Despite Avaya's acquiring the assets of Nortel, Cisco and Avaya appear to be battling it out in the telephony equipment market with both closely tied for revenue market share.

"We expected the acquisition of Nortel's enterprise assets to put Avaya in the clear lead for overall PBX equipment market share leadership, said Matthias Machowinski, directing analyst for Enterprise Voice and Data at Infonetics Research. "And while Avaya did receive a nice bump this quarter, softness in the acquired Nortel business combined with strong results by Cisco meant that Cisco and Avaya essentially tied for revenue market share, although Avaya is ahead in terms of line shipments," he said. "This unfolding battle will be interesting to watch over the coming quarter, as both companies bring certain strengths and weaknesses to the table."

First Quarter Market Highlights

• Cisco maintains its lead in the overall enterprise telephony market in 1Q10, but only by a hair over Avaya, which saw a 25 percent quarterly jump in PBX revenue after absorbing Nortel's enterprise solutions business.
• Manufacturer revenue from PBX and KTS system equipment hit $2.0 billion in 1Q10, a 4 percent sequential dip
• Despite the quarterly decline, the enterprise telephony market continues to grow from the lows set in the first half of 2009, and is up 7 percent year-over-year from the first quarter of 2009
• The North American PBX equipment market posted the highest year-over-year (1Q09 to 1Q10) growth among all regions
• IP phones continue to recover from their 1Q09 low point, up 32 percent year-over-year to 3.9 million phones shipped in 1Q10
• Sales of unified communication (UC) applications are temporarily down due to expired promotions
• The UC market, led by Cisco and Avaya, is expected to resume growth in 2010
• Both vendors posted their strongest PBX revenue standings since the end of 2008

Report Synopsis

The Infonetics (http://twitter.com/infonetics) quarterly Enterprise Unified Communication, VoIP, and TDM Equipment report provides worldwide and regional market size, market share, analysis, and forecasts through 2014 for the enterprise telephony market, including TDM PBX and KTS systems, hybrid and pure IP PBX systems, IP PBX by system size, VoIP gateways, unified communication applications (communicator, unified messaging), IP desk phones and IP soft phones. The report tracks 3Com, Aastra, AudioCodes, Alcatel-Lucent, Avaya, Cisco, Dialogic, D-Link, Mitel, NEC, NET/Quintum, Samsung, ShoreTel, Siemens, Tadiran, Toshiba, Vertical, and others.

Related Research

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Upcoming Research

See Enterprise, VOIP and UC on Infonetics' portal (http://www.infonetics.com/login) or follow the links below for more information:

• SIP Trunking Deployment Strategies: North American Enterprise Survey (July 1)
• Enterprise SBC Market Outlook Forecast (July 7)
• Quarterly Enterprise UC, VoIP, and TDM Equipment Market Share, Size, Forecasts (Aug. 30)
• Biannual VoIP and Unified Communication Services and Subscribers (Sept. 29)
• Unified Communication Product Features and Vendor Ratings: North American Enterprise Survey (Oct. 19)

About Infonetics

Infonetics Research is an international market research and consulting firm serving the communications industry since 1990. A leader in defining and tracking emerging and established technologies in all world regions, Infonetics helps clients plan, strategize, and compete more effectively. For additional information, contact Infonetics report lead analyst Matthias Machowinski, directing analyst, Enterprise Voice and Data, Infonetics Research: Email Contact, or call 408-583-3363. For Infonetics sales, contact Larry Howard, vice president at This email address is being protected from spambots. You need JavaScript enabled to view it., 408-583-3335, or Scott Coyne, senior account director at This email address is being protected from spambots. You need JavaScript enabled to view it., 408-583-3395.