Allan Sulkin

Allan Sulkin | September 15, 2008 |


Mid-Year Voice System Market Update: Cisco Still #1

Mid-Year Voice System Market Update: Cisco Still #1 Cisco built on its market share lead, while the market as a whole felt the effects of the bad economy

Cisco built on its market share lead, while the market as a whole felt the effects of the bad economy

The mid-year results are in and Cisco Systems has proven that its meteoric rise, reaching first place among North American PBX market share leaders last year, was not a fluke. Less than a decade after buying Selsius Systems to enter the enterprise voice communications market, Cisco is proving to be more than a formidable competitor, as it is widening its line station shipment lead over Avaya, the perennial market leader reduced to runner-up status.

Cisco’s first half PBX line station shipments exceeded the Avaya total by more than 50%, 1.574 million compared to 0.978 million (see Figure 1). Last year’s first half data had Cisco holding a 15% lead over Avaya. Although Avaya had a strong first half, Cisco’s has proven to be much stronger. Cisco’s most recently released financial reporting data indicated that its Unified Communications revenues increased 51% on a year-to-year basis, an unprecedented result for a system supplier with a substantial revenue base.

This is especially impressive considering that the North American PBX market declined about 5% from the year earlier: estimated first half 2008 PBX line shipments were about 5 million compared to 5.25 million last year. Gloomy economic conditions have affected many customer purchasing plans, especially in the financial services and housing sectors. The rise in energy costs, the sub-prime mortgage market disaster and higher unemployment rate have placed a damper on enterprise communications market growth.

Coming in a distant third, and continuing its slide down the shipment ladder, is Nortel (an estimated 0.577 million), very closely followed by Mitel Networks (0.550 million).

The Cisco and Avaya data are based on detailed line station shipment reports provided to industry analysts. Nortel data is estimated based on system shipments, because the system supplier has not provided line station numbers for several years. Mitel data is based on line station reports including all customer premises equipment (CPE), including a small percent attributed to key/hybrid systems from the Inter-Tel acquisition.

Among other vendors, first half results for Siemens Enterprise Networks and NEC Unified approximated last year’s totals. Siemens’ line station shipments were estimated at 0.250 million and NEC’s at 0.235 million. Siemens’ numbers should begin to rise following the announcement that Gores Group has acquired majority ownership, and as its evolutionary OpenScape Unified Communications Server platform takes hold in the market.

NEC should also see better days, because it finally released its new Univerge platform: the small/medium line size 8100 and 8300 models, and the large system 8500 model. The latter offers a migration path for the large installed base of NEAX2400 customers, supporting installed common equipment carriers, port circuit cards, and digital telephone instruments.

ShoreTel , an industry upstart, had a good first half with line station shipments estimated at 0.135 million. Rounding out the top 10 are Aastra, estimated at 0.1 million, 3Com estimated at 0.075 million, and Alcatel-Lucent at slightly less than 0.05 million. Aastra received a significant boost over last year due to its acquisition of Ericsson’s enterprise networks group. 3Com’s results are based on a preponderance of small system shipments. Alcatel-Lucent’s North American shipments continue to be disappointing, considering its position as a global market leader.


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