IP Telephony Holds Strong in the Face of Unified Communications (UC) Hype, IDC Says

FRAMINGHAM, MA – July 14, 2008 – Despite escalating buzz and hype around the unified communications (UC) solutions from Microsoft and IBM, these solutions have had minimal impact on the growth of IP telephony lines, which recorded shipments of 30.9 million in 2007, a new study from IDC reveals.

"By the end of 2007, Microsoft and IBM shipped their first versions of unified communications solutions. So, IP telephony vendors no longer had to speculate about what effect the desktop-based collaborative environments with IP telephony would have," said Nora Freedman, a senior analyst in the Enterprise Networks group at IDC.

Cisco, Avaya, Nortel, and Siemens were the leading four vendors in the worldwide IP PBX market based on their market results for end-user revenue in 2007, IDC's report shows. In the IP PBX market, Cisco gained the most market share while Alcatel-Lucent lost the most market share relative to 2006. The other IP PBX vendors had nominal changes in market share year over year.

For IP phones, Cisco maintained its dominance in the market as the leading vendor in terms of both hardware desktop IP phone shipments and end-user revenue. As seen in the IP PBX market, Alcatel-Lucent suffered the greatest decline in year-over-year market share, based on end-user revenue for IP phones.

IDC's research reveals that some potential threats to the IP PBX market include desktop collaborative environments, open source IP PBX, and hosted VoIP services. UC Mobility solutions are the primary threat to desktop IP phones.

IDC recommends the following actions in these markets:

* For IP PBX vendors, IDC believes it will be crucial to solidify their relationship with Microsoft and IBM, putting further emphasis on communications expertise and solutions as well as building an ISV ecosystem to help software developers build applications on their telephony platform.

* For IP Phone vendors, it will be important to assess how the adoption of UC software clients may diminish the importance of the desktop phone. In addition, IDC recommends examining how IP Phone vendors can incorporate video conferencing capabilities and/or integrate with full-room telepresence solutions.

IDC's study, Worldwide IP PBX and Hardware Desktop IP Phones 2007 Vendor Shares, (IDC #212377) highlights the shipment and revenue market shares for enterprise IP PBX (pure and hybrid) systems, IP telephony lines/seats, and desktop hardware IP telephones for 2007.

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. For more than 44 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

All product and company names may be trademarks or registered trademarks of their respective holders.