BOSTON, MASSACHUSETTS, 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.

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 report highlights:

• 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 at www.infonetics.com [1]. For sales, contact Larry Howard, vice president, at larry@infonetics.com [2] or +1 (408) 583-3335.

Infonetics Research (www.infonetics.com [3]) is an international market research and consulting firm specializing in data networking and telecom. Services include market share and forecasting, end-user survey research, service provider survey research and capex analysis.