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VoIP Chip Market Set To Skyrocket

The voice over IP (VoIP) integrated circuit market is poised for explosive growth, with In-Stat forecasting a 680% increase in revenue over the next five years, driven largely by the integration of VoIP features in mobile phones.

In "Hearing the Call of Cellular: VoIP IC Market Analysis," In-Stat predicts that VoIP IC market revenues will rise from $137.6 million last year to $938.4 million in 2008 as mobile telephone vendors and carriers introduce cellular phones with additional VoIP over wireless LAN capabilities. The report expects these dual-mode phones to begin to enter the mainstream market by next year, with adoption rates taking off in 2007.

Indeed, In-Stat expects virtually all cell phones to come with integrated Wi-Fi features by 2008, in much the same way that handset manufacturers integrated digital camera functionality. "In-Stat believes that Voice over Internet Protocol (VoIP) is the future of voice communications," In-Stat analyst Sam Lucero said in a statement. "And while stationary VoIP deployments have been the first to gain traction in the market, mobile VoIP actually represents the greater market opportunity for VoIP silicon and equipment vendors."

The report also notes that, despite the efforts of "several dozen vendors," the VoIP IC market is dominated by a relatively small number of manufacturers who supply the vast majority of chips. According to In-Stat, Texas Instruments is the clearly dominant player, particularly in the IP phone IC and CPE VoIP Gateway IC segments.