The Asia Pacific videoconferencing endpoints market was worth $208.8 million in 2005, declining around 4.2 percent year-on-year. According to Frost & Sullivan, reductions in end user pricing have affected the overall state of the market. As a result, almost every major vendor in the industry has faced a revenue decline. Yet, while this has impacted vendor and channel margins, pricing falls have also helped stimulate renewed interest in videoconferencing as a cost-effective business tool. Frost & Sullivan urges that with the evolving level of competition, vendors need to work closely alongside channel partners for the right go-to-market strategy to target the different tiers of customers.

They also need a good understanding of each local competitive landscape and have the right mix of channels to target the different opportunities around software-based codes, high-definition and customer-facing services. Internet protocol networking expertise, for example, will become more critical, as will strategic partnerships with other major enterprise solution vendors.

In addition Frost & Sullivan also notes that in this space, it is definitely right now the story of ‘China versus the rest of Asia.’ A new Frost & Sullivan study reveals that China accounted for over 40 percent of total revenue for video-conferencing endpoints in the region in 2005. Moreover, although China’s vendors have yet to fully tap into the region, there is very little doubt that they are driving the drop in end user pricing, which has in turn, resulted in renewed interest in video-conferencing solutions.

The study also shows that other countries with a firm foothold in this space include Australia, India and Japan. India, the third largest market in the region, is particularly noteworthy because unlike most other Asia Pacific countries, video-conferencing is becoming an extremely popular communications in many Indian homes. The country’s video-conferencing endpoints market has seen phenomenal growth year-on-year mainly because of a government-led program to develop an Internet protocol infrastructure which has resulted in the increased availability of broadband and a significant reduction in communication costs as well. Frost & Sullivan believes this market will be one of the most exciting to watch because together with China, it will be a major growth engine in the next five years.

Conferencing and collaboration systems are fast proving their worth as productivity tools for knowledge workers. Greater reach throughout the organization is also enhancing the usefulness of group conferencing systems, connecting the boardroom with their staff. Business effectiveness is raised further when coupled with media streaming applications, integrating broadcast and archive facilities into the mix.

Recently, high-definition video-conferencing has also caught the eye and imagination. High- definition video-conferencing promises to address many of the issues that plagued users of the older video-conferencing technology, such as poor sound quality and image resolution. Both Tandberg and Sony introduced dedicated high-definition cameras this year and Polycom said it would support high-definition more fully moving forward. New player, Lifesize, which came into the market two years ago, has also started shipping units and its entry has helped ignite interest in high-definition in major markets such as Japan and Australia.


The latest buzzword in video-conferencing is however – telepresence. However, at the moment, effective telepresence environments are expensive and will appeal to only top-notch multinationals whose senior management look to improve the level of global communications while keeping travel costs low or deploying state- of-the-art disaster management systems as well as key applications in the higher education and healthcare verticals. A typical telepresence-type implementation can start from US$100,000.

The entry of giants like HP in this space guarantees the heating up of competition here. Late last year, HP introduced its Halo solution, a collaboration studio for simulating face-to-face business meetings across long distances, brought to life in partnership with DreamWorks Animation SKG. It enables people in different locations to communicate in a vivid, face-to-face environment in real time.

More recently, Cisco Systems has announced that it will also enter the telepresence market.

The video-conferencing market has seen and will continue to enjoy considerable innovation. Frost & Sullivan adds that with reduced barriers to entry, its appeal to organizations will increase. This is already happening with many government departments in the Asia-Pacific for example, multinationals and those in the healthcare, manufacturing and education verticals.

Desktop-conferencing for the executive market (personal hardware-based systems with advanced features) is also fast-gaining attention from many companies. Frost & Sullivan expects more software-based solutions costing less than US$1,000 to gain popularity.


At the same time, it also believes pure group-based video- conferencing is one technology that will not enter the mass market but continue to appeal to a select group of end users.

According to the research firm, the main issue with video-conferencing has always been its price. While it admits that the market has seen year-on-year price reduction over the last three years, making the technology more affordable than what it used to be, however, by Asian standards, it is still not low enough.

However, despite this Frost & Sullivan is confident that software-based video-conferencing for both consumer and enterprise environments will certainly become more widespread, and that it is just a matter of time before video-conferencing becomes a feature on most enterprise PCs. Unified voice, video and data communications will enable high levels of collaboration that will eventually become central to most business processes.