Polycom bolsters telepresence portfolio, gains traction

Polycom is stepping up its telepresence game in an effort to make the conference room more personal and production studio ready. The move comes as Polycom continues to notch wins.

Polycom is stepping up its telepresence game in an effort to make the conference room more personal and production studio ready.

On Wednesday, Polycom rolled out an addition called EagleEye Director. The idea is that EagleEye Director will couple voice-triangulation, face finding technology and dual cameras to provide a face-to-face experience. The system will make sure that a speaker will always be zoomed and centered.

According to Polycom, EagleEye (right) is designed to transition between individual speakers and capturing an entire room. In a nutshell, Polycom is looking to rid meetings of camera adjustments and remote control hijinks.

EagleEye was the headliner of a desktop telepresence system dubbed HDX 4500, which uses less bandwidth and integrates natively with systems from Microsoft, HP, IBM, Juniper, BroadSoft, Siemens, McAfee and Avaya. EagleEye will have a list price of $8,499 and the HDX will run you $11,999. Polycom also rolled out a portable PC-based telepresence system for SMBs for $49.

The new products highlight how Polycom is gaining momentum. As noted earlier, Polycom has thrived as an independent company has the telepresence market has consolidated. Polycom's first quarter tells the tale. The company handily topped estimates with earnings of $25 million, or 29 cents a share, on revenue of $344 million.

Meanwhile, Polycom raised its outlook for the second quarter. The company projected second quarter revenue of $358 million to $365 million compared to estimates of $351 million. Operating margins are also expected to increase.

Polycom CEO Andrew Miller said on a conference call that partnerships with multiple players---notably Microsoft---are paying off.

Polycom has become the go-to partner of choice. Of course, our deep relationship and partnership with Microsoft around their Lync platform is progressing extremely well and become a significant contributor to our mutual business. With IBM, we received the IBM Lotus Award, due to our innovative Polycom unified collaboration for Lotus SameTime solution. Of course we continue to make gains with Hewlett Packard, Juniper, Siemens, Broadsoft, and our other strategic partners as well. In fact, approximately 23% of Polycom's revenues in Q1 are attributable to our top 7 Polycom open collaboration network partners.

Indeed, that partnership strategy seems to be paying off.

Piper Jaffray analyst Troy Jensen said Polycom is doing well playing David to Cisco's Goliath:

We also believe Cisco has frustrated a significant number of video resellers (certification requirements and ordering system snafu) and will likely lead to market share gains for Polycom in Q1, but more importantly, mind share gains with channel partners and the likelihood of better performance throughout 2011.

And this momentum appears to be global. Stifel Nicolaus analyst Sanjiv Wadhwani said:

China now accounts for 11% of total revenues. Polycom now has 42% market share in China, up 10 points from a year ago. India also did well, up 100% y/y and now accounts for 3% of total sales. Japan, despite the tragic events, was up sequentially. In Europe, the new head is continuing to make a good impact, with sales up 1% (despite challenges in that geography). Polycom saw good momentum in Germany, Spain and the Nordic countries (growing 50% y/y at the expense of Tandberg).

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