Give customers what they need
Some vision applications need extremely expensive custom-designed cameras with loads of features. Then there are other applications where a webcam might do. Imagine how the cost saving could be reflected in a lower price point for the OEM device that it goes into, and how many new applications could become economic at that price point.
Then, of course, where do you get a webcam that has an industrial mount that can be relied upon to give years of trouble-free service and is from a manufacturer which can deliver to the production lines and offer support throughout the world? If you could find such a camera, how would you integrate it into your application software?
When IDS started making USB cameras for industrial applications it met a degree of scepticism because of the inevitable comparison with webcams. But its design philosophy was to get rid of anything that its customers did not need and give them something that allowed them to meet a lower price point.
IDS marketing director Niall Worn says there is often a big difference between what people want and what they need in terms of camera features and in terms of price. What they need is sometimes more about global support and a system development kit (SDK) that is quick and easy to use, rather than a few extra pixels in the image.
The next stage is to try and do the same with a Gigabit Ethernet camera. Customers are showing a lot of interest, but nobody is quite clear yet where the market will be. IDS’s history is about its customers using their creativity to exploit the product’s features, in particular the lower total system cost and simplicity.
IDS was founded in 1997 by Jürgen Hartmann and Armin Vogt working out of the living room of an apartment. Hartmann was the salesman and Vogt the engineer. They always wanted to develop their own products, but soon found that paying the rent and food bill was more important. They started distributing TELI industrial cameras and a range of frame grabbers to get some income coming in. After a while they realised they could make something far better than the frame grabber they were distributing and designed their own called Falcon. They later added a compressions board, which found a ready market in video surveillance.
By 2003 the company had two divisions; one specialised in video surveillance selling its own iGuard software package and the second on industrial imaging with a full range of frame grabbers based on Camera Link. In 2004 they released the first uEye USB 2.0 based camera with a 1.3-Megapixel CMOS sensor. Today the company employs about 66 people. Worn says: ‘The company has always had an emerging strategy rather than a planned strategy. When it started the average frame grabber was about €1000 and then you had much cheaper TV cards. It was able to use some consumer technology and make it industrial-capable to create a frame grabber that came in at anything from €400-800. The next stage was the iGuard surveillance package.
‘The question came up of “where next?”, because the writing was supposedly on the wall for the frame grabber. The company had a choice of either developing the surveillance business or coming up with something new. This is where the USB camera came in. At the time the other players in the industry said that they had to be crazy, but IDS decided that sometimes the simplest solution is the best. It did not want to do the same as everyone else.’
The headquarters of IDS in Germany
Since its launch in 2004 camera sales have accounted for about half the company’s sales. It has found markets in industrial imaging, particularly quality control, and what the company broadly describes as ‘diagnostics’, which includes medical applications.
Worn says: ‘We go through a re-education every week, because every week we discover someone is doing something new with the cameras. When you talk about the cost of a product, it is not just the cost of the camera, it’s the total cost of the solution that is important. The USB camera provides a lower entry level. Some people just need a quick image in order to make a decision. Some 70 per cent of our customers are in machine vision, but our top four customers are not machine vision customers.
‘Our customers might have been using a lower cost analogue camera with a frame grabber; we can offer a USB camera with an SDK. What we are selling is a camera with an SDK, we do not sell the SDK separately. If you want to get from A to B you do not always need a Mercedes to do it.
‘It’s not just about replacing analogue cameras; it’s also about creating new applications at an overall lower cost. What we find is that our OEMs and integrators are coming up with new applications that are now affordable. When we asked our customers why they bought our cameras most of them said it was the SDK, because it made life a lot easier for them.’
As the CMOS sensors have become better, IDS has broadened its product range up to a 3.1-Megapixel camera. But in reality all the action is at lower resolution. In fact one of its most active lines is the uEye LE, which is actually a slimmed down camera where everything that a customer might not need is taken out to bring the price point down even further.
Worn says that often customers come to IDS looking for the higher resolution cameras, because the project appears to need it. But when they start talking, the IDS application engineers can point out that the higher resolution is not needed, particularly when the customer is trying to design to a price point. ‘We are a smart camera manufacturer, but we don’t sell smart cameras. We keep it basic and avoid anything that is unnecessary and include features that the customers need. All of the features in our cameras come from customer needs.’ The LE was introduced this year and was deigned to be even simpler than the classic USB camera; and, because all the frills have been left out, it is even lower cost.
