Videoconferencing Continues Precipitous Decline

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The videoconferencing market felt the pain in 2012's third quarter, as the unyielding economic climate saw businesses shun high-end telepresence systems from Cisco, Polycom and others.

Editor’s note: As part of our special editorial partnership, Channelnomics is publishing this recent article from CRN in the UK.

The videoconferencing market continued to feel the pain in 2012's third quarter, as the unyielding economic climate saw businesses shun high-end telepresence systems.

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According to IDC research, the worth of the enterprise video market contracted 4.8 percent during Q3, with market leaders Cisco Systems Inc. and Polycom Inc. posting annual sales declines of 14.7 and 15.2 percent respectively. Cisco remains way out in front, but its market share has shrunk five points to 43.3 percent in the past 12 months. Polycom accounts for about a quarter of the market.

The Latin America and Asia-Pacific market appears to be in rude health, with Q3 revenue in these regions growing 13.7 and 9.7 percent respectively on an annual basis. But it was a different story in the more mature markets of North America and EMEA, with market worth falling 11.5 and 10.8 percent.

The market for immersive telepresence systems plummeted 35.7 percent annually in Q3, while sales of other videoconferencing components, such as gateways and firewalls, took a 26.8 percent hit. Revenue from single-codec video products were up just 0.4 percent, while the personal videoconferencing market grew 8.7 percent and the video MCU space expanded 5 percent.

“As expected, a down year for the overall enterprise videoconferencing and telepresence market continued in 3Q12. This is mostly due to uncertainty stemming from macroeconomic concerns, and a continuing decline in high-end immersive systems,” said IDC analyst Rich Costello.

"We also feel that customers are considering more strategic approaches to deploying video technology and applications, leading to longer decision cycles," Costello said.

But Petr Jirovski, an IDC analyst focused on worldwide networking trackers research, claimed video adoption is still "being driven by video integrations with vendors' UC and collaboration portfolios". He added that the growing popularity of desktop, mobile and small workgroup video technologies will also boost the market next year.

"Video as a key component of collaboration continues to place high on the list of priorities for many organizations and we anticipate a return to positive market growth in 2013," said Jirovski.

For more UK channel coverage from CRN, visit www.channelweb.co.uk

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