Many people have been pondering the eventual success and usefulness of VOIP on the mass market, and along with that a lot of stock has been put in the earnings and potential earnings of the industry. Despite research that Infonetics Research recently published showing an 8% dip in VoIP equipment revenue in the first quarter of 2007, they reiterate that this does not reflect a downturn in demand or growth.
It’s being credited as a seasonal problem more than anything else, a standard decrease from the 4th quarter, which was very strong. According to Stephane Teral, “If you compare year-over-year, the market’s still growing and everything is going VoIP.â€While the overall effect was a downturn in equipment sales, certain kinds of equipment have actually increased sales. Session border controller sales increased by 10% and soft switches grew 9%. Leading the way in overall sales was Nortel, followed by Siemens and Sonus.The major drop in sales came as a result of what Tereal calls a migration process. The major companies have all recently finished up major projects and will soon be moving on to even more intensive work, hoping to shore up their capital and funding for full migration to IP. Businesses will likely be looking to move their entire phone operations to VOIP in ensuing years, but need to be sure of the funds needed to do so.
The current rate of growth for the VOIP industry is a healthy 14% and continues to do strong despite comments by some that it might be showing its age. Everyone agrees that the spending on infrastructure for VOIP networks will level off soon, the next generation of voice and IMS equipment will push the industry into the $7 billion range worldwide.
In truth, because of the fickle nature of economics, the growth they saw was good. If there was anything more substantial in sales increase, the result might be a market that no business could sustain. Slowing of sales for whatever reason then becomes a good thing.
What it all boils down to is an industry that experts don’t see fully maturing until well after 2010. It’s still in its infancy now, with businesses and people across the globe picking up equipment to even be capable of offering VOIP services. Compare it to trying to guess the future of the search engine industry in 1994 when people were just beginning to get on the internet and experience them. No one knew how long it would take for the technology and the market to mature. In the end, it was somewhere around 10 years.
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September 3rd, 2007 at 3:36 pm
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Thank you for your post!…