Videoconferencing Equipment Market On A Decline

by CXOtoday News Desk    Jun 03, 2014

videoconference

Videoconferencing and telepresence equipment market has shown a sharp decline in Q1 2014 and is expected to show declining results in the coming quarters, says research firm IDC. The results show that major telepresence players such as Cisco, Polycom, Huawei have witnessed a dismal first quarter.

According to IDC, the overall videoconferencing equipment revenue is decreasing by 20% quarter over quarter and nearly 16% year over year. in the first quarter, the worldwide enterprise video equipment market revenue touched $473.5 million. The total number of video units sold during the same period showed a 13% decline quarter over quarter and 6.2% year over year.

From a market segment perspective, multi-codec immersive telepresence equipment revenue was down by 25% quarter over quarter and 33% percent year over year. Video infrastructure equipment - including MCUs and other video-related infrastructure products also declined over 39% quarter over quarter and 13% year over year.

Region wise, Europe Middle East & Africa showed maximum decline of nearly 20%, whereas Asia-Pacific showed a dip of 16.4%. North America and Latin America also showed 13% and 5.5% decline during this period.

“We continue to see the impact of delayed customer buying decisions, lower-cost systems, more software-centric products, and competitive cloud-based video service offerings on the worldwide enterprise video equipment market,” said Rich Costello, Senior Analyst, Enterprise Communications Infrastructure, at IDC.

He added, “The weak vendor results are also indicative of the ongoing transition from a primarily hardware-based reporting model to one impacted by the interest in and growth of video subscription services.

Cisco’s video equipment revenues decreased nearly 28% quarter over quarter and over 22% year over year in revenue, although it occupied the top position in enterprise videoconferencing equipment with a 40% share of the global market. Polycom’s revenue decreased over 7% quarter over quarter and 8.4% during the same period with a nearly 29% market share. Huawei’s quarter-over-quarter revenue dipped over 42% quarter over quarter and holds a 7.8% share of the worldwide enterprise videoconferencing market.

Costello notes that despite a dismal quarter, most or all of these vendors are now offering cloud-based video alternatives to customers too – in addition to their own lower cost, premises-based systems.”

IDC states as dismal as these quarterly numbers are, video as a key component of collaboration continues to place high on the list of priorities for many organisations. The research firm notes that among the challenges customers are currently trying to work through are a market transition and determining exactly what, when, and how to provision their video deployments as more software-centric and cloud-based service offerings become part of the enterprise video market landscape.