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Executive Summary

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EXECUTIVE SUMMARY

The UK market for access control systems increased significantly between 1995 and 1998 sustaining a strong phase of growth. In 1999 MSI estimate that the market increased by 5 percent to reach a total value of œ193 million (euro299 million) at end user prices.

MSI believe that on-line systems accounted for 42 percent of the total value market in 1999, compared with 41 percent the previous year. In the same year, audio/video entry systems accounted for 33 percent of the value market, whilst the proportional importance of stand-alone systems declined to account for 25 percent of the total value market.

Magnetic readers are believed to have accounted for 58 percent of the on-line access control systems market in value terms in 1999. MSI believe that the decline in terms of proportional importance compared with the previous year was largely attributable to growth in demand for proximity technology which in the same year increased by 1 percent in terms of proportional importance to account for 38 percent of the total market value. Demand for technologies such as biometrics and smart cards is expected to increase during the next five years.

Technological change in the access control systems sector has been a major contributory factor to an increase in demand from end users between 1995 and 1999. MSI believe that the commercial sector accounted for 29 percent of the total UK value market for access control systems in 1999. In the same year, the industrial sector is believed to have accounted for some 24 percent of the total market. MSI believe that the proportional importance of the commercial and industrial end user sectors has increased as a result of organisations installing access control equipment to protect premises, equipment and employees.

MSI have identified a number of factors which are believed to affect demand for access control systems. These are:

• the real and perceived level of crime
• visitor and staff security
• monitoring and restricting movements
• integrated systems
• economic trends
• construction trends
• year 2000 compatibility

MSI forecast that the total market value for access control systems will increase by 4 percent in 2000. MSI believe that technological developments and lower prices will continue to stimulate demand from end users. Moreover, an increased range of products available to the end user will mean that selecting a system to suit the specific needs of the customer is expected to become easier.

The competitive trading environment of the UK access control systems market means that companies operating in the sector must place particular emphasis on quality in order to satisfy the demands of projects and customers. As a result, conforming to accredited quality assurance schemes, such as ISO9001 have become essential to manufacturers operating in the UK access control systems sector.

There has been a large amount of acquisitional activity within the electronic security systems industry and the concentration of the industry has increased, albeit moderately.

MSI believe that the principal reasons why companies have undertaken acquisitional activity include:

• to strengthen their market position
• to improve service levels to customers
• to extend product portfolios, particularly with the development of integrated security systems
• to compete in the global market place
• to achieve cost savings and economies of scale
• to achieve increased capital efficiency

Text © 2000 MSI

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Last updated by Paul Tucker 23rd June 2000