Unified communications (UC) hardware was among the biggest winners of the pandemic. Demand surged as locked-down business users and students scrambled to stay productive and connected from their homes. But demand has since slumped.

However, the good news for the IT channel across Europe is that revenue growth is starting to pick up again. With users now seeking higher quality audio and video experiences from their equipment, Week 37 may come to be remembered as a turning point in the fortunes of the UC segment.

Country by country

For the past 8-10 weeks, all the major markets, and European panel, have been stuck below the CONTEXT's Revenue Trend Index baseline. This means that, week by week, revenue growth has not surpassed the weekly average revenue of 2021.

In Week 37, revenue growth in Italy was 37% year-on-year (YoY) - above that seen in other countries except Germany - thanks to strong sales of collaboration display systems through corporate resellers in all sales channels. However, Italy remains something of an outlier, with revenues flat in Germany (growing only 0.7% YoY) and down in Spain (-12%), Poland (-30%), France (-22%) and on the European panel (-16%).

In the year to date (YTD - that is, to Week 37), Spain is the only major market that has seen growth (3%) while, despite a -4% fall, Germany has gained three percentage points to overtake the UK where revenues have slumped -24%. In France, revenues are down -16% and YTD growth in Italy is still -26%. Poland is struggling with strong comparatives from 2022 and revenues have fallen -33%. In contrast, there has been significant revenue growth in Turkey (43% YoY and 27% compared to the same period in 2021) driven by strong sales of collaboration headsets from one vendor.

Retail-chain sales have surged in recent weeks: with revenues up 110% YoY in Week 37 and 75% in Q3 making this now the third-biggest channel after corporate resellers and small and medium resellers.

Hybrid is here to stay

Yet, despite the appearance of a continued slump in revenue growth, recent demand for UC products means sales in Week 37 were actually the highest since the beginning of the quarter. This could be a sign of longer-term improvement - especially for headsets, collaboration cameras and conference solutions, which are the three biggest UC categories, accounting for 69% of market value.

There are other reasons to be optimistic. Hybrid classrooms are growing in popularity and UC users know that the hybrid working model is here to stay. We hear that demand for higher quality collaborative video and audio experiences is growing so, in turn, increasing demand for premium products like 4D cameras and noise-cancelling headsets. Sales of all-in-one collaboration products are also growing as users look for more convenient ways to host video conferences and share presentations. Channel players are positive about the market opportunities this offers.

It is true that many companies are holding back on investment, due to strong economic headwinds, but there is money available for devices that can genuinely improve communication and collaboration between employees and customers. Sales may not hit the highs seen in the early months of the pandemic, but there are plenty of reasons to be optimistic about the future for UC.

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