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Could Meeting Room Control Installations See a Spike in CAPEX?
Demand for Meeting Room Control (MRC) installations across all world regions slumped during Q1 2020 and vendors do not foresee this situation changing during this current, second quarter.
Supply issues from China during Q1 have been eclipsed by a lack of demand in the corporate and education verticals, with some businesses closed, others with staff working remotely and the higher education sector currently frozen.
Many integrators are not operating, having had to furlough staff. There could be rationalisation amongst the AV integrator landscape across all world regions as a result.
The only exception for the wider Signal Distribution (SD) sector has been for some urgent video transport installations for government departments and hospitals.
Whilst higher education institutions are presently closed to students, some are still putting out tenders for MRC and/or SD installations during Q3, as they prepare for the next academic year.
With hopes that many countries may emerge from COVID-19 lockdowns during H2 2020, there is some optimism amongst vendors and the channel that MRC orders from the corporate sector will recover, albeit slowly initially, during Q3.
Later in Q3 and into Q4, with end-users having budget to spend, vendors and the channel are expecting a surge in tenders and delayed installations, which could tighten the supply of hardware, or even create a temporary supply shortage.
Larger vendors tend to hold more inventory than some of their smaller, leaner competitors, which is enabling them to fulfil the limited demand that is still currently occurring and could also put them in a good position to weather a Q3/Q4 demand spike.
This potential supply situation later in 2020 could be compounded by overall capacity issues. There are concerns that smaller Chinese ODMs to the MRC (and SD) vendors could have to close their doors during 2020, after two or more quarters of downturn.
Post COVID-19, the impact on the MRC (& SD) sectors could well be that companies realise that remote working and videoconferencing is operationally effective, allowing staff to work remotely more frequently and reducing the need for meeting rooms, huddle spaces and MRC (& SD) installations. Some lower level spend on semi-pro webcams, microphones, headsets and even speakers for staff to use remotely may take place instead.
Therefore, Futuresource expects global MRC (& SD) sales across all vendors to be down in 2020, and even into 2021. With more staff working remotely post COVID-19, an existing and ongoing end-user push towards lower cost and more simple/user-friendly MRC solutions will continue.
It is unclear as of yet whether smaller MRC vendors will be able to weather this storm, but larger competitors are optimistic that these more minor players will do so, albeit that some could have to be strategically acquired by a larger vendor during this extraordinary year.
Videoconferencing vendors are making hay, from enterprise, education, government and consumer end-users in the current self-isolation and remote working climate. However, a few recent, high-profile videoconferencing ‘blunders’ could lead to security concerns amongst enterprise, education and government end-users post COVID-19.
There has also been a marked increase noted by AV distributors and resellers in sales of USB sound bars, USB cameras/webcams, headsets, laptop PCs and PC monitors to support remote working.
Beyond COVID-19, there may well be a more challenging market in the MRC and SD sectors, with cost-down and simplicity key for vendors and integrators. The latter may need to become leaner and more efficient in terms of headcount and making more use of remote monitoring and diagnostics solutions, in order to limit how often they have to ‘roll the trucks’ to customers’ sites.
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This blog forms part of the Futuresource B2B Technology COVID-19 series and draws insights from our regular reporting, all of which can be viewed here. Our analysts will be updating these blogs periodically to reflect the latest news and insight impacting this category.
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