Nov. 2022 - The FCC Acts! Dahua dumps Lorex, and Hikvision is on the run. The slow motion train wreck the 2019 NDAA Law started is approaching its crash site. The actions of the FCC are quite decisive, no more FCC licenses for new electronics produced from Hikvision or Dahua-Lorex. In response Dahua sells Lorex the same day! The impact of this decision is a crippling blow for these companies. All they can do now is sell and support existing licensed equipment; cameras and NVR's. No new up-grades, no new equipment, only legacy system support if it's profitable, but in our opinion it's only a matter of time before they are forced to abandon the USA market completely.
In reaction to the FCC actions Dahua sells off their Lorex store-front to a Taiwan company, a company that is not associated with the NDAA ban, this preserves the Lorex store-front so another Asian supplier can have their turn dumping electronics into the US market...here we go again!
Lets recap how we got here!
1. It was brought to our governments attention around 2018 that an extensively used cctv video chip was equipped with a very sophisticated remote backdoor access that was completely undetectable.
2. The problem was the video chips that were compromised were produced by Huawei and offered some of the best 4K resolution on the market. They were extensively used by brands such as Hikvision and Dahua. Because these brands are large manufacturing companies and have thousands of engineers in their development departments, it's was assumed they had knowledge of the backdoor access.
3. So our government acted with the 2019 NDAA Law. They banned the use of all products produced by Huawei, Dahua or Hikvision in any federal facilities, many state governments immediately took the same stance. But this law did not stop the companies from selling the compromised chips to the US general public. So these brands continued to take large shares of the US market, transferring our wealth to China and destroying the possibility of manufacturing any cameras in the USA.
US Government Bans Hikvison/Dahua Security Cameras
4. The FCC jumps on board. In June 2021 they unanimously voted to start procedures to ban the sale of these brands to the general public by denying new products FCC approval.
Security Info Watch
5. November 2022 the FCC finally acts and started enforcing the ban on new licenses for any products these manufacturers produce.
What does the future look like for US customers?
Security and surveillance electronics evolve quickly, products do not stay on the market past three years on an average. Constant updates, revisions, and new models are forced onto the market because its the same migration the component level manufacturers follow. This means all those Hikvison and Dahua systems installed across this country are now frozen in time. Maintenance of the systems is the only option, well that and replacing the system. The risk with maintaining the system is guessing how long these suppliers will support them. It's a dead market for them, as current models go out of production, the replacement options will dwindle until its unsustainable to provide service. This could easily happen within one to two years.
Lorex gets dropped like a Hot Potato!
What can we say about a company that has 4 different owners in 8 years? Seems strange, right? Not so strange if you understand what Lorex is. Lorex is the next Asian manufactures store-front into the US market. Lorex operations are located in Canada, where they market into the US. They make big deals with big box stores while they artificially suppress security industry prices. Reality is they are NOT an American based company and other than artificially low prices, the US consumer does not benefit at all. When you purchase from them, it is a 100% transfer of wealth to the foreign manufacture who owns them, whoever it is this month. All their customer support services are located in other countries and they do not maintain facilities in the US with the exception of one product returns location. They are the premier "western store front" for any Chinese or Taiwan manufacture that wants direct access to the US market. From our point of view, Lorex is just a store front for Chinese dumping into the US security market.
Since Lorex was 100% owned by Dahua and now Dahua is banned from the US market, what good is their western branded store-front? Might as well sell it off to the highest bidder, and that is exactly what Dahua did. On the exact same day the FCC announces the ban on new Dahua products they sold Lorex to SkyWatch located in Taipei, Taiwan. This effectively saves Lorex from the electronics company trash bin and lets the "smoke and mirrors" marketing start all over again.
What impact will this have on the US security industry?
These three companies Dahua, Hikvision, and Lorex are the main reason security cameras are not manufactured in the US. These companies have artificially suppressed fair market prices to the extent US companies could not compete, our government calls this "dumping". Since these companies could easily constitute 50% or more of all the professional security cameras sold in the US, there are huge opportunities for USA based security companies who focus on supporting and migrating Dahua and Hikvision systems to new NDAA approved equipment. Most system migrations can be cost effective. The existing cabling can be utilized, simply replace the cameras and recorder, then download a new secure app onto your devices and you're done.