Matthias Machowinski, senior research director, enterprise networks and video at IHS Technology, said the shift to the Cloud is displacing videoconferencing infrastructure sales.
Only Cisco and Huawei achieved year-on-year growth in the first quarter of 2016. For Polycom, ZTE and Avaya, Q1 2016 posed challenges.
Video conferencing revenue declined 22 percent quarter-over-quarter to $701 million due to lower seasonal demand.
Videoconferencing revenue is also trending down slightly on a year-over-year basis, primarily due to decreases in infrastructure sales.
Demand for video conferencing endpoints is still growing, but the shift to cloud services is displacing a significant amount of infrastructure equipment revenue.
The dedicated system segment, the backbone of the video conferencing market, declined 6 percent in Q1 2016. Though endpoint demand remains steady, infrastructure sales are plunging as alternative approaches such as embedded, virtual and cloud-based multipoint control units (MCUs) gain acceptance.
PBX-based video offers a cost-effective way to enjoy multimedia communication using infrastructure they already have. PBX-based video is returning to year-over-year growth—primarily due to a pickup in software demand.
Immersive telepresence grew 19 percent year-over-year.
Video conferencing market will have revenue of $3.2 billion by 2020 and a five-year (2015–2020) compound annual growth rate (CAGR) of 0 percent.