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Polycom Price Hike - Business As Usual?

Polycom Price Hike - Business As Usual? showing lady with graph and phone
Polycom are the 1st company to increase the price of their IP phone range following the pound devaluation after the Brexit vote. Is this the real explanation or are there some other causes?  How much will it cost us and can Polycom sustain it?
 
POLYCOM PRICE HIKE 1ST OCTOBER 2016
 
Polycom are one of the first companies to announce a price increase in their IP Phones. The wholesale price of the phones will increase on the 1st of October by 10%. Resellers are free to pass on the increase or absorb it. If the increase is passed on it will mean the following increase in prices:-

VVX300 phones recommended price will rise from £143.00 to £157.00 and the VVX400 phone will rise from £239.00 to £262.90.

Birchills Telecom are matching BT’s discounted prices and that means if BT go along with the increase then the costs will rise as follows:-
 
VVX300 Was £110.20 Will Be 121.22
VVX400 Was 153.40 Will  Be £168.74
VVX500 Was £220.80 will be £242.88

We have detailed reviews and videos on the VVX300 - here - the VVX 400 here and the VVX500 here.

WHO ARE POLYCOM?

Polycom are based in California and their phones are manufactured generally in Thailand and China. They see themselves as leaders in collaboration, employing just under 4,000 people worldwide with revenues of above £1bn.

They blame the price increase on the currency fluctuations post the Brexit announcement, but we wonder.

IS THIS DUE TO THE POLYCOM TAKEOVER?

It is fair to say that Polycom has not been a major financial success in the last few years. The latest quarterly earnings show a loss and the share price has been depressed. It came as no surprise to financial analysts when Mitel attempted a takeover in July - but they were outbid by Private-equity firm Siris Capital Group LLC in a $2.0 billion cash deal. Siris invests in technology companies with long term customer relationships.

Siris says that they:

 
Strengthen senior management and corporate governance
 
Drive consolidation and M&A strategy
 
Develop an expansion strategy to target new markets and introduce new products
 
Implement cost savings and restructuring initiatives.

If nothing else it is an "interesting time" for Polycom.  It is open to speculation if this price increase and the recent end of life of the Polycom Sound Point systems are the 1st fruits of the takeover or business as usual?

OR IS IT THE BREXIT DEVALUATION?

We are used to prices of IP phones dropping, alongside an increase in the feature set as the manufacturers scramble to compete. IP phones are very much more powerful than their analogue counterparts and have commanded a price premium accordingly. All of the phones are made abroad – usually in the far east and that is bound to have an effect on sterling pricing.
To maintain earnings in dollar terms we would expect prices to rise in the 10- 20% range, as Polycom is doing. We would then expect the continued decline in price and increase in power to continue as automation improves production. IP phones are predicted to be a growth market for the foreseeable future and it is an attractive niche for the phone producers. But, they do not yield the major revenues that PBX's used to and there is major competition.

WHAT TO DO?

The message for customers is clear – if you want a new system in the near future then buying it before more price hikes are announced is a great idea.

However, the message from Polycom is a lot less clear. Where are they going, and how will they get there? We can only watch and wait.
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