The Competitive Landscape of the Machine Vision Industry in 2022

Time: 2023-07-17

Introduction: From theoretical research to technological maturity, breakthroughs to scene penetration, the application boundaries of artificial intelligence are constantly being broken and reshaped, giving rise to a series of more impactful and disruptive scene applications. At the same time, the integration of AI and multi-dimensional technology continues to form new service models and industrial ecosystems, opening up more segmented blue oceans

From theoretical research to technological maturity, breakthroughs to scene penetration, the application boundaries of artificial intelligence are constantly being broken and reshaped, giving rise to a series of more impactful and disruptive scene applications. At the same time, the integration of AI and multi-dimensional technology continues to form new service models and industrial ecosystems, opening up more segmented blue oceans.

Machine vision, as the most widely used branch of artificial intelligence, can be applied in various fields such as industry, agriculture, medicine, military, aerospace, meteorology, astronomy, transportation, safety, scientific research, etc. Based on the rise of machine vision multi scene applications and their irreplaceable performance advantages, the blue ocean of the trillion scale market has emerged, and various industries are accelerating their influx.

Since 2010, the global machine vision market has shown a continuous upward trend, with a compound growth rate of 14.48% in the past five years. Although machine vision in China started relatively late, its compound growth rate during the same period was much higher than that of the global machine vision industry. In 2015, the market size was only 3.1 billion yuan, and in 2019, it increased to 10.3 billion yuan. From 2015 to 2019, the CAGR reached 35.01%.

On this long slope and thick snow track, identifying the market positioning of the enterprise, accurately targeting its target customers, and focusing on customized solutions are the key to achieving high-quality and sustainable development for the enterprise, and also the fundamental way for the enterprise to stand out in the competition circle.

The development pattern of four directions and a stable market structure
At present, the machine vision market in China has formed a market pattern with a stable first tier position and fierce competition between the second and third tiers, showing a trend of development with four sides competing. In the first tier market, there are two major categories. One is well-known brand merchants represented by Kearns, Cognex, and Hikvision Robotics. They have comprehensive product capabilities, complete channels, and brand influence that is highly trusted by end users, but rarely provide products and services directly to end users.

The other type is veteran integrators, who start from non-standard automation and deeply explore the rigid requirements in a specific scenario to form standardized products, thereby circulating. Representative enterprises include Tianzhun, Lingyunguang, Daizu Laser, and a large number of AOI equipment manufacturers. These veteran integrators have strong automation, electrical, and structural capabilities, and have unique expertise and technical accumulation in software and visual applications in a specific field. However, their adaptability to special needs in some special scenarios is not high.

The continuous growth of overall market demand and the continuous increase of national support policies have attracted more and more enterprises to enter the second and third tier, and industry competition is becoming increasingly fierce. Among these enterprises, some are focused on the hardware field, such as Mechammander, Elson, Ruben, Daheng Image, Tuyang, and other start-up tycoons. Their main focus is mainly in the 3D field, which has to some extent promoted the process of 3D camera localization and greatly reduced the landing threshold and cost of 3D visual applications.

The other part is visual startup companies with software and algorithms as their core, such as Deep Eye Technology, Achu Technology, and Jushi Intelligence. These companies prioritize assets, technology, and products, empowering integrators without research and development capabilities with a more internet-based approach and product logic. They help integrator customers expand their business scope and improve delivery capabilities, making significant contributions to promoting the implementation and popularization of visual projects.

Focusing on differentiated opportunities, the driving force for high-level planning of small and medium-sized enterprises
Unlike the relatively stable market pattern, the competition among end users has significant differentiation. Except for hardware companies that rarely select customers, the development paths for end users vary. For example, most of the established integrators and AOI equipment manufacturers are aimed at leading customers in the industry, while some specialized and innovative entrepreneurial enterprises are mainly small and medium-sized enterprises. The two complement each other and promote the healthy development of the market.

As is well known, the polarization of customer value has almost become an iron law in the market, and for enterprises, the contribution rate of major customers even exceeds 50% of total profits. The same is true in the machine vision industry, similar to many upstream and downstream companies in the Apple industry chain, where a single major customer accounts for more than 30% to 40% of revenue. So a large number of traditional integrators and emerging entrepreneurs have a particular preference for the top customers in the industry.

In addition, the significant advantages of the large customer system are also an important factor that attracts enterprises to flock. Firstly, the demonstration role and benchmark significance of major clients are obvious; Secondly, the needs of major customers have been demonstrated by multiple departments and are relatively real and clear; The strong financial strength of its three major customers has reduced suppliers' concerns about paying for products after they are launched; The last and most crucial point is that the potential demand for large customers is very large. After completing the validation of the first set, the possibility of replication from a single factory to within the group creates greater business opportunities for the subsequent sales of products.

