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Frost & Sullivan: SIP Phones Still Poised for Growth

The SIP phone market has changed considerably over the last few years, driven by technology innovation, competition, the economy, and changing customer demands. But unlike many analysts who think the IP desktop phone market's days are numbered, my colleague Alaa Saayed believes the devices will enjoy double-digit unit growth figures for at least the next four to five years: He estimates that SIP phone shipments will more than double by 2015, reaching around 4.7 million in units sold around the world.

Declining prices will have a lot to do with this growth, but so will the productivity gains enabled by technological advancements that increase the overall value of the devices from leading manufacturers. Although the line between proprietary versus open standards can often be gray, we define SIP phones as devices that adhere to IETF specifications (with little or no proprietary enhancements) and which should naturally integrate with solutions from the majority of telephony providers.

All regions are doing well in terms of SIP phone adoption, but here are some specifics:

* The adoption of SIP phones has been especially strong in North America, thanks to robust VoIP adoption and the use of SIP phones as part of broader UC deployments. Indeed, we expect SIP phone use to grow as Microsoft Lync matures, and deployments of it become more pervasive.

* In Europe, where the market is more conservative (except for in the Nordic region), we see strong signals of SIP phone adoption, especially among SMBs. While customers tend to prefer whole solutions from larger, better-known vendors, price considerations are opening the door for smaller SIP phone vendors to sell their solutions, and more Tier-1 carriers in Europe are beginning to offer SIP-based bundled services.

* Most of the well-established, independent SIP phone vendors in APAC identify strong competition from local vendors, as well as special regulatory constraints, as obstacles to better market penetration. Establishing good relationships with leading service providers will be key to developing momentum in this region.

* Although growth continues in CALA, some countries (including Brazil and Argentina) prefer local equipment manufacturing over imported goods, which is pushing some of the large SIP phone vendors to manufacture locally in these countries.