Industry Information:
Situation Analysis

Electronic products often have a high resale value when stolen. Traditional theft prevention has involved 1) securing the equipment or 2) monitoring the equipment.

Securing equipment often means tying it to one space. Securing equipment only works if you can still use it after it has been secured. Unfortunately people like to be able to move their works spaces around. A truly secure enclosure often prevents the amount of movement desired and is frequently very expensive. Further, medical and laboratory equipment require a great deal of access to maintain good running order, which would be impeded by the secure enclosures.

Monitoring the equipment can range from ineffective spot checks to very expensive constant monitoring. Monitoring is often video monitoring for which there are many subversion methods. Taking a picture of a crime doesnt often help you get your goods back.

Security Market Overview

The size of the Canadian commercial security market is estimated at US$1.5 billion in 2004 and market forecasts indicate that the industry should experience approximately 22-25 percent of growth through 2005. Although the Canadian commercial security market is considerably smaller than that of the United States, Canadian security concerns tend to echo U.S. patterns. One of the security Market growth factors is the increasing crime rate.

Equipment with Sensitive Information

End users in the Canadian market for commercial security equipment most commonly use the following technologies:

note: This report includes information from Canadian government publications, opinions of industry experts, and unofficial U.S. embassy estimates.

Security Market Trends

The following are a selection of reasons why industry insiders expect the commercial security industry to experience continued growth in North America in the future, highlights the opportunity for the Anti-theft Power cable:


Similarly, major North American insurance companies are now establishing increasingly stringent security standards, which businesses must follow to qualify for insurance. The unstable climate ushered in by terrorism and the skill of thieves and other intruders to out-smart security systems have forced businesses to continually update or purchase new systems that provide leading-edge security control.

North American businesses currently use security cards which include a wide variety of technologies: bar code, embossed, infrared, laser/holograph, magnetic stripe, optical, proximity (radio, infrared), and "smart" (containing microchip and combinations of these technologies).

Retail Sector

According to the Retail Council of Canada, total annual inventory shrinkage averaged 1.75 percent of sales, which translates into approximately USD$2 billion annually or USD$5.2 million a day. The reported losses were attributed to employee theft (40 percent), shoplifting (35 percent), administrative error (18 percent), and vendor dishonesty (7 percent). Canadian retailers strongly promote the use of CCTV and electronic surveillance systems to combat such loss. The Anti-theft Power cable will provide an alternative that addresses ALL the theft areas by making the equipment inoperable without the password.

The cost of replacement insurance is prohibitive due to a higher risk of theft.

Retail: Cargo Theft

Currently, one area that is being overlooked in the retail and transport sector is cargo theft. Of the many concerns plaguing this sector, cargo theft ranks at the top. In Canada, cargo theft costs over USD$1 billion a year. In the US retailers lose between $10 and $15 billion dollars a year from cargo theft. Losses including insurance claims, investigation and consumer costs climb to $50 billion dollars annually¹. There has been little product development, with whatever is developed being for recovery rather than prevention. Current solutions such as fenced yards and CCTV systems are still insufficiently effective.

High Value Medical & Laboratory Equipment

"FBI aims to rescue hospitals from thieves: Security chiefs set up phone advice network" © 1998 American City Business Journals Inc.

"The Federal Bureau of Investigation is looking into reports that medical equipment worth hundreds of thousands of dollars is being stolen from South Florida hospitals and rescue teams. ‘It does appear that there's going to be a problem that we're going to be looking at’, FBI supervisory special agent Reid Robertson said. He noted that the FBI typically handles only cases of theft greater than $100,000."

As extra-ordinary as it seems, equipment from hospitals and clinics have walked out the door. The larger the facility the more possibilities there are for an enterprising thief to dress in scrubs and push a heart monitor, test equipment or even the essential parts of a CAT Scanner out the hospital doors. Not only is the replacement cost high and problematic with annual budgets allocated a year in advance, there can be very significant delays in replacing the equipment. The net cost in human suffering from delayed services is far greater than the cost of replacing the equipment.

Future Markets: Consumer products

According to the 2004 Consumer Electronics Association, the total factory sales of consumer electronics were over $94 billion in 2002 for the United States. Sales of personal computers were over $11 billion, and televisions with an average unit price of over $1,000 were over $9 million.

In the United States computer theft alone grew from $640 million in 1995 to approximately $12 billion in 2002. This was only a fraction of the total consumer electronic theft. The cost of physical replacement and data re-entry drives the loss figures for theft into many billions of dollars per year. The cost to businesses of monitoring or physical securing of equipment is millions of dollars per year on an ongoing basis. None of the current security solutions has greatly reduced the overall losses.

A large amount of consumer electronic and electrical products are stolen during shipment. According to PRWeb in May 2004, there was "over $10 billion a year in cargo theft losses". This increases the cost to the shipper, receiver and manufacturer and ultimately the end user.

While many anti-theft devices have been developed, they can be expensive or difficult to install, very prone to false alarms (e.g. motion sensors), involve restrictive and unsightly mechanical restraints. The overall increase of theft despite such security calls these methods into question. Based on the shortcomings of current anti-theft methods, a different approach is required.

next page: The solution

1September 29 article in the Wall Street Journal, front page Marketplace section.