However, opportunities and pressures coexist, and the advantages and disadvantages of the big customer system are equally obvious, especially for small and medium-sized enterprises and start-ups. The opportunities and threats of big customers are also significant, and problems such as high demand from multiple departments, long project approval cycles, complex procurement decision-making processes, and long payment methods may all lead to increased financial pressure on enterprises, seriously affecting their daily operations and future development.

From another perspective, companies that seize the large customer market often have rich product reserves, outstanding research and development capabilities, and strong financial backing. In such an environment, early startup companies are difficult to break through and demonstrate their competitiveness.

Industry insiders say that entrepreneurs who have just entered the visual field should be more inclined to pursue a development path of exploring leading large customers in the industry after achieving stable development, with a focus on exploring the rigid needs of small and medium-sized enterprises in the early stage. Although the demand for small and medium-sized enterprises is not high for a single enterprise, the decision-making process from clear demand to product implementation to procurement and payment is short, and the project implementation cycle is short. For start-up companies, the financial pressure is low and profits are guaranteed. This is also what Deep Eye Technology, a domestic one-stop AI visual solution provider, is doing.

Nowadays, the degree of industrial agglomeration of small and medium-sized enterprises is relatively high, and most of them develop in the form of industrial clusters, which can easily form economies of scale, reduce costs, and form strong market competitiveness. For example, household appliances in the Pearl River Delta, sports shoes in Putian, sweaters in Hangjiahu, and so on. After one of these enterprises has achieved results, it has demonstration and driving significance for the entire industry. It can be seen that small and medium-sized enterprises in the field of machine vision can achieve remarkable achievements and promote the development of the entire industry by identifying their niche markets and selecting suitable customers.

Build new competitive advantages, increase technology research and development to build hard core strength
According to data from the National Bureau of Statistics, in 2021, the operating revenue of manufacturing enterprises above designated size was 112.7885 trillion yuan, and there were 408732 enterprises above designated size. Among them, there were less than 600 super large enterprises with revenue exceeding 10 billion yuan, less than 20000 large industrial enterprises with revenue exceeding 500 million yuan, and small and medium-sized enterprises accounted for over 85%. Both the number of enterprises and the economic size far exceeded that of large enterprises, However, the popularity and application scale of visual devices are far lower than those of large enterprises.

Industry insiders have analyzed that with the continuous promotion of intelligent manufacturing strategy, the intelligent transformation of small and medium-sized enterprises is imperative. In the future, China's machine vision industry will enter a period of rapid growth, and the domestic market potential is enormous.

The automation level of a single process in the production process of small and medium-sized enterprises is very high, and the connection between processes still requires a lot of human intervention. These areas that require human intervention are the value embodiment of machine vision applications. In addition, under the repeated outbreak of the epidemic, major production enterprises are facing enormous recruitment and production pressure, with a strong awareness and demand for cost reduction and efficiency improvement. Affected by multiple factors, the market will breed huge business opportunities.

For Deep Eye Technology, based on a new strategic positioning and focusing on technological breakthroughs is the key to seizing business opportunities. Entrepreneurial enterprises need to continuously strengthen their independent innovation capabilities and break through key core technologies. Creating standardized visual equipment in specific scenario needs is what every visual startup company hopes to achieve. However, achieving standardization and productization in a specific scenario requires multi-dimensional talent reserves in mechanical, structural, electrical, software, algorithms, and other fields. Moreover, the trial and error cycle is long, making it difficult to meet the highly dynamic market demand.

Therefore, for most integrators, new entrepreneurs, and industrial enterprises in urgent need of intelligent transformation, using modular and semi standardized software tools can achieve more efficient implementation of intelligent applications and quickly accumulate advantages such as technical capabilities and project experience. Deep Eye Technology, which has been committed to industrial scenarios for a long time, has taken advantage of the trend and launched a low code development platform called Light Rut Visual Vector Engine to meet market demand. Through its self-developed Sense framework visual framework and modular distributed deployment solution, Deep Eye Technology has greatly reduced the entry threshold for visual applications, greatly shortening the project validation and landing cycles.

Facing the future, under the stimulation of policy driven and industry demand, machine vision may become a key field of intelligent manufacturing in the game between major countries. Science and technology enterprises in the new focus should continuously strengthen the construction of core technological capabilities and comprehensively enhance their empowerment and synergy.