One of my all time favorite Monty Python scenes is from the Holy Grail when the cartman comes around hollering “Bring out your dead!” After a number of corpses are thrown into the pile, John Cleese tries to throw an old man on top who suddenly exclaims, “I’m not dead yet”. That is what went through my head when I read the recent article from Frost and Sullivan highlighting their recent research into the IP Phone market, which based on their findings is most certainly not dead yet.
Last summer I wrote an article discussing the evolving movement away from deskphones and towards myriad audio endpoints, including personal cell phones, softphones and professional headsets. More recently, my colleague Paul Desmond wrote an article called Deskphones are on their way out...Unless they’re not, discussing the forces working against deskphones and their surprising resiliency in the face of these forces.
Now Frost and Sullivan makes it clear that not only are IP Deskphones not dying, the market is going to continue to grow, albeit more slowly, for the next 10 years, as this chart show:
Drivers of Growth in the IP Phone Market
According to their research, much of the activity and growth will come from TDM phone replacement and from growth in developing regions. Additionally, IP Phones are growing as hosted and cloud communications continue to gain traction. In 2014 hosted and cloud comms represented 22% of the IP Deskphone market, but that number is expected to sell to 55% by 2021. That makes sense as the pace of UCaaS growth and the deployment of Cloud PBX continues to accelerate...check out this infographic for details on UCaaS growth.
Additionally, F&S sees the growth of IP Media phones as a significant driver of growth for the deskphone market. They define Media phones or video phones as:
...advanced IP desktop phones equipped with larger displays and either integrated or plugged cameras to enable personal video communication, as well as provide support for advanced telephony and UC features and integrated business applications.
1.5 million IP Media phones were shipped in 2014, and that market is expected to grow to almost 6 million by 2021. Further drivers of growth include lower price points (as we discuss here), and the trend towards more advanced capabilities and UC enabled devices (as we discuss all the time).
Unified Communications, Headsets and Forces Eroding the Deskphone’s Dominance
All of this good news does not mean that deskphones don’t have things working against them. For those of us that switched to softphones, UC and headsets a long time ago, there is no going back to holding a phone against your ear and getting a crick in your neck while you collaborate with colleagues. All of this, is acknowledged in their article:
Frost & Sullivan estimates that in 2014 there were around 47.7 million active UC clients in use by business end users. However, most of these clients are still used in conjunction with IP desktop phones. Thus, while communications usage is shifting towards PC and intelligent mobile clients, IP desktop phones are still a viable alternative at the desk. We might not be using them as much as we used to in the past, but they are still there when we are at the desk. We believe that, over the coming years, there will still be a prime time for each type of endpoint, including desktop phone devices, depending on the workers’ situation, location and time of the day.
In addition to the aforementioned growth in the UCaaS and UC markets, the audio endpoint market is quickly moving towards professional headsets as they become mainstream devices for knowledge workers, as this infographic highlights. While the IP Deskphone growth rate is expected to slow, the market for professional headsets is expected to grow at 23% CAGR through 2020, which is blazingly fast.
In addition, the headset market which has traditionally been driven primarily by the contact center space is now rapidly moving towards unified communications and knowledge workers. UC-related shipments already account for 26.5% of the headset market, and the revenue from that segment of the market is expected to nearly quadruple from $281 Million annually in 2013 to $1 Billion by 2020. Urban Gillis, VP of Sales at Jabra claims this growth makes sense considering that “the hands-free nature of headsets increases knowledge worker productivity, and has been proven to increase the adoption rates of UC deployments. That’s why over three-quarters of companies choose headsets when replacing deskphones.”
Thanks to Frost and Sullivan for making it clear that although the market is changing quickly, the IP Deskphone is not dead yet. Let us know what your company’s plans are when it comes to deskphones and deskphone replacement in the comments section below.