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China at IP Videoconferencing Cutting Edge
with End-User Adoption Far Surpassing Worldwide Growth,
According to New Wainhouse Research Report

84 Percent Jump Makes China a Worldwide Visual Communications Power


April 20, 2004, Brookline MA - With China's videoconferencing market up 84 percent in 2003 compared to 5 percent worldwide, China's affinity for visual communications has placed it at the cutting edge of visual IP communication adoption and has made it one of the world's largest markets for visual IP communications equipment, according to a new report by Wainhouse Research.

The 84 percent jump translates to revenue increasing to $97 million in 2003 from $53 million the previous year in China for equipment at these videoconferencing sites, also known as endpoints. Worldwide revenue growth in this category moved from $574 million to $601 million.

"The size of the market combined with rapid growth has made China one of the largest country markets accounting for a surprising 13% of the worldwide revenues and 17% of the worldwide units in the videoconferencing market," said Andrew W. Davis, Wainhouse Research Managing Partner.

According to the report, mainland China deployed its first IP video network in 1998 and additional significant deployments have continued such as the 2002 UniVideo network which reaches over 300 cities in China and supports more than 3000 simultaneous video calls and has been dubbed the "world's largest IP videoconferencing network."

"This type of service is pushing the envelope in terms of interoperability, connectivity, and network architecture," according to the report. "Turning to the desktop, voice and video over IP are key selling features of web conferencing applications, whereas in other markets, these features are still optional add-ons."

Titled "Videoconferencing Takes Hold in China -- IP Communications and the Great Leap Forward," the report, written by Beijing-based Wainhouse Research analyst Stacy Austin Li, is based on interviews with both Chinese and non-Chinese manufacturers doing business in mainland China, as well as resellers and network service providers.

The report takes a detailed look at the products, technologies, cultural aspects, and network conditions that are driving adoption of video communications in mainland China. The 170-page market study includes a detailed analysis of the current market for conferencing products, a description of the major IP network investments being made by the major carriers, and a five-year forecast for video network infrastructure products, enterprise group videoconferencing systems, and enterprise personal videoconferencing systems.

The study also discusses the local competitive environment, with many China-based companies finding success in-country against the established, well-known videoconferencing vendors and now looking to expand their business outside China.

"Videoconferencing Takes Hold in China" covers 21 vendors in the video communications industry, 14 of whom are China-based. Vendors covered in this report include Aethra, DST, DVISION, FVC, Huawei, Polycom, PowerInfo, Radfort, RADVISION, Sony, SuZhou KeDa, TANDBERG, UIC, V2, VCON, ViCall, ViewTran, VisionNex, VTEL, Zoom Multimedia, and ZTE.

English and Chinese versions of "Videoconferencing Takes Hold in China" are available in hardcopy and electronic format. Details, including an executive summary and table of contents, are available at www.wainhouse.com/reports.

Wainhouse Research is an independent market research firm that focuses on critical issues in rich media communications. The company conducts multi-client and custom research studies, provides strategy advice to vendors and end users, publishes a variety of reports, and delivers public and private seminars.

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