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Greater China video conferencing infrastructure market to grow 18pc in 2012, says Frost & Sullivan

The Greater China video conferencing infrastructure market is expected to grow by 18 percent to reach revenues of USD152.97 million in 2012, primarily driven by the increasing customer awareness of total solutions in the video conferencing segment, says research and consulting firm Frost & Sullivan.

According to Frost & Sullivan Senior Industry Analyst Jessie Yu, the gradual simplified procurement process among Chinese local companies is expected to create phenomenal opportunities for the infrastructure market.

"Along with the Cisco-Tandberg and Radvision-Aethra acquisition, the market, from the supply side, has shown a strong signal to provide dedicated total video conferencing solutions with fully support of room system, desktop, and mobile devices," she said.

Yu expected the Asia-Pacific video conferencing infrastructure market to grow at a compound annual growth rate of 17.9 percent (2010-2017) to reach USD491.2m in 2017.

Greater China was clearly the leader of the video conferencing infrastructure market in Asia-Pacific in 2010, accounting for 62.3 percent of the total revenues of USD154.8m. Yu said the high growth was made possible with key vendors such as ZTE Corp and Kedacom becoming more aggressive in their sales strategies for infrastructure resolutions.    

"Total solutions, including telepresence, desktop video, executive systems, and room-based video conferencing systems for multi-party video calls via different devices, will help vendors gain a competitive edge," said Yu. In some countries such as China, integration with audio-visual peripherals is also important to attract customers.

The emergence of managed and hosted service of video conferencing is fuelling the growth of the video conferencing infrastructure market, according to Yu. Chinese telecoms provider such as PCCW, Chung Haw Telecom and some service providers in China have been strategically planning the expansion upgrade the video conferencing services. The network infrastructure has been considered as one of the key investment to expand the service scalability. Demand from the corporate sector especially in the Business Financial Services Industry, manufacturing, high technology and other verticals have experienced a steady increase over the years.

Large enterprises comprise the bulk of revenue streams in the market, but the contributions from small and medium businesses are steadily rising, according to Yu. These market drivers notwithstanding, intense competition and "solution-oriented" offerings of video conferencing products (endpoint and infrastructure) caused a dramatic decline in the price points of high-definition (HD) multipoint conferencing unit (MCU) in 2010, especially in Greater China, Japan, and India.

The lower price points can be offset to a large extent by the rise in the popularity of IP networks and the escalating number of video conferencing endpoints.

"A steady demand for MCUs is expected to be the main market driver; however, auxiliary systems such as management software and gateways will also need upgrading if enterprises wish to fully utilise their investment in HD video endpoints," said Yu. "Further, globalisation and a growing demand for inter-company video will fuel the adoption of videoconferencing infrastructure, giving vendors an opportunity to improve their revenue shares," she added.