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NEC Unified Doing Fine

Most of the talk last week was about the Avaya "stalking horse" bid for Nortel ES, but there are other competitors in the market. Jeff Kane, President, NEC Unified Solutions, recently distributed via email an update on his organization's activities to industry influencers (analysts and consultants). It appears that NEC is having a pretty good year despite the economic conditions. Among the highlights he shared are the following:* Much of the activity has been around the enterprise switch migration path for existing NEAX2400 customers allowing replacement of the main processing and core software elements while maintaining their physical plant and re-using desktop telephones and other communications devices;.

* There was growth of about 35% in the mid-systems market compared to Q4;

* SMB system shipments grew 15% QoQ with sales of attached UC solutions continuing to grow;

* UNIVERGE Sphericall for Hospitality was launched to provide a pure IP solution based on the Sphericall platform designed to satisfy the needs of mid-size hotels. It comes ready to deploy with a PMS integration, SIP devices and analog gateways. NEC's initial feedback from the recent HITEC show was very positive.

Kane also noted that parent NEC Corporation has allocated more than $100 million to fund leases (and other business activities) for the enterprise unit's business the U.S. market. Using this money, NEC Financial Services have structured a number of strategic leasing programs designed to minimize capital expenditures, assist customers with their cash flow, and even fund "0% Interest" lease programs.

According to the data, NEC and Mitel both closed the gap with Nortel for total North American CPE line station shipments during the first quarter of this year. Second quarter results will be distributed soon (and I will have an update article on No Jitter), but Kane's letter provides strong indicators that NEC has a good chance to leap ahead of Nortel for the first half of the year. NEC would then rank behind only Cisco and Avaya in North America, its highest ever ranking since I have been tracking the market these past thirty years. Mitel, too, could move past Nortel with a good quarter, the first time ever it would overtake its Canadian neighbor since it entered the market in the 1970s.

Although recent statements from Nortel have been spun about customer loyalty and retention, it would be difficult to imagine that product shipments have not continued to dovetail from last year. Nortel's place in the market leader rankings is coming to an end, because it is likely that a competitor, such as Avaya or Siemens, will win the auction process for the enterprise unit and take them off the leader board as an independent supplier. If all goes according to plan, the fate of the Nortel enterprise business will be decided in September.