Industry News

Pro Audio Video--Market Drivers and Forecast

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Technavio analysts predict the global pro audio video (AV) market will grow at a CAGR of close to 12% during 2016-2020. And cites digital signage as one of the main drivers of growth...

The research study covers the present scenario and growth prospects of the global pro AV market (various applications such as collaborative conferencing that include video, audio, web, and data conferencing, digital signage, command and control centers, tradeshow exhibitions, presentations, medical communications, virtual events, and corporate events) for 2016-2020. The report also lists the key vendors in the market (but does not present the market share of vendors in the market).

"The growing need for controlled systems from corporate firms drives the global pro AV market. With the use of control systems, all the AV equipment get interconnected and can be controlled from a single access, which reduces the extra effort needed for manual control. The increased use of digital signage as an effective marketing and promotional tool is another major factor, which is likely to fuel the market growth during the forecast period," says Ujjwal Doshi, Technavio analyst.

Technavio analysts highlights three factors contributing to the growth of the global pro AV market:

  • Increased demand for controlled systems
  • Increasing adoption of digital signage content management software
  • Growth in movie industry

Increased demand for controlled systems: As the AV technology develops, most of the AV devices are interconnected with the process automation. Control systems take control of all the connected AV equipment and other related accessories like display screens, PCs, microphones, lights, and cameras. Control systems are designed to simplify the AV process so that the meetings, events, and other collaborations that are inter dependent run seamlessly. The demand for controlled meeting and teaching spaces has increased in corporate, education, government, and other end-user segments. With the controlled systems in place, all the connected pro AV equipment can be operated with ease.

Market Research

Increasing adoption of digital signage content management software: In 2009, there were just above 50 vendors providing digital signage content management software and in 2015, this number grew to more than 500 vendors. This growth is due to the increase in the usage of digital signage. With the availability of out-of-the-box pro AV equipment and digital signage content management software, it is easy for small and medium-sized businesses (SMBs) to directly implement digital signage for their business without any customization. The availability of easy to use digital signage content management software has enabled many retail players to use digital signage for their brands.

Growth in movie industry: "The growth of the movie industry in US was one of the major reasons for the growing movie industry globally. The movie industry has grown by 33% in 2010-2015. The storylines along with the presence of visual effects, 3D effects, and IMAX theaters improve the experience of the moviegoers. Advances in home theater set up as well as in television series that are produced, are unable to give a tough competition to the movie market," asserts Ujjwal.

The global box office market is expected to grow at a CAGR of 6.95% in terms of revenue during the forecast period. The introduction of 3D and IMAX theaters provide a much better viewing experience and allow the global box office market to claim higher revenue. Ticket prices in 3D and IMAX theaters are substantially higher than standard tickets. With the increase in a number of screens, the opportunity for audio and projector manufacturers in the pro AV market increases.

Go Technavio Forecast

Samsung Buys Harman in $8 Billion Cash Deal

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Samsung Office

It's the biggest acquisition in Samsung's history: $8 billion for Harman International in an all cash deal.

And for Samsung it is less about audio/video and digital signage, and much more about automotive electronics.

Harman leads the connected car solutions market, with more than 30 million vehicles equipped with its connected car and audio systems, including embedded infotainment, telematics, connected safety and security.

Approximately 65% of Harman’s $7.0 billion of reported sales during the 12 months ended September 30, 2016 are automotive-related-- and its order backlog for this market at June 30, 2016 was approximately $24 billion.

Upon closing, Harman will operate as a stand-alone Samsung subsidiary, led by Harman’s current management team.

Samsung says it is pursuing a long-term growth strategy in automotive electronics, and therefore plans to retain Harman’s work force, headquarters and facilities, as well as all of its consumer and professional audio brands.

Samsung’s own Automotive Electronics Business Team, established in December 2015 to identify opportunities for Samsung in the automotive sector, will work closely with the Harman management to realize the expected growth potential.

