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Video conferencing market showing growth

With the economy expected to pick up in the Asia Pacific, the video conferencing market is likely to benefit as more companies invest in video conferencing solutions.

According to a new study by Frost & Sullivan, spending for video conferencing solutions is expected to continue its pickup from late last year, with revenues reaching US$367.5 million by the end of the year.

Pranabesh Nath, Frost & Sullivan industry manager, said this optimism comes from the expectation that the economy is off to a recovery.

In a new industry analysis titled 'Asia-Pacific Video Conferencing Endpoints Market', the consultancy firms said the region, including Japan, will grow 9.5 per cent year-on-year by the end of the year with shipments growing by 14.1 per cent to 108,434 units.

The market is expected to grow at a compound annual growth rate (CAGR) of 13.6 per cent till 2016 reaching nearly US$820 million. Unit shipments, meanwhile, are predicted to grow at a CAGR of 16.3 per cent from 2009 to 2016.

Corporate spending

Corporate spending for the video conferencing market was obviously affected by the global credit crunch. Frost & Sullivan particularly noted that for the banking and financial sector, the sector most badly hit by the crunch, investments in video conferencing solutions declined.

"The corporate sector saw the sharpest decline in video conferencing investments last year, most notably the banking and finance sector," Nath said. Corporate cutbacks, however, were offset by a rise in government sector adoption.

Growth of the video conferencing endpoints market dropped sharply to post a modest 5.4 per cent on the back of just over US$335 million revenues in 2009.