Introduction This information is confidential and is not to be provided to any third party without Vicon Industries Inc. prior written consent.

2012 Video Industry Trends IP Market Moving forward with technology….

Trends… Continued increase in demand for IP & megapixel cameras Storage demands (internal and external) are still rising Standardization… IP products talking the same language… ONVIF Transition from DVR systems to NVR still accelerating… 2012 market showing signs of life..???

Megapixel Demand Rising…. “Overall, the growth rate for IP cameras is likely to be over 30% for 2011.” IP Video Market 2012 growth will slow down due to a maturity in the market. Primary demand for MP is still in the 2 MP category with 5MP considered for most exception areas 360 degree cameras also increasing in demand PTZ Domes now offer 2MP resolution Price, Low-light issues, storage and bandwidth seem to be the significant hold backs for faster growth in the 5 MP category.

Storage Lower costs of cameras and use of higher MP units still driving growth in storage demands Traditional NVR solutions still using a mix on internal straight storage and external RAID configurations An increasing requirement for 30 fps recording pushes capacity on storage Prices still coming down rapidly and new 4TB drives are not far off 5

Standards…. ONVIF™… ONVIF is an open industry forum for the development of a global standard for the interface of IP-based physical security products. ONVIF is committed to the adoption of IP in the security market. The ONVIF specification will ensure interoperability between products regardless of manufacturer. The cornerstones of ONVIF are: Standardization of communication between IP-based physical security Interoperability between IP-based physical security products regardless of manufacturer Open to all companies and organizations

Analog – DVR – Pure IP Analog…. DVRs IP Systems Cameras – Still being developed by Asian companies only A lot of on-board software development and increased pixel count for super high-res Very price effective for small and mid-size systems when used with DVRs Systems…Matrix systems going away for good DVRs products also still being developed Last major change was the use of H.264 It’s all about price now… IP Systems Tipping point for IP system sales over analog is projected for late this year Some believe it has already taken place

2012… Growth??? That’s big growth (19%) Storage only VMS only the total video surveillance applications market is expected to reach $25.43 billion by 2016 at a CAGR of 19.35% from 2011 to 2016” – (2011 report by MarketsandMarkets) That’s big growth (19%) IP is the primary driver in this industry and supports a host of specialized players Storage only VMS only IP cameras only…

This information is confidential and is not to be provided to any third party without Vicon Industries Inc. prior written consent.