Radvision looks to HD to win market share

TEL AVIV (Reuters) - Radvision (RVSN.O), an Israel-based maker of video network infrastructure, is banking on high definition technology to win market share from its two main competitors.

"This is an interesting time in the video conferencing market. Everything is moving to HD because it provides such a dramatically better experience than what was available before," Vice President of Enterprise Marketing Bob Romano told Reuters.

"The other main thing is a lot of big players are coming into this space, like Cisco, Microsoft and IBM."

Revenue for videoconferencing manufacturers grew by 30 percent in 2007 and by 20 percent last year to $1.8 billion.

Radvision Chief Financial Officer Adi Sfadia said infrastructure products account for 20 percent of the market.

This year growth in the market is expected to reach between 5 and 10 percent in spite of the recession.

"We find that videoconferencing projects are not being taken off the table," Romano said by phone from Orlando, Florida.

This is because companies are trying to save by cutting back on travel, increasing outsourcing and letting employees work from home. Videoconferencing makes all these easier, he said.

Radvision's main competitors are Tandberg (TAA.OL) of Norway, which has about 50 percent of the videoconferencing infrastructure market, and Polycom (PLCM.O) of the United States, which splits the remainder of the market with Radvision.

"We are very hopeful that our new product line will make us very competitive in the market place," Romano said. "We think we can take share from our competitors."

The company this week is unveiling in Orlando its new series of multipoint control units (MCU) for HD.

DESKTOP SOFTWARE

Radvision also builds two other elements. One is a video conferencing desktop platform that is all software, allowing desktops users to participate in a video conference with a webcam and Internet connection.

"We think we have market leadership in the desktop product," Romano said.

The third product is management software, which controls the network of distributed MCUs and desktop applications to better utilize bandwidth and make it more efficient.

The company does not build endpoints; for that it works with partners, the largest being Cisco Systems (CSCO.O), which represented 38 percent of Radvision's revenue last year.

It also partners with LifeSize Communications, a maker of HD videoconferencing units, while Aethra of Italy and Sony use Radvision's networking equipment.

Radvision also sells through resellers globally.

It announced this week a project with Samsung (005930.KS), the market leader in LCD panels. The two companies developed an LCD monitor with a built-in HD camera, speakers, microphone and hardware and software for videoconferencing.

It can act as a standalone videoconferencing device as well as a PC monitor.

While competitive products on the market cost $7,000-$8,000, Romano said Radvision's product will sell for a third of that.

Sfadia said the company was not changing its second quarter forecast calling for revenue of $19.5 million and earnings excluding special items of 7 cents per share.

Its shares closed at $7.67 on Nasdaq on Monday, after hitting a year high of $8.63 on June 4.

(Editing by Simon Jessop)