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IP Phones - SIP Phone Market Underserved, Study Finds
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September 05, 2013
SIP Phone Market Underserved, Study Finds
By Mae Kowalke, TMCnet Contributor

Can the SIP phone market support more competition? A recent study by New York-based Eastern Management Group suggests it can.

“The SIP phone market is both large and growing,” noted John Malone (News - Alert) of the Eastern Management Group.

“Millions of SIP corded, wireless and softphones are purchased annually,” he said. “Our research also shows SIP phone sales will at least double between now and 2018.”

Yet, few SIP phone manufacturers have more than 10 percent market share in any region, and no SIP phone manufacturer has deep penetration in more than one region.

The big three vendors in the U.S. are Polycom (News - Alert), Aastra and Grandstream, each with at least 10 percent share. Canada has two with this level of market share. Western Europe has three. But no region has more than four vendors to speak of.

“We think 10 percent minimum market share is achievable for new competitors,” noted Malone. “In our opinion, every region of the world can well support 4-6 SIP phone vendors, each with a minimum of 10 percent share.”

There are more than 50 SIP phone manufacturers in the world, but most of them have less than 1 percent market share and are only sold to customers in Asia Pacific.

In a given region there definitely are heavyweights. Polycom dominates the U.S. market for SIP phones with a 46 percent market share. Aastra (News - Alert) is a big player in Canada, and Yealink towers over most of its competition in the Middle East and Africa. These competitors and snom all have more than 10 percent market share in at least two regions. Yet few have sizeable market share in many regions, with Grandstream perhaps being the lone exception.

Why is the market still so open?

“At least a dozen manufacturers of proprietary PBXs only support their own instruments,” suggested Malone. “Some say that to offer an open standard SIP phone invites competition and may result in loss of customer control.”

He said that the next wave of SIP phone vendors could come from multiple directions. One could be PBX manufacturers whose current phones could work with SIP.

“Companies like Cisco and Mitel (News - Alert), who may not aggressively target the SIP market, do have measurable SIP phone market share in parts of the world,” he noted. “Based on the customer surveys, it is common for IT managers eager for alternative solutions to repurpose these telephone sets.”

Another possible group of new entrants could be established vendors that currently make telephone sets or phone systems for the SMB and SoHo markets. These companies have experience selling low-margin products through channel sales, and could relatively easily capture part of the IP phone market.

But wherever the competition comes from, Eastern Management (News - Alert) Group predicts that the SIP phone market has room for more firms.

Edited by Rachel Ramsey
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