Audiovisual Industry Forecast Finds Residential, Retail and Digital Signage Top Growth Markets for $19 Billion U.S. AV Market.

NEW YORK -- The increased use of several audiovisual (AV) technologies in key market sectors is driving growth in the AV industry, according to the International Communications Industries Association's 2005 Market Forecast Survey, released at a press briefing in New York today.

More than 75 percent of the audiovisual companies surveyed forecast revenue and profitability increases over the next few years. "This is a high growth industry," said Randal A. Lemke, Ph.D., ICIA Executive Director. "Audiovisual communications is everything from videoconferencing and streaming media to plasma displays, digital signage and interactive whiteboards. It's everywhere from the classroom to the boardroom to the living room. There's a real demand for AV professionals to help select, integrate, install and service AV products for optimum performance."

Expanding markets

"AV solutions are growing in all markets. The survey findings clearly indicate the upturn of mainstream awareness of AV technologies," said ICIA Board Member Jim Smith, Director of Strategic Initiatives, HB Communications, Inc. "We now see AV technology as a necessary component of the home, business, educational facility and healthcare."

Beyond the top markets, such as business, education and government, AV technology is making significant gains in other areas such as retail, sports arenas, museum exhibits, meetings and conventions, healthcare and the worship market. More than 25 percent of the dealers surveyed plan to enter new markets as awareness of AV technology grows.

Growth in residential market

Both here and abroad, the increasingly sophisticated residential market is growing. Nearly 25 percent of dealers in North America and nearly 30 percent in Europe are involved in residential sales. "It is interesting to see that nearly one-quarter of AV integrators in North America are serving the home market," said Tim Lindstrom, RCDD, Senior Consultant with Pelton Marsh Kinsella and Chair of ICIA's Independent Consultant in AV Technologies (ICAT) Council.

Evidence of the increasing crossover between commercial and residential applications is the launch of a Residential Pavilion at InfoComm 05, the largest tradeshow of the professional audiovisual industry, to be held in Las Vegas this June. Included in the pavilion will be home theater systems, high-definition displays, residential audio, lighting, electronics and security systems, satellite equipment and home automation systems.

Signage and displays

Among the most positive trends respondents indicated was the increased use of digital signage, particularly in the retail sector, for delivering a message, selling products or simply providing information. "The market for large information displays is growing at a tremendous rate, as increased competition leads to lower prices, and demand increases from businesses and universities," said Bob O'Donnell, Research VP of Clients, Mobility and Display Technology at market research firm IDC.

AV converging with IT

Survey respondents noted some growing pains as IT professionals gain the knowledge and technology needed to host AV solutions such as streaming media on their networks. AV/IT convergence is driving the introduction of technologies supporting a number of newer applications including streaming media, webcasting, wireless and software, all relative newcomers in the AV space. Currently these segments have low penetration rates but are expected to grow significantly as products continue to web-enable technologies.

Europe joins survey; EU market sees similar growth

A significant change in the ICIA 2005 survey was the addition of the European marketplace, with European AV dealers included for the first time in the survey this year. Respondents in both North America and Europe are upbeat about the potential for significant growth in the residential market and surges in retail/digital signage, security and healthcare.

To order a copy of the 2005 Market Forecast Survey and other industry reports and for information on InfoComm 05, visit the ICIA website: www.infocomm.org, or call 800.659.7469.

About ICIA/InfoComm

Established in 1939, ICIA is the largest trade association for the professional audiovisual communications industry with more than 3,200 individual and member companies in 56 countries. ICIA provides education, training and certification, information services, AV news, Market Intelligence and the AVolution industry awareness campaign. ICIA is the founder of InfoComm International(R), the largest conference and exhibition for AV buyers and sellers worldwide. InfoComm 05 will be held June 4-10, 2005, in Las Vegas, hosting more than 700 exhibitors and approximately 25,000 attendees.

Highlights of the International Communications Industries Association(R) (ICIA(R)) 2005 Market Forecast Survey

Revenue

Actual revenue from 2003 to 2004 increased a median of 8.7 percent for North American respondents and 20.6 percent for European respondents. The typical North American respondent expects revenue to increase a median of 16.7 percent next year; the typical European respondent expects a 12.5 percent increase.

Profits

There is a clear trend toward increased profitability in both North America and Europe. While losses are reported by some respondents in 2003 and 2004, none are forecasting a loss for 2005. Profit as a percentage of gross revenue for North American respondents increases from a median of 2.1 percent in 2003 to 5.2 percent in 2004 and is expected to hit 6.2 percent in 2005. Responses are quite similar among European respondents with medians of 2 percent, 3.7 percent and 6.2 percent for the respective time periods.

Vertical markets

As in the 2003 and 2004 studies, the business/corporate market is the most significant market category for respondents, accounting for an average of 35 percent of total 2004 gross revenue for the North American respondents and an average of 31 percent of total gross turnover of European respondents. The business/corporate market is also the most prevalent, with 80 percent or more of the respondents deriving some amount of their 2004 gross revenue/turnover from this market. Other important markets are education (college/university) and the government/military market.

Plans to enter new vertical markets among the North American respondents have accelerated in the past year: 57 percent say they have at least potential plans in mind to enter a new market, far above 39 percent seen in the 2004 survey and slightly above 53 percent in the 2003 survey. A similar picture is seen among the European respondents with 54 percent saying they will "definitely" or "perhaps" enter a new market in the next three years. As in the previous Market Surveys, the strongest interest in new market entry is among the largest companies.

Products and trends

"Increased use of conference and collaboration" and "integration of AV systems into the customer IT environment" are considered to have the most positive industry impact by a wide margin, with a strong majority of respondents in North America and Europe rating these trends positively. On the opposite end of the spectrum, a majority (or near majority) of respondents feel "IT firms entering the AV marketplace" and "margin erosion in pro-AV products" are having a negative effect upon their business.