I think the article that Dave references might have been a bit premature in its statement that desktop IP Phones will likely never see the same volume as they did in 2008. Its my belief we will see an across the board increase this year and next (assuming the economy continues to grow). this will be irrespective of video enabled devices as well USB devices. Keep in mind that late 2008 into 2009 saw a significant recession. All of the other comments for and against soft-phones, IP phones, mobile devices, and even TDM phones are interesting but the reality is that there are still a lot of people buying desktop devices and yes the fact that SIP phones are becoming more cost optimized will only increase the likelihood that phone sales will increase in the short term. Heck in some countries, TDM devices are being purchased with regularity. I believe the last number I saw globally was that only 20plus percent of companies had made the switch to a complete IP telephony implementation. That leaves an awful lot of desktops to be converted. It will be interesting to see the global numbers at the end of this year.

Very interesting interview. I would like to comment specifically on the 2nd question: "What are your general observations on the traction of IP desktop phones globally? Do you think IP desktop phones have reached the peak in 2008 and will start declining in the coming years?"

I believe this may be related to a NJ Feature I wrote "IP Phones Will Never Beat 2008 Record".

http://www.nojitter.com/showArticle.jhtml?articleID=218500131

That feature suggested the value proposition of the VoIP phone has not much changed in 30 years and as a result, organizations will buy less of them. I still believe this as an overall trend, but there are exceptions.

Cisco's phone sales are up, but Cisco is betting heavily on video and their new phones (2) include video cameras - new value prop.

Other vendors may opt to follow Microsoft and Digium down the path of skipping phones, let other vendors design, produce, stock, and distribute them. Both of these firms have tremendously benefited Polycom. That trend will likely expand and companies like Polycom will likely see phone sales grow.

Lastly, other organizations will opt for soft phones, existing phones, and cell phones. Tim Yankey directly responded by saying the CX300 phone is selling well.

The CX300 is not a phone. It is a "Phone-Like" device. A USB peripheral that offers a physical manifestation of the soft phone. It looks like a phone, rings like a phone, priced like a phone, but It relies on the PC to perform actual call processing. It isn’t confirmation phone sales are up, it’s the opposite!

I liked Yankey’s points against softphones and the Phone Like device is one alternative - another one is existing phones. This is being touted to many Nortel customers.

Towards the end of the interview, Frost and Sullivan adds this:

“While some might argue that IP desktop phones will never again reach the volumes they had prior to the economic downturn, Frost & Sullivan believes that IP desktop phones will continue to be the preferred telephony endpoint for the majority of business users, at least in the next four to five years. Although these devices will be increasingly complemented and even replaced by mobile phones and soft clients”

“Preferred” is the right word. The question is will budgets allow it. I think generally not, but as the article points out SIP phones are getting better and cheaper - so maybe. The final point about cell phones is right on target. See last month’s feature "Future of the Phone: Bring Your Own" http://www.nojitter.com/showArticle.jhtml?articleID=224701289&pgno=1

Dave

Recognize that the F&S growth forecast for IP phones takes into account the continuing decline of TDM instruments. That said, there is no indication that most station users are willing to give up a desktop telephone instrument for a softphone, only. The more likely replacement for the desktop phone is the mobile smartphone (complementing a desktop UC client).

PSTN still provides a quality of service that isn't consistently available via VOIP. Cell phones have made best-effort VOIP more acceptable in the business or for on-demand web-based collaboration.

Even so, the expectation of voice as a dedicated service combined with the concept of voice as an infrastructure-based utility show will make the desk phone hard to replace. After all, laptops have to be shut down, restarted, and manage multiple applications. Cell phones have a number of signal interference challenges based on location.

Yes, I think it goes to the same point as the larger PSTN--we wouldn't (in fact, we won't) build anything of comparable quality any more. But it's there now, so why ignore it in the name of "eating your own dog food" or whatever the buzz phrase of the moment is. Nobody's planning their future around the legacy voice networks, but it'd be foolish to pretend it didn't exist.

