Hmmm... I'm not an analyst, but I do have some knowledge of the AV industry and of what Audinate is trying to achieve.
I see strong echoes in the AV industry of what happened 15-25 years ago in the telecommunications industry. IP networks rapidly replaced 64kbps (or multiples thereof) circuit switched networks. Intelligence moved out of the network core and into the endpoints. High-level protocols were developed to transport phone calls over the IP networks. Companies like Cisco moved to positions of dominance, while others (who failed to pivot towards IP-dominated architectures) fell away.
As IP networks have grown in bandwidth, ubiquity and reliability, they have come to be seen as the underpinnings for distributed AV solutions. Smart audio (and video) matrix switches and dumb (pure-analogue) endpoints have been gradually superseded by IP networks and smart endpoints.
This transition began with audio - because it uses less bandwidth and could be more easily accommodated on developing IP networks. Dante (now Dante Audio) emerged as the protocol of choice to allow different manufacturers' products to talk to each other reliably and repeatably. Compared to some other protocols, Dante required less of the IP infrastructure (doesn't have heavy technical pre-requisites), and Audinate paved the way (with chipsets, software tools, etc.) to make it relatively easy for manufacturers (many of whom had little digital audio networking depth) to adopt the technololgy. The race is over for real-time audio-over-IP interoperability. Dante won.
Video is maybe ten years behind audio in terms of adoption of standards and development of interoperability. Why? It needs orders of magnitude more bandwidth than audio - so networks needed to be ready. And the boom in corporate AV (started before COVID 19, but massively stimulated by COVID 19) had not yet reached maturity.
Connecting AV things together into workable board room, training room, content creation/distribution, media storage, etc. systems is an installer's nightmare. Protocols developed for residential markets (HDMI, for example) create havoc due to failed handshakes and general incompatibilities. There are dozens of proprietary solutions - but these are largely IP networking interface products that connect different manufacturers' relatively dumb sources and sinks (cameras, displays, storage systems, audio systems, microphones, speakers, etc.) together ... but only when same-brand interface devices are used. This HELPS to build an AV system that uses IP to transport signals. But it is FAR from the end-game: the ability for different manufacturers' AV end-points to connect directly to each other using a stable and reliable protocol. This is the opportunity for Dante AV.
There are some competitors.
The SDVoE Alliance supports some protocols and products that deliver great video performance. But the technology is based around expensive and not-yet-widely-deployed 10Gbps Ethernet networks. They've been running for years and fifteen companies have adopted.
HDBaseT is a very widely-adopted protocol for hard-wired point-to-point AV distribution. Back in 2017, the creators announced that they were planning to launch HDBaseT-IP - providing a connectivity solution over IP networks. This seems to have died since - no products have been released, and the HDBaseT Alliance's web site has no recent information.
And there are some advanced protocols from the broadcast industry that work well but are overly complex, heavy and expensive for corporate AV applications.
Dante-AV is well positioned to become the protocol-of-choice to be built into AV end-points and deliver simplified interoperability for system designers and installers. This week, at the AV Industry's biggest event of the year (ISE trade show in Barcelona: 100,000 people attending, over 1,300 manufacturers on the show floor - a truly mind-blowing event that I am missing for the first time in more than ten years), Audinate has announced that they've signed on 50 companies for Dante AV. My read is that that's three times more than the nearest competing protocol (SDVoE). I expect this number to grow quickly - more than steadily. Look at the historical growth in Dante Audio adoption (number of manufacturers, number of installed end-points), and then think about the fact that the number of VIDEO or AUDIO+VIDEO devices in corporate AV applications may be an order of magnitude higher than the number of AUDIO-only devices.
I'm not associated with Audinate (or in fact any AV manufacturer), and I may be very wrong (DYOR, as ever), but the way I look at the situation is this:
- Dante AV is in the best place (of all protocols and infrastructures) to facilitate AV connectivity in the corporate world
- the opportunity space (number of devices to connect) is probably an order of magnitude higher than audio-only devices
- the company is trusted by manufacturers, system designers, etc. to deliver reliable and usable technology.
IMHO, Macquarie fails to recognise the immaturity of the AV interoperability market. There's more at play here than macro-economic factors and upgrade cycles. Imagine what this company might look like if it can replicate in the much-larger AV opportunity space what it has already achieved in the audio-only application space.
(20min delay)