I think the growth rates for network video slowed down during 2009 because of the general downturn. There is a lot of optimism right now in general in the market, maybe even too optimistic about everything coming back in 2010. But we see it as a steady improvement and we expect 2010 to be on the growth path again but maybe not really up to that of a 30-35 per cent year. It will probably take another year before we can get back to that kind of growth rate.
So you expect to go beyond 12 months before you actually get to a tipping point where everybody decides to invest in digital solutions?
I'm not sure which one is the tipping point. I think we are getting close to the tipping point in some countries like those in EMEA where we are at 40 per cent penetration. That is where we have the tipping point and that is typically two to three years away in all the other markets. There are only some small specific markets that have reached that point so far.
What percentage of the deployments that you have done for your customers have been fresh installations?
I would guess that the majority is in a way fresh. One of our challenges is we have a two-tier business model where we sell to distribution channels. We sell to system integrators who address the complete solution needs of the users. Because of this model, we're not exposed to all the installations that are done with our products. So we actually don't have the data. So even if I would like to, I couldn't answer it fully.
But the estimate is the majority are new installations, fresh installations. It's not that oftenit happens but it's not that oftenthat you take out the already existing analog cables and replace them with network cables. It's unusual but it's going to come in the future because eventually enterprises will need to modernise their setups.
In those cases where you already have an existing installation, we do have a bridging product as well. We have something called an encoder or video server, which is a box that takes the analog signal from the analog camera and translates it to network signals. So you can connect it to the same computer-based system.
And often in an existing installation with analog cameras, if they want to modernise and computerise their systems, they use encoders instead. So then they can protect their investment in the analog solution. This bridging product is good because we can reach into an existing installation but it will also prolong the time until we can get the penetration we want for networked-video.
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