Executive Summary
- Network Convergence and Standardization: Pro AV is increasingly integrating with IT infrastructure through open standards like IPMX, shifting market value from hardware ports to network orchestration, lifecycle management, and interoperability.
- AI Integration vs. Component Constraints: While embedded edge AI enhances smart AV capabilities, massive data-center AI expansion has constrained memory supply (DRAM, NAND, HBM), increasing component cost volatility and supply chain risks for manufacturers.
- Shift to Recurring Service Models: Global geopolitical friction and tariff structures are making hardware-only sales less predictable, driving integrators toward managed services, continuous remote monitoring, and software-defined recurring revenue models.
Nearly a year ago, I argued that ten growth opportunities would define Pro AV: from AV over IP and broadcast convergence to intelligent surveillance, cloud signage, managed services, and emerging markets.
The direction was right. But the market has gotten less forgiving. Growth is still available. It's just not easy anymore.
The Network Story is Stronger
AV over IP has continued its move from alternative architecture to default assumption. Broadcast and Pro AV are converging too, as common, open standards get easier to deploy. The first formal IPMX certification wave, at ISE in February, covered 48 products from 11 manufacturers; a second event in August added 14 more from eight manufacturers. It's a slow process, but an important one. Certification reduces multi-vendor risk and gives customers a credible path away from proprietary lock-in.
The pixel explosion remains real across stadiums, control rooms, and large-scale LED. So does the move to multi-gigabit, 25/100/400GbE infrastructure. But bandwidth alone is no longer the differentiator. Operations make the difference. Customers are more vocal about topology visibility, audit trails, fleet management, and rapid recovery. If you can’t diagnose a network remotely, you have an expensive support problem.
Margin is migrating from ports and endpoints toward orchestration, support, and lifecycle services.
AI Became Both an Accelerator and a Constraint
Buyers will ask whether an AI feature cuts labor, improves utilization, or increases revenue. If the answer to one of those questions isn’t yes, it's not a business case.
Richard Jonker
Last year, AI was most visible in surveillance analytics. Now it reaches almost every opportunity. Cameras frame speakers automatically. Meeting-room agents take notes and manage audio zones. Signage adapts content using audience data. AI assists design, programming, and fault diagnosis. At InfoComm 2026, AI was moving from a cloud feature to an embedded agent capability at the edge.
That expands the addressable market for intelligent AV, but it also raises expectations. Buyers will ask whether an AI feature cuts labor, improves utilization, or increases revenue. If the answer to one of those questions isn’t yes, it's not a business case.
AI has also created a supply-side paradox. The data-center buildout is absorbing high-bandwidth memory and pushing manufacturers toward their most profitable, priciest products. Micron's fiscal second-quarter results, reported in March, showed revenue climbing from $8.05 billion to $23.86 billion year-on-year on strong demand and tight supply. Conventional DRAM and NAND buyers are competing for the same constrained output; SK Hynix said in January it had already sold out its entire 2026 HBM, DRAM, and NAND output.
For AV manufacturers, that means more volatile component costs, redesign pressure, and harder allocation decisions. For integrators, it means shorter quote validity, substitution risk, and a renewed premium on vendors with dependable supply. Intelligence at the edge will keep growing, but at a higher price than we anticipated.
Geopolitics Changed the Route to Growth
The case for emerging markets still stands, but "go global" is too blunt. India, Southeast Asia, the Middle East, and Latin America benefit from infrastructure investment and demand for immersive experiences. China remains important, but trade restrictions, localization requirements, and slower growth complicate the opportunity.
Tariffs also expose how misleading a country-of-origin label can be. Chips may be fabricated in Taiwan or Korea, packaged elsewhere, and assembled into devices in China, Mexico, or Southeast Asia. Duties at the final-product stage can alter competitiveness overnight. Add shipping disruptions, export controls, and currency volatility, and growth has to be judged against landed cost and supply resilience, instead of market-size figures.
Recurring Revenue Moved to the Center
Cloud signage, remote monitoring, advanced support, and managed services were separate opportunities a year ago. They're merging into one operating model. As AV real estate gets larger, more distributed, and more software-defined, customers need continuous management instead of occasional break-fix intervention.
This is where integrators can turn project revenue into contracted revenue, and where manufacturers, including NETGEAR AV, can build durable software and support economics. Ecosystem partnerships matter more too. Customers expect a single view across a mixed system, and that only happens with real interoperability.
So, what's still true? AV is becoming inseparable from the network. What changed? AI accelerated demand while tightening the component base, and geopolitics made execution more regional and more expensive.
The next year of growth will punish companies that merely sell more boxes. It will reward those that make complex, distributed AV systems open, observable, secure, and economical to run. That's a tougher opportunity than we described a year ago, but it's also a better, more sustainable business.