Worn says: ‘There are some applications where design cost is important. A lot of integrators were saying to us that they needed a camera, and a webcam would do the job. The problem with webcams is that they are not designed for industrial applications; they go into retail and a few months later they are gone. Some of our customers need product supply for five to seven years because they are designing the camera into an analytical product. The LE has a simple casing and is designed for an entry-level application.
‘For some applications the price of the camera is not significant compared to the cost of the system. But some applications are for a €2,500 system, so the cost of the camera can be significant and the volumes at that price are much higher.
‘We get into a lot of discussions about price, but really price is not the main issue. It’s about “Can you deliver?” Global OEMs want guarantees that you can provide what they need when they need it and in a sustainable way. Whether you get the project or not, is not just about price. Price is an issue, but it’s not the only one.’ IDS does its final assembly and testing in-house and, by the middle of next year, the manufacturing capacity is due to be expanded, largely based on the expectation that it is going to make a lot of LE cameras.
Non-manufacturing applications are also key
Frame grabbers still account for about a quarter of the business, with the rest being in the distribution of Halcon image processing software library in Germany.
Worn says that the demise of the frame grabber has long been predicted, but this has shown no sign of happening. In fact sales of frame grabbers are growing, but not as fast as the USB cameras. He believes that one of the reasons for this is that there is already a huge base of systems designed to use frame grabbers among OEMs. Having invested large amounts of time and money in developing their application, there is no incentive to start the process again with any of the direct PC interfaces.
Worn says: ‘I would defy anyone to state categorically what is happening in the market. The growth rates are so great compared to other industries and new applications are being found all the time. We expected sales of frame grabbers to decline this year, but instead we have seen growth. The established market is growing and the digital market is growing rapidly, so it suggests we are way off the end of growth. When OEMs develop a machine that becomes a major cash cow, there is no incentive for them to start redesigning it. The hardware is not changing that much, but the SDK is constantly being developed. The product lifecycle for our OEM customers is much longer than, for example, in the IT industry. Most people are investing to use this technology over a long period of time.’
Sales in Germany are handled directly and it has recently established a US subsidiary, of which Worn is CEO, but in other major markets IDS has chosen to be represented by distributors. Worn says that the role of the distributor is to find opportunities for OEM sales, but IDS’s own engineers work closely with the distributor on the account. He says that distributors are usually representing other manufacturers supplying other parts of the OEM solution. They are also holding stock for customers who want short delivery lead time. The distributors are also expected to provide high levels of local support to the customers.
The need to train those distributors has been the factor holding back the global roll out of IDS’s Gigabit Ethernet product range. Anyone looking at its German language website can see details of the range, but Worn says it has been kept off the English language site because the distribution network is still being trained.
Worn says: ‘I know that as soon as we release details, we will have customers wanting to try it out and will have questions. We wanted to be sure we had people in place who could answer them.’ Worn says that there has been a lot of interest from existing USB customers for a GigE product. Cable length is an issue that has come up and it was clear to IDS that with PCs coming out of the factories with GigE interfaces, it seemed a natural complement. The SDK is the same for the USB, GigE or frame grabber interface.
He says: ‘There are customers where an USB would not have been suitable, but they liked in principle everything else about our cameras GigE resolves that for us. If you look at the performance of GigE, it is targeting the Camera Link base, but obviously not at a Camera Link price. There has been a lot of interest and we have been working closely with our customers to see what they wanted and the feedback from those customers is that we are very good.
‘We are only distributing them in Germany and will start international distribution at the beginning of November because we have to take our distributors though the product training. As soon as we put the details on the English website we will get requests for evaluation. Quality is very important to us here and so we wanted the support team to get experience through the German market. As soon as each distributor is trained they will go out and sell it.’
Worn believes that GigE will become an important complement to the USB business. There will be applications where the performance of GigE is important, but he thinks it will not take any business away from USB because the cost issues are different. But in many ways the strategy will also be ‘emerging’ as the dominant factor is the imagination of the OEMs. In five years’ time IDS expects to be in the same position as it is with USB of being surprised every week by the new applications that its customers have found for the product.