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PBI Media STUDY: SALES OF CORPORATE PHONE SYSTEMS DECLINE FOR FIRST TIME IN 7 YEARS End Users Hold Off On New System Purchases Due To Uncertainty Regarding The Impact Of Ip Telephony September 19, 2000 - PBX PARSIPPANY, NJ - September 19, 2000 - For the first time since 1993 the corporate phone system market - or Private Branch Exchange (PBX) market - has declined significantly. According to a report from PBI Media (www.thephillipsgroup.net), shipments of new corporate phone systems in the second quarter of 2000 dropped 16.2 percent from the same period in 1999. "This is remarkable given that the previous 5 years have seen quarterly growth rates typically in the 10 percent to 15 percent range," said Frank Stinson, senior product manager at PBI Media, the Parsippany, NJ-based global research and consulting firm. According to Stinson a number of factors appear to be behind this deterioration of market conditions. "Last year - 1999 -- was unusually strong due to Y2K-related upgrades and replacements," he said. "Because of the robust shipment activity in the 1997-1999 period, the installed base is also relatively new, not lending itself to system replacements. However, the single largest driver, is a growing uncertainty among end users regarding the future direction of the corporate phone system market." There appears to be a growing consensus among end users that the next phone system purchase, will either be an IP-PBX or have substantial IP telephony capabilities. Because of the pending shift to IP Telephony, end-users are increasingly reluctant to invest in traditional PBXs that may not offer this functionality. According to Stinson, there's also a feeling that many of the current IP solutions are still unproven. As a result, the IP-PBX market accounts for less than 4 percent of the overall market, despite a quarterly growth rate exceeding 50 percent." According to the report, the pending shift away from PBX to IP telephony is forcing traditional market leaders such as Avaya Communications (NYSE: AV), Nortel Networks (NYSE:NT), Siemens, Mitel (NYSE:MLT), and NEC (Nasdaq:NIPNY) to compete with new players, such as 3COM (NASDAQ: COMS), Cisco Systems (NASDAQ: CSCO), Vertical Networks, Shoreline Teleworks, and Artisoft (NASDAQ: ASFT). "IP Telephony will likely emerge as the industry's key growth driver over the next few years, but only when customers are convinced that suitable reliability has been established and that the solutions offer them appropriate levels of investment protection. For the time being, however, end users appear to be taking a wait and see approach toward both the traditional PBX and IP telephony markets," said Stinson. To obtain a copy of the study contact PBI Media at www.thephillipsgroup.net or 973-884-0100. PBI Media, a global professional services company with offices in Parsippany, NJ, London and Washington DC, specializes in market intelligence for the telecommunications and information technologies industries. In addition to conducting primary research studies, the company offers a comprehensive range of professional services, including custom consulting, InfoTracksm and TelecomTacticssm database products, professional conferences, market and competitive intelligence analyses and custom marketing programs. PBI Media is a division of Phillips International, Inc. (www.accessintel.com), a $350 million corporation headquartered in Potomac, Md., which offers a wide variety of quality publications and services for both consumer and business-to-business markets. Phillips is one of the leading publishers in America, with a fast-growing Internet business. |
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