IP PBX Sales Surged in 2004: Report

Sales make up more than half of the total $6.1 billion PBX/KTS market; growth is expected to accelerate.

March 3, 2005

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The worldwide public branch exchange (PBX) and key telephone system (KTS) market experienced vigorous growth last year, driven by sales of IP PBXs, according to new numbers from Infonetics Research.

In its Enterprise Telephony quarterly worldwide market share and forecast report, Infonetics found that revenues from the PBX/KTS market reached $6.1 billion, an 11% jump over 2003's level of 5.5% billion. The growth was even more impressive in terms of PBX/KTS lines shipped, which were up 19% over 2003, reaching 26.6 million units worldwide last year. Infonetics expects the growth trend to continue, with revenues reaching $9.1 billion by 2008, a five-year compound annual growth rate of 10%.

IP PBXs account for much of this growth. Some 54% of the line shipments were hybrid PBXs, systems that combine traditional functionality with IP features. Infonetics expects the hybrid PBX share to rise to 70% of all PBX shipments by 2008. Though they made up only 10% of shipments in 2004, Infonetics predicts that sales of pure IP PBXs will increase, accounting for 20% of line shipments by 2008.

Infonetics' directing analyst for enterprise voice and data Matthias Machowinski, said 2004 was a great year for PBXs. "Not only is the overall market growing at larger than expected rates, but the IP PBX segment is growing ferociously, with 50%-plus growth between 2003 and 2004," he said in a statement. "Successful vendors are recognizing the shifts in the market and have moved their products from TDM into the IP realm. The TDM segment, which one year ago still accounted for half the market, is now less than a third."

Nortel was the 2004 market leader in total PBX/KYS system lines shipped, while Alcatel consolidated its position as the dominant supplier of hybrid and pure IP PBX/KTS systems.

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