The latest figures released by MZA show that PBX/Call Control extensions and licenses (excluding Micro PBX products) fell by 4% year-on-year in the calendar year Q1 2015 (January to March 2015 inclusive).
After two successive quarters of recovery the global market returned to year-on-year decline Q1 2015, with the financial crisis in Russia significantly steering the decline.
The decline was largely driven by solutions <100 extensions/licenses which fell by 5% year-on-year, while solutions >100 extensions/licenses fell by 3% year-on-year as a recovery in the North American enterprise market against a poor Q1 2014 prevented a similar decline in the enterprise segments >100 extensions.
The Russian financial crisis partially driven by Western sanctions, including trade embargoes for Western and Japanese PBX manufacturers, saw the Russian Call Control market fall to unprecedented levels. While its neighbour, crisis-torn Ukraine, saw its market fall by similar levels.
As a result, the Eastern European market fell by 20% year-on-year, despite strong volume growth in Poland, the second largest market in the region.
With the exception of the North American market which remained flat overall year-on-year, all other regional markets suffered comparatively smaller declines at either 3% or 4% year-on-year.
?Global PBX/IP PBX Market - Q1 2015?NEC returned once more to lead the global Call Control (PBX/IP PBX) market in the first quarter of the calendar year with a market share of 12%, repeating its success in Q1 2014. Sales in its home market of Japan aided sequential share gains for the vendor, up three percentage points globally against Q4 2014.
The final quarter of the Japanese financial year is usually the strongest quarter in the Japanese Call Control market, and Japan accounted for 12% of the global market in Q1 2015.
Capital investment in Japan rose by 7.3% sequentially, allied to the weak yen which boosted the value of overseas revenue in yen terms, improving profits and prompting firms to expand investment.
NEC continued to dominate its domestic market witnessing a 1% share gain year-on-year. Allied to its Japanese sales, sales of the new Univerge 9000 series were strong in many international markets following its introduction to its partner network.
Avaya, the global leader in 2014, was in second position and improved its global market share to 12% in Q1 2015 from 11% in Q1 2014, once more the share gain was largely driven by year-on-year growth through its IP Office solution in the mid-market between 51 and 250 extensions, most notably in the Middle East and Africa region.
Cisco retained third position globally aided by year-on-year share gains in North America, and accounted for a flat 11% global share.
Mitel retained its fourth position of Q4 2014, ahead of Panasonic, with both vendors maintaining flat market shares of 8% and 7% globally against Q1 2014.
NEC retained its Q1 2014 leadership in the global <100 licenses/extensions market (excluding Micro PBX products) as it took a 16% share in Q1 2015, supplanting Panasonic who led the market in the intermediate quarters.
2015 marked NEC's third consecutive top position for the first quarter of the calendar year, although its 16% share was down one percentage point against Q1 2014.
Panasonic saw market share grow by one percentage point year-on-year to 12%, aided by volume growth in Brazil and Mexico, and notably strong sales of the KX-NS500 in Italy and Spain.
Avaya continued to gain market share most significantly in the 51-100 extensions segment, and were up one percentage point in the <100 licenses/extensions market overall.
Cisco and Avaya maintained their 20% and 13% global market shares respectively in the >100 extensions/licenses market in Q1 2015, with both manufacturers benefiting from improving volumes year-on-year in North America.
Huawei, who became a major player in the global enterprise market in CY 2014, retained its Q4 2014 third position with a 10% share, up one percentage point year-on-year.
NEC, enjoyed growth in the North American, Indian and Italian markets, which bolstered its traditionally strong first quarter sales in the Japanese enterprise market. Sequentially, NEC took fourth position from Mitel, who had held the position in Q3 and Q4 2014, with both vendors recording flat market shares against Q1 2014 of 9% and 8% respectively.
Microsoft, despite a slowdown in volume against Q4 2014 as enterprises waited for the launch of Skype for Business, nevertheless continued to improve its volumes against Q1 2014 with Lync's popularity improving most notably in Western Europe.
