|
|
INFOTECH STUDY: YEAR 2000 BRINGS DRAMATIC SHIFT TO U.S. PBX MARKET - SHIPMENTS DOWN 10.7% DUE TO POST-Y2K SLUMP IN DEMAND AND IP-TELEPHONY RELATED UNCERTAINTY April 18, 2001 - PBX Market PARSIPPANY, NJ April 18, 2001 - The year 2000 brought a dramatic shift to the corporate phone systems - or Private Branch Exchange (PBX) market. According to a report from InfoTech (www.accessintel-infotech.com), U.S. shipments of PBX systems dropped 10.7 percent from the record levels seen in 1999. "This is a major shift from what we had come to expect over the previous 5 years where annual growth rates typically were in the 10 percent to 15 percent range," said Frank Stinson, senior product manager at InfoTech, research and consulting firm. According to Stinson a number of factors are driving this reversal. "The 1997-1999 period was unusually strong due to a confluence of several strong market demand drivers," he said. "Low interest rates and high corporate profits led to high levels of corporate capital investment, while Y2K compliance issues forced many end users to upgrade or replace their phone systems and applications." In the year 2000, however, each of the major growth factors from 1997-1999 became negative. Capital investment dropped dramatically due to reduced corporate profits and rising interest rates. More importantly, Y2K compliance issues were satisfied by the first quarter of 2000. Stinson added, "Most large end users upgraded their phone systems in the late 1990's to address Y2K compatibility issues. Because of this, the average age of PBX systems installed in the U.S. dropped to 2-3 years in 2000. Since this is a replacement market, and the installed life of a typical PBX is minimally 5-7 years, it is not hard to see why shipments dropped so rapidly in 2000." The emergence of IP Telephony as an alternative to traditional PBX technology has also had a major impact on end user purchase decisions. There appears to be a growing consensus that IP Telephony represents the future of corporate phone systems. However, many end users are not convinced that IP-PBXs currently provide the same features and reliability of traditional PBXs. "This uncertainty has put the market in a holding pattern. Many end users delayed purchasing a new PBX in 2000 because of fears that new IP Telephony solutions might obsolete their investment before the end of its useful life. However, there was also a feeling that many of the available IP Telephony solutions were still unproven," said Stinson. 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), who currently have a combined market share in excess of 90%, to compete with new players, such as 3COM (NASDAQ: COMS) and Cisco Systems (NASDAQ: CSCO), who were the top 2 players in the IP-PBX market in 2000. InfoTech is a subsidiary of PBI Media, specializing in global information and professional services for the telecommunications and data networking industries. InfoTech offers a comprehensive scope of information and professional services, including custom project consulting, market and competitive intelligence programs, tactical sales support tools, primary research studies, industry conferences and custom marketing programs. Further information about InfoTech can be obtained at the company's web site at www.accessintel-infotech.com. To purchase a copy, or learn more about this study, please contact InfoTech at www.accessintel-infotech.com or at 973-884-0100. |
|