It hasn't been a good year for Samsung. The Note 7 recalls are still in the headlines and at home Samsung is being grilled by prosecutors over why Samsung transferred 28 billion euros (about 30 billion U.S. dollars) last year to a company in Germany co-owned by Korean President Park's longtime confidante, Choi Soon-sil (under arrest for abuse of power and attempted fraud) and her 20-year-old daughter.

Samsung Electronics Co. nominated Jay Y. Lee to its board in a move that allows the son of its ailing chairman to take a more active role as Korea’s largest company faces its deepest crisis in years.

Meanwhile new CEO and vice-chairman Oh-Hyun Kwon moves ahead with an agenda thought to be inspired by Jay Y. Lee: the shift from organic growth to growth by acquisition. And it's a strategy that if it succeeds, will be copied by other Asian companies that look to the Korean conglomerate for leadership ideas.

The deal to buy Harman International Industries all about the purchase of an American automotive technology company,  a deal that would combine Samsung's display and semiconductor operations with a business that already builds sound and smart components for digitally connected cars.

Samsung wants to be part of the supply chain for technology that will transform cars in the way that smartphones transformed mobile devices. This market, Samsung says, will grow to more than $100 billion by 2025.

In addition, the combination of Harman’s brands and audio capabilities and Samsung’s expertise in consumer electronics could deliver enhanced customer benefits and elevate user experiences across Samsung’s portfolio of consumer and professional products and systems.

“Harman perfectly complements Samsung in terms of technologies, products and solutions, and joining forces is a natural extension of the automotive strategy we have been pursuing for some time,” notes Oh-Hyun Kwon, Vice Chairman and Chief Executive Officer of Samsung Electronics.

“As a Tier 1 automotive supplier with deep customer relationships, strong brands, leading technology and a recognized portfolio of best-in-class products, Harman immediately establishes a strong foundation for Samsung to grow our automotive platform.  Dinesh Paliwal is a proven global leader and, in our extensive discussions, we have developed deep respect for him, his strong senior leadership team and Harman’s talented employees. Harman’s sustained track record of rapid growth fueled by technology leadership and an unmatched automotive order pipeline reflects its commitment to innovation and customers.”

Dinesh Paliwal

Dinesh Paliwal, Harman Chairman, President and CEO, [shown in photo] explains, “This compelling all-cash transaction will deliver significant and immediate value to our shareholders and provide new opportunities for our employees as part of a larger, more diversified company. Today’s announcement is a testament to what we have achieved and the value that we have created for shareholders.

"Samsung is an ideal partner for Harman and this transaction will provide tremendous benefits to our automotive customers and consumers around the world.  Combining Samsung’s strengths in leading-edge displays, connectivity and processing solutions with Harman’s technology leadership and long-standing customer relationships will enable OEMs to provide new offerings for their customers.

"Partnerships and scale are essential to winning over the long term in automotive as demand for robust connected car and autonomous driving solutions increases at a rapid pace.  This transaction will bring Harman and Samsung’s complementary strengths together to accelerate innovation in this space.  More broadly, this investment underscores the strength of Harman’s employees, as well as our success and leadership across our markets.  We look forward to working together with Samsung to elevate experiences for consumers worldwide.”

Samsung expects the combination to deliver significant growth opportunities and benefits to customers by leveraging Samsung’s and Harman’s complementary technologies, resulting in increased market penetration across important end markets.

These are the complementary technologies mentioned in its press release...

Automotive: Combining Harman’s leadership in new connected car technologies, including its top positions in infotainment, cyber security, over-the-air updates and telematics, with Samsung’s significant expertise and experience in connectivity technologies, including 5G, UX/UI, display technology and security solutions, will enhance Harman’s automotive and connected services businesses to drive greater sales and provide significant benefits as automakers speed the adoption of next-generation connected cars.

Audio: Harman’s leading brands and cutting-edge audio systems include JBL, Harman Kardon, Mark Levinson, AKG, Lexicon, Infinity, and Revel.  The company also licenses Bowers & Wilkins and Bang & Olufsen brands for automotive.  All of these brands will greatly enhance the competitiveness of Samsung’s mobile, display, virtual reality and wearable products to deliver a fully differentiated audio and visual experience for customers.

