IDC: Cisco ups lead over Polycom in enterprise videoconferencing and telepresence market

Market revenue totaled $2.64 billion in 2012, down 2.6 percent from 2011

Cisco (NASDAQ: CSCO) increased its lead in the enterprise videoconferencing and telepresence market over Polycom (NASDAQ: PLCM) last quarter, according to the latest stats from IDC.

Cisco's market share inched up to 44.8 percent in the fourth quarter from 43.3 percent share in the third quarter. Polycom's market share slipped to 23 percent in the fourth quarter from 25 percent in the third quarter.

Polycom has been struggling financially of late. It posted a 96 percent year-over-year drop in net income in the fourth quarter, while its revenue declined a more modest 9 percent year-over-year to $353 million. Despite the firm's troubles, Zacks Investment Research is maintaining a neutral stance on Polycom's stock.

"[T]he company is in the midst of its transition from hardware centric to cloud- and software-based business models, which is the main reason behind the sales execution problem. However, Polycom has made several product enhancements for its popular RealPresence platform and has entered into a strategic agreement with AT&T Inc. to offer cloud-based video conferencing services to different organizations," Zacks observed in a research note.

Overall, the enterprise videoconferencing and telepresence equipment market generated $739.8 million in the fourth quarter, an 8.6 percent year-over-year decline but a 14.9 percent quarter-over-quarter increase, according to IDC. For all of 2012, market revenue totaled $2.64 billion, down 2.6 percent from the 2011 figure.

The multi-codec immersive telepresence market continued its multi-year slide, posting a 32.8 percent year-over-year drop in 2012. The video network infrastructure segment was also down 4.5 percent in 2012 from 2011.

On the positive side, room-based videoconferencing increased 4.1 percent in 2012 and personal videoconferencing jumped 5 percent.

"Despite the overall weak 2012 performance in the worldwide enterprise videoconferencing market, we still see adoption being driven by interest in doing video integrations with vendor UCC [unified communications and collaboration] portfolios and business processes, as well as the increasing use of video among small workgroup, desktop, and mobile users. Video as a key component of collaboration continues to place high on the list of priorities for many organizations," said Petr Jirovsky, senior research analyst for worldwide networking trackers research at IDC.

For more:
- see IDC's release
- check out Zacks' research note (sub. req.)

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