IntelliCom Analytics: North American Business Communications Revenues Plunge 29% in 1Q09

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Top Five Providers All Experience Double-Digit Declines

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We expect the next several quarters to be particularly significant, especially for those players in a weakened condition

According to new research from industry analyst firm IntelliCom Analytics, North American Business Communications market revenues plunged by 29% in the first calendar quarter of 2009 compared to the same period in 2008. These figures - presented in the IntelliCom Market Performance Dashboard First Quarter 2009 Report -- are based on total manufacturer product revenues associated with premise-based communication platform hardware, software applications, and end user devices.

"Q1 represented the first full quarter impacted by the general economic downturn, and the impact was severe with North American businesses dramatically reducing spending on Business Communications solutions and related applications", stated Frank Stinson, Partner and Senior Analyst at IntelliCom Analytics.

Year-over-year declines were experienced by all of the major providers tracked in the IntelliCom report, with the top 5 players (Cisco, Avaya, Nortel, Mitel, and NEC) all posting drops of 20% or more. "This market decline is unprecedented in both its breadth and depth," added Stinson. "Although some vendors were better positioned than others to respond to the challenges of the current environment, no one went unscathed given a market decline of this magnitude."

Despite the severity of the downturn and stability concerns impacting some competitors, total market penetration in Q1 was generally consistent with established trends. Market leader Cisco continues to enjoy a nearly 10 point lead over second place Avaya, while Nortel remained in the number 3 position it occupied prior to filing for Chapter 11 protection in January. But IntelliCom expects more significant dynamics over the next several quarters.

"We expect the next several quarters to be particularly significant, especially for those players in a weakened condition", explains Stinson. "This environment presents an opportunity for the more stable and better capitalized competitors in this space to gain share and position themselves for future growth -- whether that be through aggressive competitive tactics or acquisition."

The IntelliCom Market Performance Dashboard is a quarterly market tracking service that measures vendor performance across all layers of the Business Communications value stack. Key areas of focus include core telephony software, platform hardware, end user devices, and emerging Unified Communications applications.

About IntelliCom Analytics
IntelliCom Analytics is a professional services and business research provider focused on the rapidly evolving intelligent communications market. With a broad set of competencies ranging from competitive assessments and benchmarking to highly targeted demand forecasts based on detailed embedded base analyses, IntelliCom Analytics brings a wealth of finely honed skills, expertise and market opportunity insights to client engagements. For further information, visit http://www.intellicom-analytics.com.

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