Professional: The combination will also expand the combined company’s business-to-business platform through its ability to deliver integrated, large-scale audio and visual professional solutions at stadiums, concert facilities and other performance centers such as The John F. Kennedy Center for the Performing Arts and STAPLES Center – home of the GRAMMY Awards.

Connected Services: Samsung will gain access to Harman’s 8000 software designers and engineers who are unlocking the potential of the IoT market.  This collaboration will deliver the next generation of cloud-based consumer and enterprise experiences, as well as end-to-end services for the automotive market through the convergence of design, data and devices."

The transaction, subject to approval by Harman shareholders, regulatory approvals and other customary closing conditions, is expected to close in mid-2017.

Many industry commentators noted that AMX, one of Harman's recent acquisitions, did not get mentioned specifically in the press release.  That, to some, signals the possibility of a de-acquisition. On the other hand, AMX could play an important role in the Connected Services (and IoT) and large scale professional AV installations.

Acquisitions are new territory for Samsung (who once believed in only organic growth) so no one --including Samsung itself--knows what to expect. It's a new era.

Go Samsung Buys Harman


Thin Client Maker Enters Digital Signage

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Ilumineye DS Suite

VXL enters the digital signage market with Ilumineye DS Suite a software and media-player package to make high-quality digital signage available to everyone at a more affordable price.

Headquartered in India (with offices in EMEA that sprouted up during 40 years in the IT business), VXL is one of the world’s leading manufacturers of thin-client hardware. Their thin client background lead them into digital signage.

VXL’s VP for Worldwide Sales, Frank Noon, says the cost of current digital signage solutions puts it out of reach to many businesses. “We believe,” says Noon, “that the potential market size could actually be far larger if the technology was opened up to a wider customer demographic. That’s what we aim to do with Illumineye DS Suite.”

Illumineye combines a Windows-based software suite – Illumineye DS Suite – and dedicated media player – the Illumineye IQ-L Player, sold as a bundle at a one-off price.

The Illumineye software handles the creation of campaigns – building from supplied templates – as well as the deployment of campaigns locally (over a LAN or over the Internet). Digital campaigns can be created quickly, incorporating text, images, tickers, video, audio and much more. They can also be interactive, as Illumineye supports touchscreen displays.

The Illumineye IQ-L Player is a thin client, based on an Intel processor. With no moving parts, it’s built to be reliable and run at a low cost. It’s small and can be mounted on the rear of most screens using the inclusive VESA bracket.

The whole package is, according to Noon, designed to be incredibly simple to use. “We’ve built Illumineye DS Suite so that it can be used by everyone,” says Noon, “not just design professionals. It’s ideal for organisations of any size – from one person upwards, as Illumineye’s software can manage and schedule content on any number of displays.”

“Our software and media player stands – in terms of features – at least shoulder-to-shoulder with leading solutions. But we want to create a ‘desktop publishing revolution’ in digital signage, where organisations of any size can access the kind of power previously only available to professionals. It’s a complete package – customers just add their own display.”

Illumineye is available from VXL’s worldwide partner network. The bundle has a recommended retail price of US$399 / €363 / £305 for single units, with discounts available for larger volumes. (Prices are based on exchange rates as on 1st July 2016 and could change depending on currency fluctuations.)

Go VXL Illumineye


Digital Signage, Pro Displays: 7m Units in 2020

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IHS market estimate

The global market for digital signage and professional displays (public displays, public-display TVs and consumer TVs used in digital signage and professional applications), will grow at a compound annual growth rate of 8.3% (from 4.4 million units in 2015 to 7.7 million in 2020), says IHS Technology.

Public display growth in Q1 2016 was fueled by higher unit shipments of 32” and 49” displays and a rapid shift towards larger sizes in the education and corporate market. Displays sized 60” to 69” are the most popular category, and those between 70” to 79” are the fastest growing size category in the education and corporate collaboration verticals, according to IHS.

