February 28, 2008 18:29 ET

Infonetics Research: Enterprise telephony market tops $9.6 billion in 2007, IP phone shipments up 29%

BOSTON, MA--(Marketwire - February 28, 2008) - The enterprise telephony market grew 6% between 2006 and 2007, to $9.6 billion, according to Infonetics Research's latest "Enterprise Telephony" report. The market was buoyed by strong IP PBX systems equipment sales, and dragged down by TDM PBX/KTS equipment sales.

For the quarter, the overall market is down 7% from 3Q07 to 4Q07, as it followed a typically high third quarter (many vendors have their fiscal year-end in the third quarter), the report shows.

"2007 ended up being a good year overall for the PBX market, despite rapidly declining sales of TDM systems, which were down over 20%," said Matthias Machowinski, directing analyst for enterprise voice and data at Infonetics Research. "We continue to witness the migration to IP PBXs, but new in 2007 was evidence that end-users are benefiting from IP in a direct and meaningful way. Until now, most of the benefits have gone to the network manager, such as IP trunking -- things the user couldn't care less about. But this is starting to change, slowly but surely. For example, shipments of softphones were up 55% to 385,000 last year. These are the users that get to directly experience what's new and different with IP communications, by taking their office phone with them."

Other highlights from the report:

--  Worldwide IP deskphone and softphone shipments are up 29% in 2007 from
    2006
--  The top 5 PBX/KTS system vendors account for 3/4 of total market
    revenue: Avaya, Cisco, Nortel, Siemens, and Alcatel-Lucent (in that order);
    Cisco was the only one of these with a meaningful increase in market share,
    and jumped from 5th to 2nd in 2007
--  Sales of TDM systems managed to stay above the $1 billion mark in
    2007, likely for the last time
--  Hybrid IP PBX systems account for 2/3 of all lines shipped in 2007;
    pure IP systems account for 18%
--  The North American market had the weakest overall line growth in 2007;
    CALA had the strongest line growth, Asia Pacific the second strongest
    

Infonetics' forecasts of 2007 PBX/KTS line and revenue growth, made a year ago, were within 2% of actual results.

Infonetics' report provides worldwide and regional forecasts and market size for TDM PBX/KTS systems, IP PBX systems with hybrid and pure IP splits, IP PBX by system size, VoIP gateways, and IP deskphones and softphones. Companies tracked include 3Com, AudioCodes, Alcatel-Lucent, Avaya, Cisco, Dialogic, Mitel, NEC, Nortel, Quintum, Samsung, ShoreTel, Siemens, Tadiran, Toshiba, Vertical, and others. Market share pivot tables are included.

Download report highlights by logging in to Infonetics' online portal from www.infonetics.com (see Enterprise Voice area). For sales, contact Larry Howard, vice president, at larry@infonetics.com or +1 (408) 583-3335.

Infonetics Research (www.infonetics.com) is an international market research and consulting firm specializing in telecom and data networking. Services include market share and forecasting, end-user survey research, service provider survey research, and service provider capex analysis.