Microsoft took a 7% share in the quarter to claim sixth position. Unify enjoyed a return to share growth in seventh position as it captured 7% of the global market, compared to 6% in Q1 2014. This was largely driven by a 17% year-on-year uplift in solutions >100 extensions/licenses in the German market.
World IP Extensions/Licenses Market ?IP extensions/licenses grew by 3% year-on-year, outperforming the total market largely driven by the growth in the North American and Asia Pacific enterprise segments.
As a consequence, the North America and Asia Pacific total markets witnessed the largest shift towards IP solutions in Q1 2015, with the IP penetration rate (the % of IP extensions into total extensions to the desktop) growing by four percentage points year-on-year.
Cisco, Huawei, Avaya and NEC all helped to drive the Asia Pacific >100 IP licenses market up 12% year-on-year, while Cisco can be largely credited with driving an 8% growth in the North American market.
The global IP penetration rate rose to 47% from 44% in Q1 2014. That said, the quarter a year ago, was a particularly poor one for enterprise in North America, where IP extensions account for the vast majority of extensions deployed.
The global IP penetration rate fell in Q1 2015 sequentially against the 48% rate in Q4 2014, as the more TDM-centric markets of Asia Pacific, maintained their historical record of taking a greater proportion of global extensions compared to the final quarter of the year. With the exception of Eastern Europe, Asia Pacific accounted for the lowest regional IP penetration rate of 33%, up from 29% in Q1 2014.
A fall in IP solutions in EMEA resulted in Cisco maintaining a flat 21% share in the global IP licenses market from Avaya in second position, who took a stable 18% share.
Mitel followed in third position with a share of 9% ahead of Microsoft and Alcatel-Lucent Enterprise who took 8% and 7% global shares.
Global PBX/IP PBX Market - Rolling Year ?Excluding Micro PBX products, the global PBX/Call Control extensions and licenses market over the rolling year CY Q2 2014 to CY Q1 2015 (April 2014 to March 2015 inclusive) was flat year-on-year, with solutions in enterprise (>100 licenses/extensions) marginally out-performing those in the SME ( <100 licenses/extensions) segment, by rising by 1% against a flat smaller systems segment.
The largest market Asia Pacific aided by continued growth in Middle East and Africa prevented a global decline, as economic problems pervaded Eastern Europe and Latin America, while economic factors coupled with technological changes such as the drift towards UC applications in ICT expenditure has seen the average lifespan of call control solutions increase in Western Europe and North America.
India's economy has shown some revival over the period with the new government implementing investment friendly policies culminating in it becoming the world's fastest growing major economy in Q1 2015 and Q3 2014 surpassing China. Notably, of the main world markets, India saw the greatest increase in extensions volume over the rolling year, equating to over a quarter of a million extensions.
In the competitive landscape positions remained largely unchanged when comparing the rolling year against MZA's CY Analysis for 2014. Avaya continued to lead the global market for with a stable 12% share, followed by Cisco exactly half a percentage point behind the market leader.
NEC and Panasonic closed on the market leaders in third and fourth positions, largely through the more buoyant Asia Pacific regional market. Mitel and Alcatel-Lucent Enterprise remained in fifth and sixth positions respectively ahead of Huawei, Unify, Microsoft and Ericsson-LG Enterprise.
In the SME ( <100 licenses/extensions) market, Panasonic held first position for the rolling year for the second consecutive quarter. Indeed it really started to improve volumes across markets in Q2 2014 (the beginning of the rolling year) following the launch of the KX-NS series of communications platforms. Panasonic accounted for a 16% share, up three percentage points year-on-year. NEC remained in second position for the second successive quarter with a stable 14% share, ahead of Avaya who took a 10% market share.??Cisco continued to lead the global >100 extensions/licenses market, with a market share of 21%, down one percentage point. Avaya increased market share to 14%, up one percentage point. Significant volume growth in the large enterprise segments >500 extensions enabled both Huawei and Microsoft to gain market share, in third and fifth positions respectively. Mitel, with its acquired heritage Aastra solutions included, remained strong in fourth position with a flat 8% share.
Note: This analysis refers to user license/extension volume performance, due to the fact that this is the key performance indicator provided by all contributing parties, with no vendor providing sector specific analysis of revenue performance.