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Huawei Technologies, which already competes with Cisco Systems in the global networking market, reportedly is now looking to challenge Cisco in the telepresence space.
Cisco is the dominant player in the $2.8 billion immersive telepresence arena, leading other major rivals like Polycom. However, as Huawei looks to expand its capabilities beyond the networking business, telepresence is becoming a focus, Li Jun, general manager of such telepresence products at the Chinese vendor’s Enterprise unit, told Bloomberg News.
Huawei had about $200 million in sales of telepresence equipment in 2011, Li said.
Telepresence technology enables businesses to conduct conferences via video in an immersive fashion that gives participants the feeling of being in the same room, even though they may be across the world from each other. The equipment involved with telepresence systems can include not only the technologies, screens and cameras, but also furniture for the rooms.
Telepresence and other video conferencing technologies have gotten a boost in recent years as businesses look to increase employee productivity and improve the lines of communication with workers, partners and customers, while at the same time driving down travel costs. However, with the growth of such trends as cloud computing, bring your own device (BYOD) and greater workforce mobility, the video conferencing market is changing, with an increasing emphasis on software-based solutions and enabling video collaboration on a range of devices, including PCs and mobile devices like smartphones and tablets.
The uncertain global economy and reduced spending in the public sector are conspiring to slow sales of video conferencing solutions overall, and the market for immersive telepresence products is being particularly hard hit, according to analysts at IDC. In the second quarter, overall video conferencing spending fell 10 percent from the same period in 2011, while revenue in the multi-codec telepresence dropped fell 38.4 percent. Those numbers were a continuation of the trend seen in the first quarter, according to IDC.
“The high-end, immersive telepresence market has been taking a hit lately as lower-cost, HD-quality video solutions, along with a range of new video deployment options for customers, have emerged,” Rich Costello, senior analyst for IDC’s Enterprise Communications Infrastructure business, said in a statement in May when announcing first-quarter market numbers.
Still, Huawei executives see telepresence technology as a key part of their plans to triple revenue to $100 billion by 2021, up from $32 billion in 2011. Huawei also is looking to push its way into other markets as well, including cloud computing and mobile devices such as smartphones and tablets.
Li indicated to Bloomberg that Huawei will look to offer less expensive telepresence systems as it competes with Cisco. The company’s high-end telepresence offering, the TP3106, delivers high-definition images across three flat screens for about $160,000, while a similar system from Cisco could cost as much as $300,000 Li said.
Cisco executives have acknowledged Huawei as a strong rival in the networking space. In April, Cisco CEO John Chambers told The Wall Street Journal that he saw Huawei—rather than the likes of Hewlett-Packard and Juniper Networks—as its top competitor. That came after Huawei in 2011 launched an aggressive campaign to increase its presence in the North American market.