Tough times ahead for PBX market

MZA and Dell'Oro numbers make grim reading as VARs report sales are "a slog"

Hold on tight: VARs are experiencing a bumpy riade as the market dropped by seven per cent in Q1

The PBX channel has been hit with a double whammy, as two analysts have predicted the market could face a sharp contraction this year.

Figures from MZA this month revealed the global PBX market hit the buffers in quarter one 2010. The 12 million extensions rolled out represent a seven per cent decline on the preceding quarter, after three quarters of sequential growth. The analyst said the Q1 numbers were a “pothole” that could foreshadow a “bumpy ride” for the remainder of the year.

Numbers from the Dell’Oro Group piled on the gloom, showing that Q1 saw a sequential decline in global market revenue. According to the analyst, the drop-off was caused by softness in Europe, as well as normal seasonal patterns and end users sitting tight for new product releases.

Dell’Oro director Alan Weckel said a stuttering euro could smash the market this year, and a 10 per cent currency decline would wipe $20m (£13.49m) per quarter from global sales.

“We believe that PBX market revenue will continue to weaken in 2010, despite a rebound in line shipments,” he added.

Russell Lux, managing director of LuxTech, revealed that telephony hardware now provided just 15 per cent of his company’s revenue, down from half several years ago.

“PBX sales are tough and we are in a slog,” he said. “We go into an Avaya deal and the managing director has six quotes in front of him – you are quoting for pennies. One problem is the kit is so good, you do not need to upgrade it.”

G3 Telecommunications managing director, Tony Parish, said the market has been in better shape since the start of the year.

“It is still challenging but we have seen an upturn,” he said. “I would not say [refresh cycles are back to] normality, but there is light at the end of the tunnel.”