One in Four New Telephony Lines Shipped in Asia/Pacific are IP

IDC:, the Asia/Pacific (excluding Japan) enterprise telephony equipment market is still highly fragmented in 3Q 2005, but some vendors including Avaya, NEC, Nortel and Samsung are emerging as the leaders in the region. The overall enterprise telephony equipment market in APEJ has grown 8% in Q3 2005 compared to 2Q 2005 in terms of revenues. This increase was mainly attributed to the 16% quarter-over-quarter growth in the IP telephony equipment segment. Comparatively, the traditional telephony segment’s contribution was not that large with only 4% growth sequentially in 3Q 2005. The migration to IP continued with 3Q 2005 sales of IP telephony equipment again overtaking sales of traditional telephony in Australia, New Zealand and Singapore at 58% IP versus 42% Time Division Multiplexing (TDM) in all 3 countries. In the overall Asia/Pacific region, one out of every four telephony lines shipped were IP.

The Asia/Pacific business environment is very challenging for enterprise telephony vendors because of the cultural diversity and the large percentage of small sized businesses in the region (89% of businesses in the region have less than 100 employees, excluding businesses of 1 to 4 employees). Despite the high growth rate for IP telephony equipment, migrating these businesses to IP will be complex, not only in terms of channel strategy, but also because finding the right value/price combination for each market will require meticulous fine tuning,.

In terms of growth, the countries that experienced the strongest uptake of IP in 3Q 2005 were Australia, Malaysia, New Zealand and Taiwan. Indonesia was surprisingly very close to reaching over 50% of IP revenues compared to traditional telephony equipment. This was due to the strong contact centre business in Indonesia that spurred large growth in terms of IP lines. In 3Q 2005, the largest markets in the region for overall enterprise telephony equipment in terms of revenues were Australia, China, India and Taiwan.

Avaya was the leader in the IP telephony equipment market in 3Q 2005 with 27% market share in terms of revenues, followed by Cisco, Nortel and Alcatel. Avaya’s lead came from major customer wins in Australia, Hong Kong, India and Thailand . Cisco kept the second place in the overall Asia/Pacific (excluding Japan) IP telephony market for 3Q 2005. Its main wins were in Australia, India and Malaysia. In the IP Phones market in 3Q 2005, Cisco was in the number one spot, followed closely by Avaya. These two vendors’ combined market share is almost 50% of the total IP Phone market.

In 3Q 2005, revenues of IP lines from Hybrid IP Private Branch exchanges (PBXs) - represented 26% of the IP PBX market and grew faster than the Pure IP PBX market. The leader in this market was Nortel, followed by NEC and Siemens. Samsung and Nortel had the strongest growth this quarter, with Nortel growing over 50% for the quarter.

Asia/Pacific Quarterly Enterprise Telephony Equipment Tracker Publ 20040124