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November 28, 2006

Infonetics Report Shows Strong Growth for VoIP/IMS and Enterprise Telephony Markets in 3Q06

By Patrick Barnard, TMCnet Assignment Editor

The carrier VoIP/IMS market and the enterprise telephony market made substantial gains in the third quarter of 2006, according to two reports recently published by the market research firm Infonetics.

According to the VoIP/IMS market report, “Service Provider Next Gen Voice and IMS Equipment,” worldwide service provider next generation voice and IMS equipment sales are up 4 percent sequentially and 26 percent year over year. The report predicts that the market will more than double between 2005 and 2009, from $2.5 billion to $5.8 billion.

“The service provider next gen voice market is robust and healthy, with none of the extravagance that led to the telecom crash of 2000-2002, pointing to a sustainable investment cycle,” said Infonetics Research principal analyst Stéphane Téral in a press release. “All segments but softswitches showed gains in the third quarter.”

“Some notable movers and shakers this quarter include Nortel, which recaptured its leadership position in the $2.8 billion media gateway and softswitch market; Cisco, which is making serious inroads into the media gateway market and is now second in the media gateway/softswitch market; and Sonus, which has a strong book of tier 1 customers and is considered by many the go-to manufacturer for pure- play,” Téral added.

The VoIP/IMS report finds that the media gateway segment is up 11 percent quarter-over-quarter and 45 percent year-over-year. Meanwhile, the session border controller segment grew 8 percent QoQ and up 102 percent YoY. The report also finds that as more traffic becomes IP, softswitches will increase their share at the expense of media gateways. In addition, it predicts that the number residential and SOHO VoIP subscribers worldwide will nearly double between 2005 to 2006 - to over 47 million subscribers.

The VoIP/IMS report shows Cisco had another big quarter for trunk media gateway sales, up 22 percent, to maintain the lead it grabbed from Sonus the previous quarter; that Nortel leads in worldwide softswitches; that Acme Packet (News - Alert) leads in the fast-growing session border controller (SBC) segment; that RadiSys is the worldwide leader for media servers; and that Broadsoft leads in voice application servers.

Looking at the enterprise VoIP market, Infonetics’ “Enterprise Telephony” report shows worldwide PBX (News - Alert)/KTS sales grew 5 percent sequentially to $2.3 billion, with annual sales expected to pass $10 billion mark in 2008. The report finds that the IP PBX segment (includes hybrid and pure IP PBX) is continuing top grow, with worldwide sales up 8 percent to $1.9 billion in the third quarter, led by the pure IP segment. The report predicts that IP PBX sales will continue to accelerate through 2009, when worldwide sales will reach $11.1 billion.

“The third quarter turned out to be a good one for most vendors, and a great quarter for Avaya, Siemens (News - Alert), and NEC,” said Infonetics Research analyst Matthias Machowinski. "The third calendar quarter is the end of the fiscal year for Avaya and Siemens, which helped both turn in a strong performance. NEC (News - Alert) has a high exposure to the Asia Pacific region, and benefited from a seasonally strong quarter there. But even vendors without those factors on their side turned in a decent performance, including Cisco, who had a blockbuster quarter last quarter and maintained its lead in the North American IP PBX market.”

The “Enterprise Telephony” report finds that the top IP PBX vendors in 3Q06 are Siemens, Avaya (News - Alert), Cisco, Nortel and Alcatel – in that order – and outlines market share differences in various regions. For example, Cisco, Avaya, Nortel, and NEC lead in North America; Siemens is in first place in EMEA, followed by Alcatel; and NEC has climbed into first place in the Asia Pacific, followed by Avaya. In addition the report finds that IP deskphones accounted for 97 percent of all 3Q06 IP phones shipped, with the remainder coming from softphones.

For more information visit www.infonetics.com.


Patrick Barnard is Associate Editor for TMCnet and a columnist covering the telecom industry. To see more of his articles, please visit Patrick Barnard’s columnist page.

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