Omdia: Surveillance market set for 12.8% growth
The global video surveillance market is expected to grow 12.8% in 2026, with rising hardware costs rather than higher shipment volumes driving much of the increase.
The market grew 4.3% to $27 billion in 2025, according to new research from Omdia, which identifies software growth, tighter cybersecurity regulation and a strategic shift among Chinese manufacturers as three major forces reshaping the industry.
North America and Western Europe recorded strong growth last year, supported by AI-enabled upgrades, faster replacement cycles and regulatory requirements. Emerging markets also expanded on the back of government infrastructure investment and urban development.
China moved in the opposite direction. Its video surveillance market declined 2% in 2025, marking a fourth consecutive year of contraction.
$27bn global video surveillance market in 2025
+4.3% annual growth
+12.8% forecast growth in 2026
-2.0% China market decline in 2025
Hardware costs push market growth
Omdia expects global market growth to accelerate to 12.8% this year. However, much of that increase will come from higher component prices rather than stronger unit demand.
The expansion of hyperscale AI data centers is increasing competition for memory chips, storage devices and semiconductor manufacturing capacity. This is extending procurement lead times and raising costs for surveillance hardware.
Software, regulation and China reshape the market
Omdia identifies three broader strategic shifts.
First, software is taking a larger share of surveillance spending. AI-powered analytics, Video Surveillance as a Service (VSaaS) and demand for outcome-based solutions are reducing the industry’s dependence on hardware sales alone.
Second, cybersecurity and data sovereignty rules are becoming more important market barriers. India’s surveillance market fell 9.4% in 2025 following the introduction of new certification requirements. Regulations such as the EU Cyber Resilience Act are also increasing pressure on manufacturers to incorporate security by design.
Third, Chinese vendors are shifting their focus from market share to profitability. Manufacturers are withdrawing from low-margin segments, investing more selectively in differentiated AI capabilities and applying tighter criteria to projects.
Three shifts reshaping video surveillance:
1 Software captures more market value
2 Cybersecurity and data sovereignty rules converge
3 China shifts from volume to profitability
Omdia Senior Principal Analyst Tommy Zhu expects component inflation to continue through 2027. He said organizations should reconsider storage strategies and explore vendor-agnostic video management platforms and hybrid cloud architectures to limit costs and strengthen supply chain resilience.
