Steve Kilroy, UK sales manager for iiyama International discusses how the growing collision of IT and AV is affecting the UK displays market.
During the opening panel discussion at this year’s Integrated Systems Europe (ISE) trade show in Amsterdam, moderator and Wired UK’s editor-in-chief David Rowan talked about how AV and IT are colliding as a result of today’s rapid technological advancements (in particular sensor technology).
“You’re in a very exciting moment of two worlds colliding,” he intoned. “The sensor connected world colliding with the storytelling tools of audio-visual. I think that’s a big moment of potential growth for a lot of people’s businesses here [at ISE].”
It is certainly true that the AV and IT markets are converging, particularly within the corporate sector as the traditional corporate demands on IT business working practices become increasingly important to AV businesses.
Many corporate-facing integrated AV solutions now require support from IT, mainly due to an increasing number of video conferencing systems being integrated into IP-based Unified Communications platforms, as part of mainstream IT networks.
In addition, the growth in the digital signage and display markets has meant that more audio-video technology is being entwined into IT networks. At the same time, the big IT and telecoms vendors are expanding their offerings to include meeting space demands, further bringing AV and IT into the same orbit.
Indeed, as AV is forced to take on more traditional IT habits and IT is increasingly working with AV products and projects, it’s becoming difficult to see the lines between the two industries.
For us at iiyama, we consider the AV and IT market to be one whole, with IT systems integrators selling AV and AV integrators employing IT specialists to help them with the increasing number of IT-style demands on their businesses. We don’t distinguish particularly – although the traditional market for consumer desktop PC sales tends to be an AV-free zone, of course. We have tended to prioritise traditional IT organisations, however, largely as a result of our history as a desktop display supplier, but also due to the fact we have come up against some barriers to entry in the AV channel – more of which below.
That said, with both sectors working in unison the display market as a whole is a lot easier for us. We welcome feedback from both channels to make our product better for the future. The types of feedback we’re getting demands higher resolution screens – which we’ve addressed – and for bigger projected capacitive touch (PCAP) displays, which we’ve answered with the new 65in. We’ve listened to what people from both sectors want over the last 2-3 years and have tweaked our line up accordingly.
It’s interesting that the display market is currently fairly static for anything under 32in, whilst there’s good growth for bigger screens – the traditional feeding ground of the AV integrator, but increasingly IT too, particularly in the corporate sector.
In 2013 approximately 3.4 million panels under 32in were sold in the UK and this will be roughly the same for 2016 – although possibly 600,000 higher. Indeed, there’s been very little growth in the last 3-4 years – barring a small spike in 2014 as a result of Microsoft charging $1 for its OS, which provided growth for systems integrators. Large format displays (LFDs) are definitely where it’s at, whether you consider yourself an IT or AV integrator.
iiyama has regularly held one of the top positions in the IT market during 2016, with only the obvious number one and two of Dell and Hewlett Packard, plus the high volume, entry level Acer, ahead of us in terms of UK sales. Compare our AV sales – ie, sales via traditional AV integrators – and there’s no comparison; up against the likes of LG and NEC we’re very much the new kids on the block, and cannot always compete with the existing relationships that integrators already have with these big brands.
However, as stated above, IT is effectively pushing into traditional AV territory in any case, and given that iiyama has made a conscious decision to prioritise IT integrators over their AV counterparts, our position behind Dell, HP and Acer (around 7.8% market share in Q2) should not be viewed merely in IT terms.
One of the reasons we decided not to focus too much on the mainstream AV channel is that end users often stick with a particular solution, not changing it for years – so it can be difficult to break down the door. However, more recently we have been succeeding with renowned distributor Midwich, with some of the key AV integrators starting to specify iiyama.
But most of our success is via the mainstream IT channels – with Misco UK, Computacentre, CDW etc. They boast a newness and drive towards AV solutions that the AV channel doesn’t always have, as well as a confidence that they can deliver these solutions and have the knowledge in house –particularly as so many of today’s AV jobs require IT knowledge. We’re starting to see the likes of Misco and Insight getting more involved in AV solutions, bringing AV teams in house just as the AV integrators are adding IT knowledge to their teams.
Whilst AV outfits have very good reach – at least, the larger ones do – the likes of Misco have bought us the truly massive projects – for the likes of Vodafone and HSBC – as well as other really big corporate opportunities which we wouldn’t necessarily see coming through traditional AV channels.
