Video Conferencing Equipment Market Surges, Polycom Gains: Infonetics

By Jeffrey Burt Print this article Print

Cisco Systems and Polycom are still the top two vendors in a video conferencing equipment market that grew 8 percent in the second quarter, according to market research firm Infonetics Research.

In a report issued Sept. 23, Infonetics analysts said revenue for the enterprise video conferencing and telepresence market in the second quarter hit $735 million, an 8 percent increase over the same period in 2012 and a 6 percent jump over the first quarter of this year.

Matthias Machowinski, directing analyst for enterprise networks and video at Infonetics, said he expects revenue growth to continue, although the market is still under pressure, as there is a slowdown in spending in some areas and a trend toward more cost-efficient offerings.

"After a tumultuous 2012 that saw growth in the video conferencing market screech to a halt, sales returned to year-over-year growth in the second quarter of 2013," Machowinski said in a statement. "While the long-term fundamentals look positive and will eventually drive renewed revenue growth, weakness in public sector spending and the move to lower-cost video solutions hamper a more robust recovery this year."

The market for dedicated video conferencing systems is still struggling, but revenue doubled for PBX-based video systems as businesses looked for more cost-efficient communications solutions, the analysts said.

Cisco's revenue fell slightly, while Polycom saw some upswing in its numbers.

Infonetics' numbers differ from what IDC analysts have been finding. In August, the research firm said revenue for video communications equipment continued to fall in the second quarter as businesses continue to shift their focus to software-based offerings and smaller and less-expensive hardware systems.

IDC found that worldwide revenue for video conferencing equipment fell 10.7 percent from the second quarter in 2012, coming in at more than $532 million. That was 34.3 percent below the record set in the fourth quarter of 2011, the analysts said. However, that didn't mean that interest in video conferencing was waning, Petr Jirovsky, senior research analyst, Worldwide Networking Trackers Research, at IDC. What's changing is how businesspeople are using the technology.

"Despite the overall weak 2Q13 results in the worldwide enterprise videoconferencing equipment market, we are still seeing interest in videoconferencing being driven by integrations with vendors' unified communications and collaboration portfolios, and the proliferation of video among desktop and mobile users," Jirovsky said in a statement. "Video as a key component of collaboration continues to place high on the list of priorities for many organizations."

Investors also are still interested in video conferencing and communications. In September alone, Blue Jeans Network, FuzeBox and Zoom Video Communications all announced new rounds of financing that raised millions of dollars—in Blue Jeans' case, $50 million.

This article was originally published on 2013-09-27
Originally published on www.eweek.com.