Will Taser’s body camera and storage business continue to flourish despite increasing competition and high costs?
Report Available: June 16, 2016
Blueshift’s initial research shows TASR at the forefront of the expansion in body camera sales and utilization, winning new contracts with large, high-profile police departments. But the competition is coming on strong, industry-wide hurdles include high storage costs and legal/privacy issues, and critics raise concern over the lack of bidding process when departments choose TASR.
- TASR’s Q1 beat expectations for earnings and revenue. Sales of its body camera business were up 51% year to year, driven largely by Evidence.com users. Bookings increased 16% sequentially and 126% year to year. The company shipped over 8,000 cameras in the quarter. Higher expenses, however, offset some of those gains.
- TASR has been aggressively seeking contracts to outfit the largest police forces in the country with its body cameras, including the NYPD which recently completed a 15-month pilot program and is attempting to secure an expanded next trial phase with 400 cameras covering about one-quarter of the city’s precincts. This comes on the heels of a 5-year $31 million deal with the LAPD for 7,000 cameras. The deal, however, is being held up by L.A. city council members, in part because of the cost of hiring more than 100 employees to operate the program. The Austin city council is deciding this week on body cameras for its police force as the city would deploy 1,700 body cameras over the next three years at a cost of $12 million. Local groups are asking for more clarity on policies regarding the public release of those videos. And San Jose’s police department announced last month that it had chosen TASR body cameras, to be rolled out this summer.
- Detroit police officers will be equipped this summer with 1,500 cameras from Watchguard Video in Texas, a $5 million contract announced this week. TASR’s proposal would have cost nearly $9 million. Miami police recently purchased 1,500 body cameras from Vievu with a $5.5 million contract through 2021 after a bidding process that lasted nearly a year. The other hurdles for TASR beyond rising competition is the high cost of video storage and the legal issues of privacy rights for citizens. One report showed that one department would spend $2 million for 900 cameras with most of it paying for storage costs.
- Critics say TASR has an unfair advantage as many departments have signed contracts without a formal proposal or bidding process. TASR has contracts with police departments for its stun guns and detractors say the company is using those agreements as a way to skip the proposal phase and gain adoption of its body cameras. In the case of LAPD’s decision to go with TASR, competitors cried foul as the department piggybacked on the search of another city’s agency in order to make its own decision to go with TASR. The counter-argument is that the need for body cameras is so great that the proposal process, which can sometimes take up to one year, would be too time consuming and cumbersome.
- Blueshift’s Feb. 12 report said TASR’s body camera business would continue to grow as its cameras increasingly are adopted by law enforcement agencies throughout the country as funding becomes available. Since Blueshift’s June 15, 2015 and Oct. 20, 2015, reports, adoption has increased and clarity around legal standards has improved, but questions surrounding the availability of funding remains. Police, law-enforcement, industry specialists and lawmakers who commented foresee increased body camera adoption in 2016. Concerns over cloud security have fallen since October. While cloud storage solutions have multiplied, hesitancy over adopting the cloud is tied to ongoing unknown storage fees. More competitors are entering the market with new offerings and likely will challenge Taser’s position in data management and data storage solutions.
How are police departments evaluating TASR vs. its competitors? What factors are being considered when deciding which body camera provider to choose? What role is Evidence.com playing in the decision to choose TASR? How are the legal and privacy issues effecting the body camera industry? To answer these and other questions, Blueshift will issue a market research report by gathering data from independent sources in the following areas: Police departments, Non-police law enforcement, Vendors/competitors, Industry specialists, and Lawmakers.
Companies: Taser (TASR), Digital Ally (DGLY), Motorola Solutions (MSI), Sony Corp. (TYO:6758), Panasonic Corp. (TYO:6752), Amazon (AMZN), Microsoft (MSFT)
Research Begins: May 30, 2016