17.12.18

The turning tides of the AV market

Turning tides

John Bailey, Whitlock’s vice president of technology shares his thoughts on the immediate challenges facing the AV market.

TK: What’s your outlook for the pro AV market (particularly in EMEA) over the next year or two? For example, are there any technologies with a particularly high interest and adoption (e.g., AR/VR)? If so, what’s driving that demand?  

JB: We believe the pro AV market will remain strong over the next 2-3 years, but will continue a major shift towards scalable huddle room solutions that support UC platforms. That forecast is supported by major analysts who are predicting a 15-23% CAGR for UC cloud technology, as well as real estate and workplace trends, and the total global addressable huddle room market.  

That shift brings some difficult change for the AV industry which was built on technical complexity and customisation, because UC “cloud-connected” rooms are simple and standardized and built for scale.

To some, this might indicate further commodification of AV hardware. However, the scale of the deployments also requires professional services such as program, project and quality management.

Regarding emerging technology, we see a lot of applications for augmented reality solutions. Corporate customers are less interested in virtual reality, which continues to impact niche applications such as design and modeling because it is typically an inherently personal experience.

AR has direct applications for corporate collaboration and digital signage, it can be delivered via a variety or hardware platforms including personal BYOD devices and can be shared within groups.

AR is, in many cases, is a natural extension of other innovations. In advanced specialty applications, we are likewise seeing AR make huge strides in research, education and healthcare use cases where medical innovation and the “4th Industrial Revolution” are rapidly changing the way we live our lives.

TK: How might the trade wars, Brexit and other politics affect pro AV, and how should/could AV firms respond?

JB: We are certainly keeping an eye on the EU and particularly the Brexit situation in the UK, as well as the current shift in US trade and tariff policies. Both situations are impacting manufacturers and buyers in our industry.

TK: Will the prices of raw goods and finished products increase as a result, or will the tariff disputes be settled before they increase yet again?

Amongst our suppliers we have seen a surprising range of responses to the US trade policies and tariffs, in addition to the rising cost of raw materials in the US such as steel and aluminium. These tariffs are not only making Chinese products more expensive in the US, but they are also driving up the cost of US-based manufacturing. Some suppliers have direct and succinct responses to the situation, some are cautioning price increases are coming, and still others have no response and in fact no dialogue at all.

When we consider how competitive the market is currently for display technology, particularly direct-view LED, it’s hard to not anticipate price increases resulting from these tariffs. In addition, the tariffs may increase again in January 2019. One of the worst things for business is uncertainly, and there is plenty of that currently surrounding these trade disputes and their impact on our industry.

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