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NewsGlobe: Currents
Infonetics: VoIP Equipment Revenue Declines in Q1 07
Year-Over-Year Growth Continues at Double-Digit Pace
by Jim Barthold
While research compiled by Infonetics Research showed that Q1 07 revenue
for next-generation VoIP equipment slipped 8% from the last quarter of
2006, the decline is no cause for alarm, the research report’s author said.
“This is a seasonal effect more than anything else,” said Stephane Teral,
principal analyst at Infonetics Research. “A lot of people expected that
the first quarter wouldn’t be that great. The fourth quarter was very
robust so we expected some kind of slowdown.”
Overall, he said, VoIP equipment growth continues to move along nicely:
“If you compare year-over-year, the market’s still growing and
everything is going VoIP.”
Not all equipment revenue was down in the quarter, he added. Session
border controllers (SBCs) showed a 10% uptick and softswitches were
up nine percent. The market, however, was dragged down by media
gateways, which came in at minus 24%. The combined media gateway
and softswitch market totaled US $717.3 million in the quarter led by
Nortel, Siemens and Sonus. Huawei, Infonetics said, came in fourth
replacing Cisco which dropped to fifth.
The media gateway decline happened partially “because some of the big
guys have completed major projects over the last year” and are
budgeting for their next steps, Teral said, using Time Warner Cable as a
bellwether company. “They have completed a major project and they are
increasing cap ex to make sure they have enough funding to continue
their migration to IP.”
Overall, he said, the VoIP market is showing its age a little bit but still
growing at a respectable 14% year-over-year rate.
“That’s very significant. If it was up only five percent then we would say
that’s pretty dismal, but it’s not dismal,” he said.
Even while VoIP infrastructure spending levels out over the next three
years, new spending will occur for on next-gen voice and IMS-based
equipment, he said, and should reach about US$6.9 billion worldwide by
2010 with about a half billion of that coming from IMS core equipment,
including HSS and CSCF servers.
“The IMS core is not adding that much at this point,” he said. “There is
no big worry about the market based on the first quarter. You’ll see ups
and downs with this but usually the first quarter is weak.”
To the contrary, Teral said, too much growth could have been a bad
sign.
“We can grow 14% year-over-year but had we had plus 14% form the
last quarter I would actually worry because this could become
unsustainable very quickly based on the economic theories we are trying
to apply,” he said. “To me it looks like we’re on the right path. It was
actually good to cool off a bit during the first quarter.”
Even with all the new next generation equipment and IMS, Teral said he
doesn’t expect the market to mature even in the 2010 time frame.
“When I look at my curve, I don’t really have a plateau … because there
is always new stuff coming in,” he said.
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