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September 02, 2014

Survey: Global Videoconferencing Revenue Fell by Nine Percent in Q2

By Michael Guta
TMCnet Contributing Writer

The videoconferencing market is undergoing a revolution of sorts as new technology now makes it possible for businesses and individuals to communicate using video without expensive equipment. This is having a negative impact on the equipment side of the industry, especially on the high-end telepresence platforms. The growing development of WebRTC, cloud based services and mobile technology will continue to put pressure on equipment manufacturers as the market for videoconferencing grows, but with less hardware. The new IDC (News - Alert) Worldwide Enterprise Videoconferencing and Telepresence Equipment QView reports equipment revenue has fallen by nine percent for Q2 over the same period last year, even though it was 1.8 percent higher than Q1.

The global enterprise video equipment market reached $482 million with a 7.2 percent increase in the number of units sold from Q1 and 5.5 percent year-on-year (YoY).

According to IDC, the declines are attributed to delayed customer buying decisions, lower-cost systems and more software-centric products entering the market place. This includes competitive cloud-based video service offerings on the worldwide enterprise video equipment market, which has many organizations reassessing the need for implementing more expensive systems.

Companies are switching to video subscription services where the purchase of hardware is not required, which is primarily responsible for the decline. Additional results from the IDC report include:

  • Multi-codec immersive telepresence equipment revenue increased slightly (0.6 percent) from Q1 but fell 17.3 percent YoY;
  • Immersive telepresence units were up 2.3 percent from Q1 but down 12.9 percent YoY;
  • Room-based video system revenue advanced 4.5 percent from Q1 but slid 4.5 percent YoY;
  • Sales of room-based units were up 10.8 percent from Q1 and 7.7 percent YoY;
  • Video infrastructure equipment, including MCUs and other video-related infrastructure products, declined 5.7 percent fromQ1 and 14.1 percent YoY.

The decline was experienced across all regions with revenue in North America 6.8 percent higher from Q1 but 12.2 percent lower year-on-year, while Latin America had negative quarter-over-quarter revenue growth (-12.6 percent), but its YoY revenue increased 9.1 percent. The revenue in the EMEA market fell 5.4 percent from Q1 and 4.1 percent YoY, and the Asia/Pacific region had increased revenue of 6.5 percent quarter over quarter, but decreased 12.1 percent year over year.

The top three enterprise videoconferencing equipment providers, Cisco (News - Alert), Polycom and Huawei still controlled the majority of the market with 38.4 percent, 30.3 percent and 9.1 percent respectively.



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