Emerging markets drive PBX IP-PBX market growth in Q3 2014

The latest figures released by MZA have shown that PBX/Call Control extensions and licenses (excluding Micro PBX products) grew by 1% year-on-year in the calendar year Q3 2014 (July to Septmber 2014 inclusive), representing the first quarterly growth in the global market since Q4 2011.

In Q3 2014, overall growth was driven by solutions ?100 extensions/licenses which grew by 4% year-on-year, while solutions >100 extensions/licenses fell by 1% year-on-year.

However, volume growth was largely isolated to emerging and developing markets as the Western European and North American SME markets (solutions ?100 extensions/licenses) both fell by 8% year-on year emphasising the increasing impact of hosted multi-tenant solutions.

Global PBX/IP PBX Market - Q3 2014
The global rise in Q3 2014 was primarily driven by growth in Middle East and Africa, Latin America and Asia Pacific. The Middle East and African market witnessed a considerable 20% year-on-year growth, while Latin America achieved a 6% year-on- year growth. The global rise was aided by the Asia Pacific market which grew by 3% year-on-year, driven by some of the developing and emerging markets in the region.

In contrast, there were continued declines in the troubled Western and Eastern European markets, as both markets fell by 4% against Q3 2013. Moreover, North America continued to fall witnessing a 5% year-on-year decline. In Western Europe, the UK and German markets, which traditionally account for around 50% of volume sales in the region, drove the overall decline.
Avaya overhauled Cisco due to a resurgent performance in EMEA to gain the global market lead with a 13% market share. Cisco dropped to second position with a 12% share, down one percentage point. Panasonic climbed to third position from fourth in Q3 2013 to enter the global top three with an 11% share, up two percentage points.
NEC were in fourth position with a 10% share and Mitel were in fifth position with a 7% share. Mitel, following the acquisition of Aastra, has surpassed Mitel and Aastra combined for the first three quarters of 2014 against the first three quarters of 2013 in PBX extensions/licenses sold.

Panasonic maintained strong volume sales in SME markets in Q3 2014 and in the global ?100 licenses/extensions market (excluding Micro PBX products) it took an 18% share, up five percentage points year-on-year. Q3 2013 leader, NEC, fell to second position with a 13% share, down one percentage point year-on-year. Avaya outperformed the market and consolidated third position with a 12% share.

There was little change in the >100 extensions/licenses market in the quarter, with Cisco and Avaya posting relatively stable market shares of 22% and 14% respectively. Mitel claimed the global third position for the second consecutive quarter with an 8% share, closely followed by Microsoft in fourth position which matched Mitel's market share, and gained one percentage point year-on-year. NEC repeated its Q3 2013 market share performance in Q3 2014 and took a 7% share in fifth position.

World IP Extensions/Licenses Market
IP extensions/licenses grew by 2% year-on-year, marginally outperforming the total market. This marginal growth was driven by declines in the more IP-centric markets of North America and Western Europe, and as a consequence of these regional market declines and growth in TDM solutions in Middle East and Africa, Asia Pacific and Latin America, the global IP penetration rate (the percentage of IP extensions into total extensions to the desktop) remained at 45% and failed to rise for a second consecutive quarter. The penetration rate minimally fell in Latin America against Q3 2013, although Eastern Europe continued to have the lowest regional IP penetration rate at 29%. Cisco continued to lead the global IP extensions/licenses market with a 22% market share in Q3 2014 followed by Avaya, Mitel and Microsoft.

Global PBX/IP PBX Market - Rolling Year
Excluding Micro PBX products, over the rolling year (October 2013 to September 2014 inclusive) the world PBX/Call Control extensions and licenses market fell by 3% year-on-year, with the SME (solutions ?100 extensions/licenses) market and the enterprise (solutions >100 extensions/licenses) market falling by 2% and 4% year-on-year respectively.

The Q3 2014 figures portrayed a reasonably accurate picture of the long-term trends in the rolling year analysis published by MZA this quarter, as declines in the most developed regional markets of Western Europe and North America scuppered any chance of global growth. Moreover, the strong quarters in Latin America and Middle East and Africa, saw the two emerging regional markets increase their year-on-year growth to 4% and 1% year-on-year, over the rolling year respectively. Likewise developing Asia Pacific country markets drove the regional market into a 1% year-on- year growth over the rolling year, despite a volume decline in Japan.

Clear disparities in PBX/Call Control market volume performance have started to emerge between developed and emerging and developing markets. Solutions that require network infrastructure such as faster symmetric fibre optic networks are more readily available in developed markets. However, the greater upload broadband speeds have contributed to declines in developed markets, through hosted multi-tenant solutions and through virtualisation, which has had a secondary affect extending the average lifespan of the call controller through managed software upgrades. In contrast, poorer network infrastructure in emerging and undeveloped markets has inhibited the development of these technologies in the marketplace.

Exacerbating the decline in developed markets, most notably in the eurozone, is the continued economic stagnation in many developed economies. As a result, ICT investment has been affected by lower levels of business confidence in many markets.

Cisco retained its global lead in the PBX extensions/licenses market (excluding Micro PBX products) over the rolling year with a 12% share, down one percentage point year- on-year. Avaya remained in second position with a flat 12% share, while NEC remained third with a stable market share of 10%. Panasonic's continued volume growth in Q3 2014 saw the vendor strengthen in fourth position with a 9% share over the rolling year, up one percentage point. Mitel's merger with Aastra effective from Q1 2014 has enabled the vendor to claim fifth position over the rolling year with a market share of 7%. Moreover, market share for Mitel and Aastra combined was at 8% for the rolling year, with licenses/extensions volume up year-on-year.

Panasonic overhauled NEC to lead in the global ?100 extensions/licenses market (excluding Micro PBX products) over the rolling year, recording 15% market share, up two percentage points. NEC fell to second position with a stable 14% share, while Avaya remained flat over the rolling year repeating an 11% market share.

Over the rolling year, Cisco and Avaya continued to lead the global >100 extensions/licenses market, with market shares of 23% and 13% respectively. Mitel climbed to the number three position in the enterprise market with a 7% share, and accounted for 9% of the market when combined with Aastra shipments prior to the merger. Microsoft Lync increased traction in the enterprise voice market, with Microsoft's market share rising to 7%, up one percentage point.

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