by Mike Fisher, Associate Director –Education Division, Futuresource Consulting
Now the doors to the American AV tradeshow InfoComm 2016 have opened, the industry will be taking in the recent news of the acquisition of the interactive whiteboard manufacturer SMART by the world's largest electronics manufacturer Foxconn, which now owns a 66.67% stake in its business. This follows its recent purchase of Sharp Electronics a couple of months ago.
“Traditional Western based interactive whiteboard makers have come under severe pressure in recent years as market growth has slowed and users have increasingly invested in personal learning solutions such as computers, tablets and connectivity as opposed to ‘front of class’ tools” commented Mike Fisher, Associate Director Education Technology. “Early adopter markets, the US and UK have now slowed down with wider global uptake being slow in comparison. Whilst uptake in China is currently booming. China currently accounts for more than 50% of global market sales. The market is serviced by local providers so Western providers have been unable to effectively penetrate the leading global market”.
One of the commercial problems of traditional whiteboard technology is its longevity, with devices typically lasting upwards of 10 years, meaning a limited replacement market opportunity in comparison to many other hardware devices. In the rapid growth years of the early 2000s, SMART sold its whiteboards and software as one solution, with one upfront total fee. This model worked well, until the UK and US started to slow and SMART was unable to drive ongoing revenues from its loyal existing customer base. For a while complementary solutions to the whiteboard such as voting systems, visualisers and audio systems, offered substantial margin opportunities but these solutions then came under pressure from the multi-functional computing devices, especially tablets. SMART eventually sought to differentiate its software from the hardware offering with annual licenses for SMART Notebook but this move was arguably made too late, as users were not used to paying for display software.
SMART, despite its troubled history of late, undeniably has a strong brand in the education sector. This transaction with Foxconn provides access to significant resources, a plethora of partners, markets, technologies and finance that will enable SMART to put its troubles behind and prepare for significant growth. The implications of such an acquisition are huge when considering the various partners and technologies the firm already has access to beyond the world of professional AV. Specifically, in the AV space, Foxconn already owns Sharp and InFocus. The interactive display market is transitioning away from whiteboard technology to flat panel technology, 55% of educations sales in 2015 were flat panels. Sharp owns a 10th generation panel production factory and a combination of Sharp’s flat panel production expertise and pricing competiveness with SMART software, brand, huge classroom installed base and route to market promises to be a strong combination.
The Corporate Market – Forecasted to be a 2.6 billion $ opportunity in 2020
Whilst interactive display sales to the education sector are slowing, the corporate meeting room market remains a huge opportunity. In North America alone there are 5.5 million meeting rooms and existing penetration is negligible. To date, no provider has really been able to fully ‘crack’ this market, with the challenge of providing an interactive meeting tool to help drive collaboration that is simple enough for users to utilise infrequently without training. Teachers tend to use displays daily so are more likely to learn about usage then users in a typical corporate environment and this is proving a challenge. Microsoft has announced and is now shipping the Surface Hub solution targeting this exact challenge and expectation is that this product will drive awareness and opportunities for interactive display usage in meeting rooms.
Mike Fisher, Associate Director –Education Division has been with Futuresource Consulting for fifteen years, now leading the education team. Mike leads a team of researchers, analysing and consulting on key movements in the global EdTech industry. Futuresource services include detailed tracking of technology adoption within the education sector. Much of this work involves the provision of strategic direction for companies in understanding how the markets are performing, how they are evolving and how customer needs continue to develop and change over time.
With a wide range of executive level industry contacts and full visibility of vendor developments, Mike is able to add value to a whole host of blue chip clients in the education area. Mike is a regular speaker at international conferences. Mike holds a Bachelors of European Business from Nottingham Trent University.
Futuresource Consulting is a specialist research and knowledge-based consulting company, providing organisations with insight into professional display technologies, consumer electronics, digital imaging, entertainment media, broadcast, storage media, education technology and IT. With a heritage stretching back to the 1980s, the company delivers in-depth analysis and forecasts on a global scale, advising on strategic positioning, market trends, competitive forces and technological developments. www.futuresource-consulting.com