Premises Phone System Sales Fall 8%

A decline in on-premises private branch exchange (PBX) licenses led the global market to decrease eight percent in 2017 from 2016, to $5.7 billion, according to IHS Markit analyst Diane Myers. Total PBX lines were down nine percent year over year in 2017, with cloud alternatives and buyer caution being key issues.

“Just as we see one area begin to improve, it’s offset by slowdowns in specific geographies or market segments,” Myers said. “Many businesses are holding off on upgrades and new purchases, and the move to cloud services is having an impact.

Although enterprise spending is healthy, businesses are giving low priority to telephony upgrades and expansion on the premises side; PBX average per-line revenue was $167 in 2017, a 1 percent uptick from 2016

Enterprises continue to migrate to IP—to pure IP PBXs in particular—but the segment remains smaller than hybrid systems; hybrid IP PBXs represented 64 percent of all lines shipped in 2017

Demand for unified communications (UC) has been erratic over the past four years, but the segment was in positive territory in 2017, with revenue up five percent from the prior year, IHS Markit says. UC adoption also is growing as more functionality is incorporated into PBX packages.

The IHS Markit quarterly enterprise UC and voice equipment report tracks PBX phone systems (TDM, hybrid and pure IP), UC applications and IP phones.


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