Businesses snapping up IP phones

Increasing numbers of western European businesses are switching to voice over IP (VoIP) phone services but that doesn't mean IP telephone vendors are raking in loads more cash.

Though shipments of IP phones are on the rise, prices are falling, so the total value of the market is growing only marginally, says analyst house IDC.

In the first quarter of 2005, IP phone shipments moved up 17.9 per cent from the previous quarter to roughly 297,500. In the same time period, revenues for the European IP telephone market inched up just 2.9 per cent to $79.3m, according to IDC's Western European IP Telephone Tracker 1Q05.

IDC expects this trend of falling phone prices and rising numbers of units shipped to continue for the rest of the year.

Rogier Mol, senior IP telephony equipment analyst at IDC, said one reason IP phone prices are dropping is because the businesses deploying them are looking to cut costs and won't pay high prices.

Cisco is still the market leader for IP telephones in terms of both revenue and shipments, accounting for 52 per cent of the latter. Avaya is in second place with 12.6 per cent of shipments in the first quarter of the year.