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IP PBX Sales Jump 23% As Businesses Turn To VoIP: Report

Worldwide revenues from IP private branch exchange (PBX) sales rose 23% last year at the expense of time division multiplexing (TDM) PBXs as enterprise telephony increasingly migrates to IP, according to a new report from Infonetics Research.

Although PBX revenues as a whole climbed 12% in 2005, to reach $8.1 billion, and will grow some 43% between 2005 and 2009 to reach $11.6 billion, TDM PBX revenues sagged 15%. Indeed, the fortunes of IP and TDM PBX sales are roughly inversely proportional, with revenues from sales of the former expected to soar 82% while TDM PBX revenues plunge 88%. A similar, but less dramatic dynamic was apparent in the last quarter of 2005, when IP PBX revenues climbed 3%, while TDM PBX revenues dropped 6%.

Despite their rising popularity, IP PBXs still represented a relative minority of overall revenues from PBX sales last year, with enterprises spending much more on hybrid systems. Revenues from sales of hybrid PBXs accounted for 65% of total PBX and key system revenues, with TDM PBXs representing 32% of revenues and pure IP PBXs 12%.

Overall, the PBX business is healthy, says Infonetics directing analyst Matthias Machowinski. "The PBX market came in at our expectations in 2005, and from a global perspective is doing very well," he said in a statement. "Worldwide revenue growth accelerated in 2005, although it's mostly coming from EMEA, Asia Pacific, and CALA. North America lost revenue share in 2005 as things slowed down here, showing just 4% revenue growth for the year."

Nortel leads the tight North American market in IP PBX line shipments, followed by Avaya and Cisco, while Avaya lead the European, Middle East and Africa (EMEA) market in the last quarter. EMEA, in fact, was a hot market for PBXs and key systems last year, representing 44% of total revenues, with 32% coming from North America.