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Monday, November 18, 2013

Cloud-based Video Conferencing Market - China

China Semiannual Collaborations and Video Tracker shows that the scale of China’s video conferencing market is US$ 172.1 million in the first half of 2013 (1H2013),  declining 6.1% year-on-year.

Reasons for declining of China video conferencing market in 1H2013 are:

  1. Recession in China resulted in a declined profits among enterprises, causing them to be more cautious about IT investment. The decreasing  number of customers also resulted in delays in video conferencing investment.
  2. Changes in the government industry – one of the major users of the video conferencing. The change in government leadership and high level of business penetration in state ministries and commissions resulted in decline in investment.
  3. More audio/web conferencing vendors are adding video functions to their products, meeting the demands of video communication users at a low cost. As such, medium and small enterprises in the video conferencing market are facing increasing challenges.
Telepresence, a high-end video conferencing product, was mostly affected by the overall economy and suffered the most serious decline in 1H2013.

 Trends in the China video conferencing market

 1. China video conferencing market is promising. Improvements in the China networking systems and declining broadband costs are fueling this market. The overall cost of video conferencing has declined proportionately and that has resulted in improved rates of return on investment.  More users have also realized the value of video conferencing and are investing in it.

2. The market will be more competitive. In 1H2013,  several local vendors launched video conferencing solutions, and had road shows in many cities to increase awareness of their products. Some vendors have increased the investment on their video conferencing products, and have plans to eventually integrate them as part of the core unified communication solution.

3. The cloud-based model of video conferencing will become more common. As the China government relaxes regulations on the telecommunication service market, more local vendors will obtain iDC/ISP licenses. This lays the road for the vendors to provide the cloud service model. Judging from the latest strategies of all video conferencing vendors, the cloud-based model is seen as the key point of the next step development. 

4. The mobilization of video conferencing will be promoted. In China the 4G network will become one of the key points of the work in the next two years. With effective support of the 4G network and the issuing of 4G license this year, the mobilization of video conferencing will be the main research and development focus of large video conferencing vendors.