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Videoconferencing Gear Sales Drop

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August 27, 2012

Videoconferencing Gear Sales Drop

By Gary Kim, Contributing Editor

Sales of videoconferencing systems dropped 10 percent in the second quarter of 212, year over year, and dipped 6.9 percent quarter over quarter. Sales of $564 million were the lowest since the seasonally weak first quarter of 2011, and more than 27 percent below levels of the fourth quarter of 2011, IDC researchers say.

Given the sluggish pace of telecom equipment sales in the service provider and enterprise markets, this might not be so unexpected. With economic conditions challenging globally, one would expect a pullback in discretionary projects by smaller businesses, enterprises and service providers.

"While the challenges facing global economic growth persist, the outlook has at least stabilized," said Richard Gordon, research vice president at Gartner (News - Alert). "There has been little change in either business confidence or consumer sentiment in the past quarter (second quarter 2012), so the short-term outlook is for continued caution in IT spending."

As you might expect, high-end, multi-codec immersive telepresence declined rapidly with a 38.4-percent year-over-year drop, but all other segments were also down in the mid-single-digit range on an annual basis.

Regionally, the Asia-Pacific region significantly outperformed the other regions and grew 11.3 percent year over year in the second quarter of 2012. Europe, Middle East, and Africa  decreased 20.7 percent year over year and North America decreased by 16.4 percent year over year in Q2 12.

"Several of the video vendors pointed to the currently difficult macro-economic situation, as well as a cutback in spending in key areas such as the public sector, including government and education, as reasons for the weak quarterly results," said Rich Costello, senior analyst, Enterprise Communications Infrastructure, IDC (News - Alert).

Separately, Infonetics Research said “the PBX (News - Alert) market is down slightly on a global basis in Q2 12, both sequentially and year-over-year, and enterprises generally remain cautious with their spending on telephony equipment.”

“Sales of PBX systems in North America are up five percent  from the previous quarter and up 6.4 percent from the year-ago second quarter, and Latin America continues to be a small beacon of light as economies in the region experience growth and new business creation,” said Diane Myers, Infonetics (News - Alert) Research principal analyst.

“While we still expect 2012 to eke out some growth compared to 2011, we have lowered our forecast slightly due to continued weakness in Europe, where many businesses continue to push off spending in an area where existing telephony solutions still get the job done,” Myers said.

In the second quarter, the enterprise PBX phone system market (TDM, hybrid, and pure IP PBXs) totaled $2.0 billion, down 2.6 percent from the previous quarter and down 1.4 percent from the 2011 second quarter. 

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Edited by Braden Becker

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