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APAC videoconferencing revenue to reach $367.5M

Revenues for region's videoconferencing terminals market to grow 9.5 percent year-on-year by end-2010 as enterprises recover from economic downturn, says new report.
Written by Liau Yun Qing, Contributor on

Following on the trail of the economic recovery, the Asia-Pacific videoconferencing terminals market will grow to reach US$367.5 million in revenue by the end of 2010, according to new report from Frost & Sullivan.

Released Wednesday, the report noted that revenue for the market will grow 9.5 percent year-on-year while unit shipments are expected to climb 14.1 percent to reach 108,434 units. The report covers 14 Asia-Pacific countries, including Japan.

Revenue for the market will continue to climb at a CAGR (compound annual growth rate) of 13.6 percent to reach nearly US$820 million in 2016, said Frost & Sullivan. Shipments are predicted to grow at a CAGR of 16.3 percent in the same timeframe.

Last year, the videoconferencing terminals market saw its growth dropped sharply as the global economic downturn stifled the spending ability of enterprises, according to the report. Market revenues posted a "modest" 5.4 percent growth of US$335 million.

"Spending in the first three quarters of 2009 showed a decline in almost all Asia-Pacific countries but by end-2009, enough deals were closed to bring the market back from the red," Pranabesh Nath, industry manager at Frost & Sullivan, said in the report.

"The corporate sector saw the sharpest decline in videoconferencing investments last year, most notably, the banking and finance sector," Nath said. However, he added, adoption in the government sector lessened the impact of corporate cutbacks.

High-def videoconferencing on the rise
Despite the recession, the region's videoconferencing terminals market remained active last year, said the analyst, who pointed out to new product launches from both emerging and established vendors.

"High-definition (HD) systems, in particular, witnessed a flurry of activity with the continued penetration of popular and affordable solutions from leading vendors," he said. "As a result, almost all of the units sold in 2009 in the mid- to high-range market were HD solutions."

HD videoconferencing will continue to rise through to 2016, even in countries such as China and India where standard definition videoconferencing systems currently dominate, said Nath. He attributed this to further declines in unit pricing and customers realizing improved usability experience with HD systems.

A previous Frost & Sullivan report noted that HD videoconferencing systems will even challenge the telepresence segment. Estimated to grow at 64.4 percent by end-2010, telepresence revenue will decline sharply to 32.1 percent in the following year due to competition from HD videoconferencing systems, the report noted.

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