As alluded to earlier, during our early attempts to reach the traditional AV partners we realised that they already had strong relationships with the likes of NEC, Samsung, LG etc – so there was a barrier to entry for us. At the same time, we recognised that the traditional IT channel no longer distinguishes between an IT network and an AV network – there’s fundamentally no difference. Ultimately it’s the same type of hardware driving the same type of screens over the same type of networking infrastructure. It’s basically people approaching things from different angles.
So we decided very early on that our best approach was to focus upon that mainstream IT channel. And of course, as discussed, we already have existing relationships with a lot of these guys. As mentioned, we do still focus on some of the traditional AV guys – some of the smaller guys that do some amazing work – for example, TV Systems over in Stoke on Trent which specifies our displays for classrooms in schools in Stoke and more widely into Staffs as a whole.
But what of Brexit (or, at least, it’s pre Article 50 incarnation)? Well, it has meant that the cost of panels has risen as a result of imports rising by 25% in UK. Whilst this hasn’t had much of an effect on corporate markets – it has the biggest growth for large format display (LFD) – it is affecting the consumer market and those sectors where budgets are fixed. In the NHS, local government and education sectors we expect reductions in volume of up to 20%; it’s impossible to predict if this will get better or worse following Article 50 and beyond, of course.
The retail sector seems fairly stable at the moment and iiyama is doing particularly well with smaller screens – such as 32in displays going into clothing chains. Car showrooms are similarly stable, with our 70 and 80in displays being used for back office solutions and workplace development. Again, it’s important to note that these traditionally AV markets are being reached, for us at least, largely via the established IT channels.
In terms of desktop touch screens, we’ve always been strong in IT. However, we are now starting to see growing demand for medium sized 24in, 26in touch displays within the public sector environment at local government level; something we’ve never seen before. At this screen size, sales are still very much in favour of a view-only monitor, but whereas we used to get an order for one or two amongst tens of thousands, we’re now starting to see several hundred a month.
Our biggest success in touch display is with large format models, however – again, traditionally AV but increasingly an area that IT companies are moving into, particularly for corporations and to a lesser extent in education. iiyama’s 65in and 70in models have proved very popular within the education sector, and we’re just about to launch our new 86in.
We’re succeeding in interactive large format display (LFD) because we’re a commercial brand and all of our production lines are designed to produce commercial standard technology – 24/7 operation, high durability, high brightness, great screen quality. Initially designed mainly for the commercial retail environment, in the past three years we’ve had to redesign our screens for the education sector as a result of demand from teachers; increased corporate demand may lead to a similar outcome.
Going back to Brexit, certain industries are likely to start to benefit from a weaker pound, and we’ve started to focus on these areas with our planning and strategy. Finance, agricultural, leisure and tourism, manufacturing, corporate: these will all benefit positively from the situation. In some case this means the ability to employ more staff; we’ve already seen this with telecom providers investing more in the UK where before they may have held back. Basic monitors, digital signage, boardroom solutions; we’ve even seen some business via the architecture market, where LFDs are specified to review drawings, present to clients, etc. Again, much of this Brexit-busting success is via the IT channel.
Our strategy is to continuing focusing on really good, high quality products; ensuring they are feature-rich with performance and longevity to match. There are plenty of brands that offer cheap displays, but we’re not box shifters. Anyone can sell on price, but our unrivalled performance numbers and low failure rates speak for themselves.
Our 7.8% market share is testament to our hard work and the quality and performance of iiyama panels. We got there not by being the cheapest. We want to continue supporting margins in the channel and ultimately satisfaction at end user level.
My advice to those in both the AV and IT channels is to think outside of the traditional route of where they things are going to go: look closely at boardroom solutions and the integration of interactivity within the Office 365 environment. Agile working is huge at the current time, so it’s essential that specified displays have multiple inputs. But also concentrate on multiple monitors for today’s data rich, application-heavy working environments: a video wall for the desktop. This helps to increase productivity – if you can see more, you can do more – and makes people work more efficiently.
Scalability and reliability, of course, has always been crucial to the success of IT companies, with IT departments within corporates in particular preferring standardised solutions that they trust will work – whilst being supported on their networks in the same way as their PCs and servers. This remains important, even as IT and AV converge, and it has been an area where the AV sector has struggled in, with AV integrators more used to installing unique, one-off systems often failing to adopt IT-esque mindsets and procedures.
We’re not particularly concerned about this at iiyama however. After all, as explained, at the current time the majority of our business – ‘AV’ or ‘IT’ – is generated via the IT channel. However, if those vendors of audio/video products that prioritise the AV channel, and the AV sector as a whole, are to enjoy the “big moment of potential growth” discussed at ISE, AV needs to get more IT savvy. Then we can all fiddle while Brexit burns.