--Eric

I think the article that Dave references might have been a bit premature in its statement that desktop IP Phones will likely never see the same volume as they did in 2008. Its my belief we will see an across the board increase this year and next (assuming the economy continues to grow). this will be irrespective of video enabled devices as well USB devices. Keep in mind that late 2008 into 2009 saw a significant recession. All of the other comments for and against soft-phones, IP phones, mobile devices, and even TDM phones are interesting but the reality is that there are still a lot of people buying desktop devices and yes the fact that SIP phones are becoming more cost optimized will only increase the likelihood that phone sales will increase in the short term. Heck in some countries, TDM devices are being purchased with regularity. I believe the last number I saw globally was that only 20plus percent of companies had made the switch to a complete IP telephony implementation. That leaves an awful lot of desktops to be converted. It will be interesting to see the global numbers at the end of this year.

Very interesting interview. I would like to comment specifically on the 2nd question: "What are your general observations on the traction of IP desktop phones globally? Do you think IP desktop phones have reached the peak in 2008 and will start declining in the coming years?"

I believe this may be related to a NJ Feature I wrote "IP Phones Will Never Beat 2008 Record".

http://www.nojitter.com/showArticle.jhtml?articleID=218500131

That feature suggested the value proposition of the VoIP phone has not much changed in 30 years and as a result, organizations will buy less of them. I still believe this as an overall trend, but there are exceptions.

Cisco's phone sales are up, but Cisco is betting heavily on video and their new phones (2) include video cameras - new value prop.

Other vendors may opt to follow Microsoft and Digium down the path of skipping phones, let other vendors design, produce, stock, and distribute them. Both of these firms have tremendously benefited Polycom. That trend will likely expand and companies like Polycom will likely see phone sales grow.

Lastly, other organizations will opt for soft phones, existing phones, and cell phones. Tim Yankey directly responded by saying the CX300 phone is selling well.

The CX300 is not a phone. It is a "Phone-Like" device. A USB peripheral that offers a physical manifestation of the soft phone. It looks like a phone, rings like a phone, priced like a phone, but It relies on the PC to perform actual call processing. It isn’t confirmation phone sales are up, it’s the opposite!

I liked Yankey’s points against softphones and the Phone Like device is one alternative - another one is existing phones. This is being touted to many Nortel customers.

Towards the end of the interview, Frost and Sullivan adds this:

“While some might argue that IP desktop phones will never again reach the volumes they had prior to the economic downturn, Frost & Sullivan believes that IP desktop phones will continue to be the preferred telephony endpoint for the majority of business users, at least in the next four to five years. Although these devices will be increasingly complemented and even replaced by mobile phones and soft clients”

“Preferred” is the right word. The question is will budgets allow it. I think generally not, but as the article points out SIP phones are getting better and cheaper - so maybe. The final point about cell phones is right on target. See last month’s feature "Future of the Phone: Bring Your Own" http://www.nojitter.com/showArticle.jhtml?articleID=224701289&pgno=1

Dave

Recognize that the F&S growth forecast for IP phones takes into account the continuing decline of TDM instruments. That said, there is no indication that most station users are willing to give up a desktop telephone instrument for a softphone, only. The more likely replacement for the desktop phone is the mobile smartphone (complementing a desktop UC client).

PSTN still provides a quality of service that isn't consistently available via VOIP. Cell phones have made best-effort VOIP more acceptable in the business or for on-demand web-based collaboration.

Even so, the expectation of voice as a dedicated service combined with the concept of voice as an infrastructure-based utility show will make the desk phone hard to replace. After all, laptops have to be shut down, restarted, and manage multiple applications. Cell phones have a number of signal interference challenges based on location.

Yes, I think it goes to the same point as the larger PSTN--we wouldn't (in fact, we won't) build anything of comparable quality any more. But it's there now, so why ignore it in the name of "eating your own dog food" or whatever the buzz phrase of the moment is. Nobody's planning their future around the legacy voice networks, but it'd be foolish to pretend it didn't exist.

--Eric