“Consumer TVs will continue to limit the growth of both public displays and public display TVs,” notes Sanju Khatri, director of digital signage for IHS Technology.

“As technology improves and prices fall, more customers will risk buying consumer TVs for use in commercial environments, because businesses that do not need to display sophisticated content may find consumer TVs perform well enough for their purposes. We’ve already seen two major consumer TV brands position their products in the public display space, and we expect this trend to increase in future.”

IHS Public Display Market

Digital signage and professional or public displays are intended to be used in out-of-home (OOH), public environments, and by multiple individuals simultaneously to convey information, advertising or other forms of messaging.

Public-display TVs are low-cost, all-in-one displays designed specifically for the signage market. For example, LG Electronics SuperSign and eZ-sign and Samsung Electronics Smart Signage TV.

Consumer TVs, while not originally intended for this purpose, are sold through business-to-business channels and often used for signage and professional displays applications. Hybrid displays, combining features of hospitality and commercial products and sold into the public display market, are also included in the consumer TV category.

The public display TV category targets small and medium-sized businesses for their retail signage needs. Shipments of 40”, 48”, and 49” public display televisions increased, due to more competitive pricing.

Go IHS Public Display Market Tracker


Stratacache Buys Control of Scala

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Stratacache acquires super-majority control of Scala.

What does Scala have that Stratacache wants? "Stratacache has great admiration for the Scala platform, the Scala team, the Scala Reseller Channel and the great history of the company," says Chris Riegel, CEO of Stratacache.

Chris Riegel, CEO of STRATACACHE

"With the Stratacache acquisition of Scala, we believe that we can help Scala and its partner channel realize the runaway success that Stratacache has experienced in the digital signage industry, while significantly improving the depth and breadth of products and services for Scala customers and channel partners worldwide."

Stratacache goes on to say in their press release: "Combining the largest U.S. digital signage company with the largest international digital signage company will provide significant operational synergies and allow both firms to deliver enhanced solutions and services to customers across the globe. Stratacache's strong balance sheet and large-scale operations will enhance Scala's competitive edge-- and Scala's global channels and significant reseller and partner network will fuel Stratacache's growing business outside of the United States."

So the main driver in the deal is that Scala has the international footprint and channel partners that Stratacache feels it needs to grow the business internationally. Scala has over 25 years' experience across wide-ranging industries (like retail, finance, education, healthcare and more) with a world-wide network of partners and developers spanning more than 100 countries.

The acquisition could bring operational scale and cost advantages to Scala and should benefit the Scala dealer channel (as Stratacache is publicly making a commitment to additional channel investment, resources and solutions to broaden the scope of offerings for the reseller channel.)

"Our offices will continue to remain separate. However, we will be growing our European footprint," the company told us today. "Stratacache will maintain both brands. For example, Toyota + Lexus=Toyota is a good way of looking at it. Multiple versions with different features, costs and capabilities are common in many industries."

The acquisition accelerates Stratacache's goal to reach $1 billion in annual sales by 2020. Their last acquisition (less than one month ago) was the Vertigo QSR Outdoor Digital Menu product line from Civiq Smartscapes (with patented “DACS – Direct Air Cooling System.")

A $500 million company with 270 employees (160 employees in Dayton OH headquarters), Stratacache works with major retailers, banks, stadiums and fast food restaurants. Among its biggest customers is McDonald's which implements Stratacache products in thousands of its restaurants.

"The changing nature of marketing is driving its growth as companies like McDonalds look at ways to automate some processes to cut costs. If a digital advertising product cuts other costs 3% or 5%, it quickly pays for itself," Riegel recently told Dayton Business Journal. He also told them Stratacache is "seeing its first $700 million project now."

"Our industry is changing greatly thanks to consolidations, and we're a leader in that," Riegel said to Dayton Business Journal. "We're going to continue to grow and accelerate our pace." Riegel said he's eyeing a third of the market share-- in an industry he thinks could grow to $3 billion to $4 billion.

Go Stratacache Acquires Super-majority Control of Scala