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ALU Enterprise Revenues Up
Alcatel-Lucent's newly released fourth quarter and annual financial results revealed an increase in revenues and operating income for its Enterprise operating unit for FY2008. Although the absolute annual revenues increase was only 1.8% and 1.7%, respectively, based on Euros it was still a positive sign in a slumping global economy. Fourth quarter Enterprise revenues and operating income, however, were down slightly year-to-year, -0.4% and -1.3%, respectively, based on Euros.With three--Avaya, Siemens Enterprise Communications, Mitel Networks--of the major enterprise communications system suppliers currently operating as privately-owned companies, ALU financials are one of the few available accurate and precise tracking indicators that allow analysts to gauge the health of the market. Cisco and Nortel financials will be out soon and provide additional indicators, but one must remember to take into account the latter's current shaky corporate financial condition (Chapter 11 bankruptcy) when making evaluations. NEC's financial reporting structure makes it very difficult to assess its enterprise communications operation only, although overall enterprise CAPEX was trending down according to the latest quarterly report. ShoreTel's recently released financial report showed a positive revenues result (16% quarterly growth year-to-year), but the system supplier has too small a share of the overall market to use as a measurement gauge.
It is difficult to believe that the 2009 market for enterprise communications products and solutions will be positive, taking into account declining GNP data and rising job loss figures. The initial TEQConsult Group forecast for domestic enterprise-level (>40 line stations) communications system line station shipments is pessimistic, at least a 10% decline, based on a variety of factors. During the past 30 years market demand has always declined during domestic recessions, sometimes taking several years to return to pre-recession levels. I anticipate having system supplier 4Q08 shipment results available to me in time to finalize my upcoming presentation at VoiceCon to base my market forecast on the most current and accurate available data.