Executive Summary

In two new reports: “Service Provider VoIP Equipment and Subscribers-third quarter (3Q10),” and “IMS Equipment and Subscribers market share and forecast,”  Infonetics Research finds that although prices have dropped, worldwide demand has risen for VoIP infrastructure hardware.  Apparently, large network transformations are driving the need for more IP-enabling products and services, including Internet Protocol Multimedia Subsystem (IMS).

While VoIP equipment shipments were up in the 3rd Q 2010, overall market revenue is decreasing despite growing demand for IP-enabling services,  Infonetics Research predicts growth for VoIP equipment, especially with products that help in the migration to all-IP systems and those focused on improving mobile services.  A key missing piece is mobile VoIP, which hasn’t happened yet despite numerous predictions from many market research firms.

According to the Infonetics’ report: “Service Provider VoIP Equipment and Subscribers,” the total service provider VoIP equipment market – including trunk media gateways, SBCs(Smart Business Communications Systems?), media servers, softswitches and voice application servers – decreased 9 percent from the second quarter to $511 million. But while revenue is down for the quarter, shipments for almost all segments in the market are up sequentially.  Worldwide, Asia Pacific is the only region expected to post year-over-year revenue growth for service provider VoIP equipment in 2010, the report noted.

The IP multimedia subsystem space, is experiencing an increase in revenue as a result of the demand for VoIP equipment, according to Infonetics’ third-quarter “IMS Equipment and Subscribers” report. The worldwide IMS equipment market, including IMS core equipment and application servers, grew 4 percent in the third quarter, on the heels of a 34 percent jump in the previous quarter.  Longer-term, the IMS market will get a boost from the push for enhanced mobile services, according to this report.

ANALYST NOTE

“The number-one story that will come out of 2010 for the IMS and carrier VoIP equipment markets is China, where conditions are driving volumes up and pushing prices down. There are large network transformation projects underway in China, so demand for equipment is very strong, but at the same time, vendors are willing to push the pricing limits to get into strategic accounts. In the third quarter of 2010, every product category except media servers was impacted by pricing pressures, so while shipments were up for most segments, total worldwide revenue took a hit. Looking at the long-term prospects, the network elements that are best poised for solid growth are those that facilitate the migration to all-IP networks, such as session border controllers (SBCs),” notes Diane Myers, directing analyst for VoIP and IMS at Infonetics Research.

Diane Myers,  Directing Analyst, VoIP & IMS Infonetics Research  (408) 583-3391   [email protected]

SERVICE PROVIDER VOIP MARKET HIGHLIGHTS

• The total service provider VoIP equipment market, including trunk media gateways, SBCs, media servers, softswitches, and voice application servers, decreased 9% from 2Q10 to 3Q10, to $511 million
• While revenue is down for the quarter, shipments for almost all segments in the market are up sequentially
• Asia Pacific is the only region expected to post year-over-year revenue growth in 2010 for service provider VoIP equipment
• In 3Q10, GENBAND leads the combined carrier VoIP and IMS equipment market for worldwide revenue

IMS MARKET HIGHLIGHTS

• The worldwide IP Multimedia Subsystem (IMS) equipment market, including IMS core equipment and application servers, grew 4% in 3Q10, on the heels of a 34% jump in the previous quarter
• In 3Q10, the 4 top vendors, Alcatel Lucent, Ericsson, Huawei, and Nokia Siemens Networks, continue to fight it out for new deals and replacement RFPs
  • Ericsson and Nokia Siemens saw revenue growth with CSCF in a relatively flat quarter
• Overall, the IMS equipment market is experiencing strong and healthy growth, driven in the near-term by the continued adoption of VoIP services and service provider migration of VoIP services to IMS networks
• Longer-term, the IMS market will get a boost from the push for enhanced mobile services, with LTE being the most significant driver

Top 5 VoIP and IMS Vendors by 3Q2010 Revenue are: GENBAND, Huawei, Alcatel-Lucent, Acme Packet, Metaswitch. 

This includes: combined sales of worldwide trunk media gateway, softswitch, media server, VAS (value added service) and CSCF  server market share. (CSCF=Call Session Control Function is a central component to signaling and control within the IP Multimedia Subsystem- IMS).  Interestingly, these five companies only comprise approximately 60% of sales.  The “Other” category of miscellaneous vendors accounts for about 40% of combined revenues.

About  Infonetics’ quarterly reports:

 1. Service Provider VoIP Equipment and Subscribers report provides worldwide and regional market share, market size, forecasts, and analysis for VoIP subscribers and media processing and call control carrier VoIP equipment, including high-, mid-, and low-density trunk media gateways, line access media gateways, SBCs, media servers, Class 4 and Class 5 softswitches, and voice application servers (IP Centrex/hosted IP PBX, IP trunking, and residential). Vendors tracked include Acme Packet, Alcatel-Lucent, AudioCodes, BroadSoft, Cisco, Dialogic, Ericsson, GENBAND, Huawei, Iperia, Italtel, MetaSwitch, Movius, Nokia Siemens, RadiSys Convedia, Sonus, Technicolor (Thomson), Tekelec, Xener, ZTE, and others.

2. IMS report provides worldwide and regional market size, market share, forecasts, and analysis of mobile and fixed-line IMS subscribers and equipment. Equipment tracked includes IMS voice and IM/presence application servers and IMS core equipment, including home subscriber servers (HSS), call session control function (CSCF) servers, media resource function (MRF), and breakout gateway control function (BGCF). The report includes an IMS deployment tracker by region, country, carrier, and vendor. Vendors tracked include Alcatel-Lucent, Broadsoft, Ericsson, Huawei, Mavenir, Nokia Siemens, ZTE and others.

Contact Info

If you are interested in buying an Infonetics report or discussing a consulting project? Please contact:

Larry Howard, Vice President
[email protected] +1 408.583.3335

Scott Coyne, Senior Account Director Eastern North America, Europe, Middle East
[email protected] +1 408.583.3395

www.infonetics.com

Note:  This author has no business relationship with Infonetics Research and never has.  We are pleased to inform you that Infonetics co-founder Michael Howard is an IEEE member and has spoken at our June 24 ComSocSCV-TiE workshop on Mobile Apps and Infrastructure (his topic was mobile backhaul)