Results were mixed in 2003 as IT investment stalled then recovered. The first two quarters of the year were adversely affected by the invasion in Iraq, SARS, and lower capital spending. However, a pronounced recovery occurred in the second half as IT investment regained its momentum.

Sales volumes grew 51.3% over first-half levels, with Q4 setting a new sales volume record for TANDBERG Americas.

The company’s focus on the Americas market in 2002 is paying off. In 2002, TANDBERG moved decisively to cover the Americas as a distinct world region. A second headquarters in New York City opened and account managers, sales engineers, and channel account managers were located closer to customers in key markets. In 2003, Brad Johnston was appointed to the critical role of president, TANDBERG Americas, following leadership roles at Cisco Systems and AT&T. The company also added regional offices in San Francisco, Chicago, and Toronto.

Execution in enterprise, public sector including federal, education and medical segments have shown strong results. Relative to product performance, the Americas realized significant growth in the network systems market, growing revenues from less than 1% in 2002 to almost 15% in 2003. The Americas also saw success in selling through the integration channel. The TANDBERG 6000 codec continued to be the room integrators codec of choice, showing steady growth throughout the year.

Customer deployments in 2003 in North America and Canada included Harley-Davidson, Yuba City Fire Department, Maple Leaf Foods, Fairmont Hotels, and Boeing.

Strong partnerships are opening new markets. The rate at which North American enterprises are hosting business-critical applications on IP networks has developed faster than anticipated. In both business and government, voice and visual communications are rapidly converging along intelligent IP backbones. The Americas channel mix is represented by national and regional partners with expertise in converged IP and video solutions. These partners include major telecoms such as AT&T, Verizon, and SBC as well as regional IP networking partners. The Americas channel strategy began paying off in 2003 with higher sales volumes, more partner engagements, and expanding distribution. Revenues from channel partners grew 20% in FY03 over FY02 levels. This growth was a result of moving TANDBERG direct business through selected distribution partners.

Sales in Latin America grew by 50% over 2002. TANDBERG continued to invest in the Latin American market. During 2003, the company expanded coverage in Latin America through key hires in Sao Paulo, Brazil, and Mexico City. TANDBERG also hired a regional director for Latin America who operates this growing region from Miami, Florida. New customers in Latin America included Volkswagen and the Chilean Armed Forces.