislation and Millennium related projects. |
| The access control systems and closed circuit television (CCTV) sectors have continued to perform reasonably well, although there is evidence of lower levels of growth. The intruder alarm sector is much less buoyant as this sector reaches the mature stage of the product lifestyle. |
| The maturity of the intruder alarm market has resulted in a greater emphasis on replacement products supported by technological developments and product innovation. Additionally, a tightening of the ACPO (Association of Chief Police Officers) policy regarding false alarms in 2001 is gradually prompting replacement levels, although other factors such as the economic situation may affect some commercial sectors in the short term. |
| In the longer term, technological developments, changing legislation and integration with other electronic security products may support growth. The high level of suppliers in the market is likely to maintain the high level of price competition. |
| The growing evidence regarding the effectiveness of CCTV in reducing crime rates in the areas under surveillance has supported the growth of this sector in recent years. Government funding has also encouraged growth and the recently publicised government CCTV campaign, with a total of £170m allocated to a variety of schemes across England and Wales. |
| However, the increasing number of suppliers and falling cost of computer hardware is resulting in the average price of CCTV systems declining. Consequently the level of value growth during the last two years has been significantly lower compared to the rapid growth experienced in the 1990's. Technological developments have provided some short term growth opportunities but competition remains intense. |
| The Electronic Access Control Systems market experienced rapid growth throughout the 1990's, largely due to the increased awareness of crime and concern for security in commercial organisations. More recent trends indicate that market growth has slowed. This is largely due to the increasing level of price competition in the market, which is pressurising margins in addition to the trend towards replacement products as the market matures. Other factors include the falling cost of technology. |
| Future developments involve the integration of access control systems with CCTV, intruder alarms and other building management systems. |
| In the UK, Fire Protection is now a mature market sector worth an estimated £354m (manufacturers selling prices) in 2002. Service and maintenance contracts provide a source of revenue, but the volume of new business is heavily reliant upon new construction activity. The growth of Millennium and lottery related projects boosted the non-domestic sector throughout the latter half of the 1990's. However, lower levels of construction growth during the last two years has restricted the level of installations and increased the emphasis placed on replacement purchases. |
| The maturity of the fire protection market has resulted in suppliers focusing on service and maintenance contracts, which are accounting for an increasing proportion of turnover for some key manufacturers. |
| The market for domestic smoke detectors is near saturation and despite maintaining a high profile through various initiatives by the Fire Brigade and the government, sales of domestic smoke alarms are expected to decline due to high ownership levels and little impetus to replace existing products. Therefore, new installations will be largely confined to the new build sector. |
