“With the emergence of networked IP video surveillance cameras and IP video servers—along with the rising use of DVRs — video surveillance is moving beyond traditional security and into new applications such as transportation, retail, government and even home networking,” said Mark Kirstein, vice president of multimedia content and services at iSuppli. “This expansion is being helped considerably by the idea of networked video surveillance … Because of this, IP cameras will experience continued growth in surveillance, displacing existing closed circuit TV cameras with modern technology that can be networked into larger security systems,” Kirstein added.

Telecom operators are expected to offer IP video surveillance as a value-added consumer broadband service, says iSuppli. The firm predicts 2011 will be the first year that IP cameras overtake CCTV cameras as the dominant equipment in video surveillance.

iSuppli projects the market for surveillance-camera semiconductors will hit $1.25 billion in 2011, more than double the $525 million in 2006. A major shift in semiconductor revenue likely will be propelled by a trend to IP cameras, the company believes. Sales of video processor and interface chips, such as Ethernet, Power over Ethernet and Wi-Fi will grow dramatically. However, spending on image sensors are predicted to fall off based on relentless price declines and accelerated adoption of less-expensive CMOS image sensors.