Video Conferencing in China: Three
Drivers to Watch
July 31, 2008
CCID Consulting data shows
that the size of China's video conferencing market reached 2.98 billion Yuan
in 2007, up 28.26% over 2006. Government, financial services, energy,
telecom, and other Chinese sectors that have capital and require secure
communications have been the past drivers of growth. Much of the video
conferencing in these sectors have been built out. Growth has slowed
compared to previous years, but there are three video conferencing drivers
Growth Prospects in
China's Tier 4 and 5 Cities
development continues to expand to smaller, more rural areas. China's
government and commercial sectors will have the need to better its
infrastructure, including video conferencing capabilities, into these Tier 4
and 5 cities. However, these locales are very price sensitive, so video
conferencing products must be simple, low-priced systems.
Vendors focusing in this
segment are Chinese domestic ones, which provide high price-performance and
associated branding. These vendors include KEDACOM, DVISION and AVCON, and
will be competitive relative to multinational vendors.
Software-based, Desktop Video Conferencing Popularization
Eleven million SME's in
China drive this segment, as they are realizing the benefits of more
efficient communications through this type of video-conferencing. SMEs also
have low budgetary requirements, and they also lack technical resources to
maintain more sophisticated systems. Their usage rates may also be lower
compared to government and large enterprise sectors.
Therefore, SMEs are
adopting video conferencing systems that leverage their existing resources,
such as personal computing assets, related software, and the Internet, with
relatively little additional investment. And these resources are getting
more powerful, with faster and more powerful broadband access, multi-core
PCs, and graphics display cards. The characteristics of these desktop
systems trend towards more collaboration by way of sharing documents,
graphics, whiteboards, desktops, VoIP, and other files.
For China's software-based
video conferencing market, vendors AVCON, Radfort, and V2 account for over
80% of the total market share, with AVCON leading at 36%.
Availability of High
Definition (HD) Video Conferencing Systems
HD conferencing systems
were introduced in China in 2005. Since then, China's original adopters of
video conferencing, that of government, financial services, and power
sectors, have started to test and construct long distance HD systems.
and price reductions have been drivers for more demand. The advent of H.264
standard enabled higher transmission of data rates to support higher
resolutions. Based on H.264, AVCON launched 1080p systems in September 2007,
and also a first in "telepresence" systems in China. HP and Cisco launched
720p telepresence systems in China as well.
Given the improved scale
economies and supply chain of 1080p video products, prices have gone down
rapidly. Lower prices for 1080p screens mean lower prices for overall video
conferencing systems. Also, video processing chip providers, such as TI,
have also cut prices. The overall effect is providing enough incentive to
upgrade older, high-end systems to HD.
AVCON takes the lead in the
HD video conferencing market, with a market share of 30% in 2007. Other
leading vendors in China are Polycom, TANDBERG, and LifeSize.
For more information
contact us for these and
other China-related data, information and products.
Unless otherwise specified,
all information provided is sourced from CCID Consulting.