Networking vendors Nortel Networks and Avaya have lifted the market by announcing an improvement in financial results and a further focus on IP telephony and wireless data products.
Nortel reported yearly profit of $732m for 2003, compared with a net loss of $3.3bn in 2002.
For its fourth quarter 2003, the vendor reported turnover of $2.8bn, compared with $2.5bn for Q4 2002. Profit for Q4 was $499m, compared with a net loss of $168m in Q4 2002.
Compared with Q4 2002, Nortel's sales in EMEA decreased by five per cent, but showed an 11 per cent increase on Q3 of 2003.
Its wireless networks turnover increased by 33 per cent, but enterprise networks saw a slight decrease of two per cent.
Nortel's chief executive, Frank Dunn, said in a statement: "While we expect the percentage growth in overall capital spending by our customers in 2004 compared with 2003 will be in the low single digits, we expect to grow faster than the market."
Nortel said it plans to achieve this by focusing on voice over IP and wireless.
Analyst IDC has predicted a 50 per cent growth in IP telephony this year. Chris Barnard, research manager at IDC's telecoms and networking division, said: "It's not a surprise that Nortel is taking this focus. There are lots of legacy systems out there that can be transformed to IP networks."
Avaya also saw IP as a saviour, and said growing IP product sales to large and small customers had helped boost overall sales.
For its fiscal Q1 2004 Avaya reported a three per cent turnover increase to £971m, compared with $947 the previous year. Profit for the quarter was $10m, improving on a $121m loss for the same period last year.
Don Peterson, chief executive of Avaya, said in a statement: "Our customers are increasingly turning to IP telephony to deliver real improvements in business value."
Avaya said it hoped to maintain similar results for next quarter, and was introducing new software applications, media servers and wireless IP phones for converged networks.
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