| In terms of the supply structure, the large conglomerates continue to develop their interests in all areas of this diverse market on a global scale, with a high proportion of relatively small companies specialising in niche markets. |
| Leading electronic security and fire protection suppliers includes major groups such as Tyco, Kidde, Novar, Chubb, ASSA, Halma, Honeywell, Cooper Menvier and Bosch. The major companies often compete within several market sectors and have activities spanning the whole spectrum, from manufacturing to installation and maintenance in addition to the management of their own alarm receiving centres (ARCs). |
| Companies within the fire sector include Apollo Fire Detectors (owned by the Halma Group), Gent, Wormald Ansul (owned by Tyco International), How Fire Group and Preussag Fire Protection. Companies within the electronic security and CCTV sector are more numerous and include Blick, Ademco Microtech, Dedicated Microcomputers, Norbain, Baxall and ADT, as well as companies from the 'traditional' video arena such as JVC, Sanyo and Panasonic. Major access control suppliers includes PAC International, Bewator, KABA and Sensormatic. |
| In terms of distribution, specialist distributors continue to be an important force in the network, benefiting from rapid technological change sustaining the demand for their specialist product knowledge. Distribution of security equipment and fire protection systems through the electrical wholesalers has remained static in recent years at around 9 percent. |
| The short to medium term outlook for the security market is relatively optimistic, although growth levels are likely to remain modest as opposed to the rapid development experienced in recent years. The economic uncertainty is likely to impact the short-term growth of the market. In addition, the slow growth within the construction market will affect the level of first-time installations, while the increasing level of maturity in the intruder alarm and CCTV sectors will impact growth levels. Consequently, suppliers are likely to place a greater emphasis on technical developments in order to encourage a higher level of replacement and related activities such as servicing and maintenance to add value. |
| CONTENTS and LIST OF TABLES & CHARTS | ||
| 1 | INTRODUCTION | 6 |
| 2 | SUMMARY | 7 |
| 3 | ECONOMIC ENVIRONMENT | 11 |
| 3.1 | GDP | 11 |
| 3.2 | INFLATION & INTEREST RATES | 12 |
| 3.3 | UNEMPLOYMENT & CONSUMER SPENDING | 13 |
| 3.4 | HOUSING | 14 |
| 3.5 | STERLING | 14 |
| 3.6 | CONCLUSIONS | 15 |
| 4 | ELECTRONIC SECURITY PRODUCTS MARKET | 16 |
| 4.1 | MARKET DEFINITION | 16 |
| 4.2 | MARKET OVERVIEW | 17 |
| 4.3 | MARKET SIZE | 18 |
| 4.3.1 | Intruder Alarms | 19 |
| 4.3.2 | CCTV | 21 |
| 4.3.3 | Electronic Access Control Systems | 21 |
| 4.4 | KEY MARKET INFLUENCES | 22 |
| 4.4.1 | The Housing Market | 22 |
| 4.4.2 | Contractors Output - Industrial and Commercial | 23 |
| 4.4.3 | Manufacturing Output | 25 |
| 4.4.4 | Industry Regulations | 27 |
| 4.4.5 | Security Inspectorates | 28 |
| 4.4.6 | Crime Rates | 29 |
| 4.4.7 | Arson | 33 |
| 4.4.8 | Insurers | 33 |
| 4.5 | FUTURE TRENDS | 33 |
| 4.6 | SECURITY SYSTEMS ? INTRUDER ALARMS | 35 |
| 4.6.1 | Market Background | 35 |
| 4.6.2 | Market Size | 37 |
| 4.6.3 | Future Trends | 39 |
| 4.6.4 | Household Ownership Levels | 39 |
| 4.6.5 | Domestic/Non-Domestic Installations | 41 |
| 4.6.6 | Product Mix | 46 |
| 4.7 | CLOSED CIRCUIT TELEVISION (CCTV) | 48 |
| 4.7.1 | Background | 48 |
| 4.7.2 | Market Size | 48 |
| 4.7.3 | Product Mix | 53 |
| 4.7.4 | End-Use Application Areas | 55 |
| 4.8 | ACCESS CONTROL SYSTEMS | 56 |
| 4.8.1 | Background | 56 |
| 4.8.2 | Market Size | 58 |
| 4.8.3 | Product Mix | 61 |
| 4.8.4 | End Use Application Areas | 64 |
