AV Magazine
The positive vibe expressed at ISE was no trade show bubble if respondents to AV’s examination of the market in Western Europe are anything to go by. Despite the macro-economic and political challenges and uncertainties that lie ahead, there is a strong and encouraging message among pro-AV kit vendors and service providers.
“If asked twelve months ago I would have been somewhat concerned since all the political and economic upheaval during 2016 at times threatened to have a significant impact,” says Colin Farquhar, ceo of Exterity. “Instead, the market in 2017 is buoyant and feels ready to move forward.”
Initially, the result of the referendum gave “a huge shock to companies and the stock market showed signs of negativity,” says Robin van Meeuwen, ceo of Crestron EMEA. “However, post Brexit and it’s business as usual. Companies have stuck to their plans and commitments which is good for everyone.”
“The underlying demand for AV is very strong and is unlikely to be impacted by economic or political factors,” agrees Rob Muddiman, EMEA sales director, ZeeVee.
Brexit talking points
Naturally the big talking point, not least because of the lack of clarity in potentially revised trade agreements, is the UK’s pending departure from the EU. The issue is one that affects any business which may benefit from a weakened pound on export while paying more for imported goods.
“As a UK-based manufacturer the exchange rate is a positive for us on the one hand and certainly makes us more competitive internationally,” says Farquhar. “The risk is that these benefits are cyclical and short term. At the same time the goods I require to manufacture my products are increased in cost and then we face the challenge of passing that cost on to the customer or accepting reduced margins.”
Price of course is one factor among many for most AV customers. “Value is just as important as price, as is the capability of the product you are delivering,” says Farquar who has promising sales forecasts for the year ahead.
DB Systems invested £1.5 million in new rental stock in 2016, ranging from 2.6mm LED to TOLED screens. “We can only see this investment strategy continue through 2017 and as we approach Brexit, companies will need to get out there to sell their product and service,” says Oliver Richardson, the company’s group sales and marketing director. “The meetings and events industry has a big role to play in Brexit Britain. The events industry in the UK is particularly strong with many UK-based companies playing critical roles working across the EU week in, week out.”
For DB, the most important debate around Brexit is the customs union and whether Prime Minister May will withdraw from the current arrangements to strengthen the UK’s negotiating hand elsewhere. Worth noting too is the upcoming Dutch national election (March), French presidential run-off (May) and September’s federal election in Germany.
“No-one can say exactly what post Brexit will bring but we hope that the UK government and EU will find a way to work prosperously going forward,” says van Meeuwen.
“Like most businesses, we hope that the UK government and the EU will reach a trade agreement quickly,” says Pierre Gillet, vice-president, international sales at US-headquartered, BrightSign. “Essentially, we need to wait and see what the new regulations will be and what, if any, difference they make. We trade in a great many countries with very different import regimes and standards, including Russia for example. We are confident that we will be able to adapt to whatever new situation emerges from Brexit.”
Muddiman shares the view of many respondents: “I think everyone in the business world is hoping for agreement on the trading relationships to be reached quickly, and that there will be the minimum of friction in the new arrangements in terms of tariffs or other restrictions.”
Currency flux
That said, Brexit appears to have had very little impact on business to date. “We don’t foresee any major concerns moving forward, but we are wary and will continue to monitor the landscape closely as more details of Brexit’s implementation unfold,” says Pete Egart, vice-president EMEA, Daktronics.
With multiple offices and two manufacturing facilities located in Europe, Daktronics is “very well positioned to serve customers with local resources. This helps us limit the risk associated with any political fallout that may arise.”
Adds Gillet: “Obviously, we’ve seen the currency fluctuations but as the cost of the (OVP) player is normally a very small proportion of the overall budget for an installation this hasn’t made a huge difference.”
The large currency changes, which have seen the dollar strengthen 25 per cent against the pound and the Euro achieve near parity, is the most influential factor.
“These (changes) could well continue or even widen but, until we see how the negotiations take shape, it is almost impossible to calculate the real affects,” says Melinda von Horvath, vice-president, sales EMEA, for Peerless-AV. “Whatever happens, alongside our headquarters in the UK we are planning warehousing in mainland Europe and will continue to develop our already strong EMEA business with local staff in all major regions.”
The only impact distributor Maverick has seen is price pressure due to the weaker pound. “This has impacted on vendor pricing with many now showing material increases,” says Jon Sidwick, vice-president, Maverick Europe. “From a trading perspective it has had no noticeable impact on sales. Moving forward we know we already have the infrastructure to trade across multiple geographies in multiple currencies. We have one pan-EU ERP system and this is a massive advantage for our customers enabling us to quickly adapt to whatever the outcome of Brexit is.”
