In Q4 2008 the global PBX/IP PBX market held up well despite the credit crunch, but Q1 2009 (period January to March 2009 inclusive) tells a different story, according to industry research house MZA.

During Q1 2009 the world PBX/IP PBX market took a nose-dive as the economic chill was felt across all size sectors and global regions, reports MZA in its latest Global PBX/IP PBX market report. Worldwide sales of PBX and IP PBX extensions (excluding Micro PBX products) declined by 30 per cent in this period compared to the same period in 2008. In total, just under 11 million extensions were supplied, compared to a volume of more than 15 million extensions in Q1 2008. MZA notes that many vendors are upbeat about the prospects for Q2 2009, however the research house says that for the remainder of 2009 the market is unlikely to match shipping volumes recorded in the early quarters of 2008.

MZA's latest global report highlights that no region escaped the knock-on effects of declining customer confidence and challenges obtaining finance. Eastern Europe recorded the heaviest decline, with volumes in Q1 2009 down more than 50 per cent compared to Q1 2008. This was in part influenced by poor performances in Russia and Ukraine. The Latin American, North American and Middle East and African markets also declined by more than 30 per cent.

MZA points out that APAC and Western Europe faired slightly better with declines of 26 per cent and 23 per cent respectively. Within Western Europe the UK, which is one of the markets that is most heavily reliant on two-tier distribution for PBX, dropped by 37 per cent and was by far the worst performing market of the Big Three, namely Germany, France and the UK.

In terms of segmentation, as had been anticipated, in Q4 2008 the largest impact of the economy was felt in segments addressing less than 100 extensions, with the above 100 extension segment being relatively unscathed. This reflected the much shorter sales cycle in the SME segment and the immediate effects as indirect distribution channels quickly addressed declining new business, high stock levels and looked to reduce inventory. The longer sales cycle in the enterprise segment has meant that the full impact of the economic turmoil which raised its head in earnest early in Q4 2008 had been delayed until Q1 2009 and is likely to continue to impact through 2009.

MZA stated that in Q1 2009 the greatest declines were still witnessed within segments addressing less than 100 extensions, but notably a decline of more than 25 per cent was also witnessed in the segments addressing more than 100 extensions, when compared with Q1 2008.

Overall, the IP extensions market shrank by 15 per cent compared to Q1 2008 as all regions recorded declines. The below 100 extensions market only decreased by nine per cent, while the above 100 extensions segments declined by 17 per cent. Despite the overall volume decline, IP desktop penetration into total extension numbers continued to increase, with penetration of IP desktop reaching 26 per cent in Q1 2009 compared with 22 per cent in Q1 2008. North America still leads IP desktop penetration, followed by Western Europe.

MZA reports that all of the top ten global PBX/IP PBX vendors suffered declines in shipments during Q1 2009 of between 20-50 per cent compared with Q1 2008. Cisco's performance faired better than many of the leading vendors, retaining the top spot in terms of total extensions shipped in Q1 2009 (first attained at a global level in Q4 2008). Cisco's business remains more weighted to larger installations so dramatic declines in the less than 100 extension space did not impact its business as greatly as some of its competitors more reliant on this segment.

NEC reclaimed second position in Q1 2009, followed by Avaya in third position. Siemens, Panasonic and Alcatel-Lucent claimed fourth, fifth and sixth positions in terms of total extensions shipped in Q1 2009. Panasonic, which had attained global market leadership in the first three quarters of 2008 (and whose business is weighted by strong SME business) was adversely affected as historically strong market volumes in Eastern Europe and Middle East and Africa dropped significantly in Q1 2009.

Both Siemens and Alcatel-Lucent, despite claiming the number one and two spots in EMEA, have weaker positions in North America and so struggle to gain a top three position at a global level.

When evaluating specific vendor positions for IP desktop extensions, MZA says Cisco's global market leadership continues, but the dynamics for number two and three spots change, with Avaya claiming the second position and Mitel third in Q1 2009.
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