Cisco, Polycom Lead Struggling Videoconferencing Market: IDC

Video as a key component of collaboration still places high among priorities for many organizations, despite a weak first quarter for the market.

Videoconferencing equipment revenue declined 13.2 percent year over year and 21.9 percent quarter over quarter, while total worldwide enterprise videoconferencing and telepresence equipment revenue stood at $563.4 million in the first quarter of 2013, its worst result since the second quarter of 2010, according to results from the International Data Corporation (IDC) Worldwide Enterprise Videoconferencing and Telepresence Qview.

Cisco remained the worldwide video equipment market leader with 43.4 percent of the market in the first quarter of the year, down slightly from both the first and last quarters of 2012. Cisco's first quarter videoconferencing equipment results showed a 17.2 percent year-over-year decline in revenue versus the "particularly strong" first quarter of 2012, the report noted.

From a market segment perspective, endpoints, which include multi-codec immersive telepresence, single-codec telepresence and personal videoconferencing, declined 10.7 percent year over year and video network infrastructure decreased 20.5 percent year over year in the first quarter of the year.

Regionally, Latin America declined just 3.5 percent year over year, followed by the 9.1 percent year-over-year decline in Asia/Pacific and the 10.1 percent decrease in Europe, Middle East and Africa (EMEA). The report noted the North American market was a particular area of weakness this quarter with its 20.3 percent year-over-year drop.

"Videoconferencing vendors point to longer procurement cycles, the still challenging macroeconomic situation in EMEA, and a slowdown in IT spending in some key global markets such as China and India as reasons for the challenging first quarter results," Rich Costello, senior analyst for enterprise communications infrastructure at IDC, said in a statement. "No doubt these are certainly valid reasons for the recent quarterly decreases in video equipment revenue we are seeing. In addition, IDC believes that increasing customer considerations over more software-centric solutions, virtualization, cloud-based offerings, and real-time browser-based communications are beginning to challenge the video equipment market as well."

Cisco competitor Polycom's worldwide video equipment market share stands at 26.5 percent, up from 23.6 percent in the fourth quarter of 2012 as the vendor introduced a range of new video products and services to the market last year. However, Polycom's first quarter 2013 videoconferencing equipment revenue decreased 12.4 percent quarter over quarter, and 11.2 percent year over year, though the report noted both values were better than the overall market performance.

"Despite another weak quarterly performance in the worldwide enterprise videoconferencing market, we still see video adoption being driven by interest in doing video integrations with vendor UC&C portfolios and business processes, as well as the increasing use of video collaboration for small workgroup, desktop, and mobile users," Petr Jirovsky, senior research analyst for IDC’s Worldwide Networking Trackers Research division, said in a statement. "Video as a key component of collaboration continues to place high on the list of priorities for many organizations. But key questions going forward now include: How will these video collaboration solutions be deployed? With more software or hardware? And, as premise or cloud-based solutions?"