| 4.9 | SPECIFICATION AND INSTALLATION | 65 |
| 5 | FIRE PROTECTION SYSTEMS | 67 |
| 5.1 | MARKET BACKGROUND | 67 |
| 5.2 | MARKET SIZE | 67 |
| 5.2.1 | Alarm Systems | 69 |
| 5.2.2 | Fire Extinguishing Equipment | 71 |
| 5.3 | HOUSEHOLD OWNERSHIP LEVELS OF FIRE PROTECTION EQUIPMENT | 72 |
| 5.4 | SPECIFICATION AND INSTALLATION | 75 |
| 6 | SUPPLIERS | 76 |
| 6.1 | MAJOR GROUPS | 76 |
| 6.2 | PIR DETECTORS AND CONTROL PANELS | 79 |
| 6.3 | CCTV AND ACCESS CONTROL | 79 |
| 6.4 | FIRE PROTECTION SYSTEMS | 81 |
| 6.5 | IMPORTS AND EXPORTS | 84 |
| 7 | DISTRIBUTION | 86 |
| 7.1 | CHANNELS OF DISTRIBUTION | 86 |
| 7.2 | INTRUDER ALARMS - NON DOMESTIC & DOMESTIC | 88 |
| 7.3 | CCTV AND ACCESS CONTROL | 89 |
| 7.4 | FIRE PROTECTION | 91 |
| 8 | FUTURE PROSPECTS | 92 |
| TABLES & CHARTS | ||
| TABLE 1 | THE UK ELECTRONIC SECURITY & FIRE PROTECTION MARKET £M | 7 |
| CHART 2 | INTEREST RATES AND INFLATION (RPI) FROM 1990-2005 | 13 |
| TABLE 3 | EXCHANGE RATE FLUCTUATIONS 1997-2003 - DM, DOLLARS, AND THE ECU TO THE POUND STERLING, SPOT RATES | 15 |
| CHART 4 | THE ELECTRONIC SECURITY MARKET 1999- 2006 | 18 |
| TABLE 5 | HOUSEBUILDING COMPLETIONS (000'S DWELLINGS) 1995-2005 IN GREAT BRITAIN | 22 |
| TABLE 6 | CONTRACTORS OUTPUT - NEW WORK AND RMI NON HOUSING - CURRENT PRICES (£ MILLION) 1998-2004 | 23 |
| TABLE 7 | NEW ORDERS OBTAINED BY CONTRACTORS 1994-2002 CURRENT PRICES | 24 |
| TABLE 8 | LEVEL OF UK MANUFACTURING OUTPUT 1997-2003 (1995 = 100) | 25 |
| TABLE 9 | EXCHANGE RATE FLUCTUATIONS 1997-2003 - DM, DOLLARS, AND THE EURO TO THE POUND STERLING, SPOT RATES | 26 |
| TABLE 10 | NOTFIABLE OFFENCES RECORDED BY THE POLICE IN ENGLAND & WALES - 1997-2002 (000'S) | 28 |
| TABLE 11 | FEAR OF CRIME -ENGLAND AND WALES | 29 |
| TABLE 12 | OWNERSHIP OF HOME SECURITY DEVICES 2002 | 30 |
| CHART 13 | VOLUME OF INSTALLATIONS OF INTRUDER ALARMS 1995-2003 | 36 |
| TABLE 14 | UK SECURITY ALARM MARKET 1996-2006 (£M RSP) | 38 |
| TABLE 15 | UK HOUSEHOLD OWNERSHIP LEVELS OF INTRUDER ALARMS (1980?2006) | 40 |
| CHART 16 | UK INTRUDER ALARM MARKET ? DOMESTIC/NON?DOMESTIC INSTALLATIONS 2002 BY VOLUME | 41 |
| CHART 17 | PROFESSIONALLY & DIY FITTED INTRUDER ALARMS 2002 BY VOLUME | 42 |
| CHART 18 | DIY FITTED ALARM MARKET - DOMESTIC APPLICATIONS 1993-2003 BY VOLUME | 43 |
| TABLE 19 | NON-DOMESTIC INSTALLATIONS OF INTRUDER ALARM SYSTEMS 1995 - 2003 BY VOLUME | 44 |
| CHART 20 | NON?DOMESTIC ALARM INSTALLATIONS BY END?USE APPLICATION AREA ? 2002 | 45 |
| CHART 21 | PRODUCT MIX BY SIGNAL TYPE 2002 (BY VOLUME) | 46 |
| TABLE 22 | UK CCTV MARKET (END-USER PRICES) ? 1996?2006 (£M) | 49 |
| CHART 23 | COST STRUCTURE OF A TYPICAL CCTV SYSTEM 2002 | 53 |
| CHART 24 | MIX OF CCTV INSTALLATIONS BY END?USE APPLICATION AREA 2002 BY VALUE | 55 |
| TABLE 25 | UK ACCESS CONTROL MARKET 1996?2006 (£M END-USER PRICES) | 58 |
| CHART 26 | MIX OF ACCESS CONTROL SYSTEMS BY VALUE - 2002 | 61 |
| CHART 27 | MIX OF ACCESS CONTROL INSTALLATIONS BY END USE APPLICATION AREA | 64 |
| CHART 28 | UK FIRE PROTECTION MARKET 2002 BY MAJOR PRODUCT - VALUE £M MSP | 68 |
| TABLE 29 | UK MARKET FOR FIRE ALARMS AND DETECTORS 1996-2006 (£M MSP) | 70 |
| TABLE 30 | UK MARKET FOR FIRE EXTINGUISHING EQUIPMENT 1996-2006 (£M MSP) | 71 |
| TABLE 31 | HOUSEHOLD OWNERSHIP OF FIRE PROTECTION/DETECTION EQUIPMENT 2002 | 73 |
| TABLE 32 | EXPORTS & IMPORTS OF FIRE & BURGLAR ALARMS - 1994-1999 (£M MSP) | 84 |
| TABLE 33 | EXPORTS & IMPORTS OF FIRE EXTINGUISHERS 1994-1999 (£M MSP) | 85 |
| CHART 34 | SECURITY & FIRE DETECTION SYSTEMS MARKET STRUCTURE | 86 |
Text © 2003AMA Research
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Last updated by Jacob van Eldik 26th September 2003