Radvision sees branded products as market share key
* Seeks market share as key customer Cisco buys rival
* Launches high definition video conference room system
* Product to add $3-5 mln in sales in Q3, Q4, more in 2011
By Tova Cohen
TEL AVIV, April 19 (Reuters) - Radvision RVSN.O is accelerating its move to offering complete video conferencing systems under its own name as it seeks to expand its market share following Cisco Systems' (CSCO.O) acquisition of rival Tandberg.
U.S. network equipment maker Cisco accounted for 41 percent of revenue in 2009 at Israel-based Radvision RSVN.TA, a developer of video network products.
Cisco on Monday completed an offer for Norway's Tandberg [TAA.OL], the world's top video conferencing equipment maker.
Radvision has traditionally invented technology and systems that were primarily sold under the name of companies such as Cisco, Sony and LifeSize, which was bought by Logitech LOGN.VX.
"Now is the time for us to start selling our brand name. The opportunity is here and it's up to us to exercise it," Radvision Chief Executive Boaz Raviv told Reuters in an interview.
"There is consolidation in this market and because of this customers are left with fewer and fewer options from whom to buy end-to-end video conferencing solutions."
Radvision on Monday launched a high-definition video conferencing room system, its second endpoint product and the first based on its acquisition in February of Aethra technology.
The system delivers two full high-definition video streams that can run over the Internet. The basic product costs $7,400, less than half that of similar products offered by competitors, Radvision officials said.
Chief Financial Officer Adi Sfadia said Radvision expects to ship the system towards the end of the second quarter with sales of the product reaching $3-$5 million in each of the following two quarters.
"We expect to see significant growth in 2011. We expect the acquisition will be accretive in the second half of 2010," he said.
Radvision had sales of $81 million in 2009.
Customers need an alternative to Cisco-Tandberg and Polycom (PLCM.O) offerings, said Moshe Machline, vice president of corporate marketing.
"Before this we sold the engine under the hood, we were a pure infrastructure company. From 2009 we realised we wanted to move up the food chain and offer a complete solution," he said.
Cisco will incorporate Tandberg infrastructure into its product lines and Radvision will see its revenue decline, though Raviv estimated it will retain 30-40 percent of its Cisco sales.
Radvision has been seeking new ways to boost revenue, launching last month a free application for mobile devices to manage video conferences.
Radvision shares closed at $6.64 on Nasdaq on Friday, down from a year high of $9.61 in September prior to the Cisco deal.
Tandberg and Polycom control three quarters of the video conferencing products market, which is worth around $2 billion and is growing by about 17 percent a year.
Machline said incidents such as the volcano eruption in Iceland that has paralysed European air traffic will serve to further fuel demand for video conferencing systems.
"Up till now we played only in a quarter of the market, which is infrastructure. Now we are going to play in the entire market," Sfadia said. "Even if we only take 10 percent we are talking about a few hundred million dollars." (Editing by Michael Shields)
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