The evolution of the pro-AV market across Europe is closely linked to that of the local economy. Recently, investments in Italy and Spain have been put on hold or were kept to a minimum, reports Christophe Malsot, Crestron’s regional director South-West Europe and North-West Africa. “For a few months now, private sector companies, the tourism industry, administrations and governmental organisations have begun investing in new kit. In Switzerland and Germany, where the economy is robust, considerable pro-AV investments have been made. On the other hand, France is a stable market but is in a wait-and-see approach before the election.”
Crestron sees companies turning towards fast-growing AV markets which it marks out as the hospitality industry or multi-purpose stadiums.
“Paris, Geneva and Madrid are very dynamic cities in terms of AV integration, especially in the hotel industry, the retail market and showrooms,” reports Malsot.
Immersive demands
Barco spots demand for more immersive visualisation, more interactivity and more devices continuing beyond 2017. “This will internally drive higher resolutions and more integration across devices and technologies, including BYOD,” says Peter Pauwels, director, strategic marketing, ProAV. “The increased focus on virtual reality beyond the glasses will support that for sure. In a true visitor experience, the guests want to experience things together. This will drive 3D, higher resolution, immersive sound.”
In terms of innovation and the opportunity to push the technology, western Europe offers a wealth of opportunity.
“The European AV market is advanced by global standards and among the most creative in the world – certainly on a par with the US if not ahead sometimes,” is Gillet’s view. “There are a lot of very imaginative display walls going up, with twenty or more screens in random configurations. Europe is catching up quickly in interactive retail kiosk installations also, though there are probably more of these in the US.”
Collaboration into the corporate sphere is by far the largest growth area for Maverick driven by the legitimisation of AV from companies such as Microsoft, Google and Cisco.
“For all sizes of organisation going forward, ensuring a strong collaboration system in a must-have, not a nice-to-have and this is a huge opportunity for all verticals where communication is key,” says Sidwick.
Signage appears particularly strong with BrightSign and Daktronics suggesting the pro-AV market in Western Europe is in a state of expansion.
“There’s strong growth in sport venues, retail shopping centres and digital OOH applications,” says Egart, who attributes this in part to the internet and social media creating an environment “where today’s consumers expect to be engaged and entertained at levels far exceeding the past.”
For BrightSign, retail is “easily the biggest” vertical in Western Europe. “We are seeing more demand from education now, especially European universities which are following the US in making more use of on-campus signage. AV is also spreading beyond the corporate foyer and the boardroom on to the production floor.
“There is no doubt that the major capital cities are a driving force, both in terms of volumes of screens in use and in innovation. London is a pioneer in installing digital advertising hoardings on the underground network. Museums in Paris and Amsterdam, and fashion shows in Milan are also areas of strong innovation.”
Financial sector
At Exterity, demand in the financial sector remains strong, a trend which Farquar puts down to those organisations dependent on information “especially in times of uncertainty” looking to technology to help them more efficiently distribute it.
While there are reports of financial relocations from London to Berlin or Paris, from Farquar’s perspective this is anecdotal. Another, possibly Brexit-related vertical with inflated interest in AV is government. “Logically it makes sense since these organisations across the EU are going through a lot of flux,” he observes. “They are reviewing how they operate as part of the whole process of Brexit and the need to communicate has never been higher.”
Verticals drive growth
Western Europe is one of the world’s leading markets in terms of technical innovation and creativity. Mobile device penetration is extremely high, providing the opportunity to address customers in a direct and very personal way. Look around any airport lounge or restaurant in the region, and most people will be looking at mobile devices. AV professionals in the region are becoming increasingly savvy in tying into that.
ZeeVee’s Muddiman spies growth in education and medical particularly for AV-over-IP products “replacing proprietary matrices in more and more applications. In every case, competitive pressures are driving demand, he says, “whether that’s universities having to compete by having better AV in learning rooms or retailers needing to find ways to engage visitors.”
“There is no doubt that AV-over-IP is being more readily adopted by IT integrators, however the more open minded and progressive AV integrators who are willing to invest will have an advantage,” urges Muddiman.
Peerless reports strong interest in retail and transportation with LED its main focus in the short term, along with video walls and kiosk. “It will be interesting to see how the commercial applications for VR develop over time,” says von Horvath. “It’s an exciting place to be right now. Innovative collaborative products have the opportunity to transform the way people work, play, interact and learn.”
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