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Desktop Phones Are On the Way out – Unless They’re Not

Posted by Paul Desmond

Aug 5, 2015



Polycom last week announced a couple of new desktop phones that the company says works with “a broad array of SIP call control platforms and integrate with third-party Web-based UC and productivity applications.”  But all I could think of when I saw the press release was, “Who buys desktop phones anymore?”

To answer the question, I talked to Chris Thorson, senior director of product marketing for Polycom. As it turns out, he wrote a blog post on this very topic late last year.  His main points are that desktop phones are highly reliable, deliver good quality audio and are easy to set up and use. No arguments with any of that here.

As for Polycom’s new phones – the single-line VVX 101 and dual-line VVX 201 – they are intended as low-cost phones for certain situations where a desktop phone just makes sense. Think wall phones for use by multiple employees or “front line workers,” such as the guy in the tire store who has to use it to take calls from customers and to call other stores to find tires. Such folks are not tied to a desk all day, so a professional headset just doesn’t make sense.

I’ll go along with that. But in thinking about the issue further, with respect to typical office environments it strikes me we’re likely dealing with two main camps here. The first is folks like me who are happy to ditch their desk phone and use either a cell phone with headset or ear buds or, as I do most often, a softphone with headset – lately either Skype or Google Voice. The other camp is folks who have no interest in change. They’ve talked on a desk phone all their lives and are happy to continue doing so.

Then there’s a bit of a wild card, that being cloud-based VoIP and unified communications services. You can make a case that desk phones make good sense when used with such services, and Thorson heartily agrees.

Which leaves us with two main arguments that I’ll explore here.

IP Desktop Phones are Dying a Slow Death

The first argument is that IP desktop phones are on the way out. This makes sense if you consider that the latter camp mentioned above that loves their desk phones is on the wane. As the work force continues to get younger, it’s filled with people who grew up with cell phones and Skype and all the rest – and are quite comfortable with no desk phone in sight.

And it’s not just the young folks who want to ditch desk phones. Even some old fogies like me who can remember using rotary dial phones are doing it.  

The market numbers bear that out, as sales of IP desktop hardware, and IP PBXs, is expected to be rather anemic in coming years. As IDC reports in its Worldwide IP PBX and Desktop Hardware IP Phone 2014–2018 Forecast:

"Low-single-digit IP PBX revenue growth is predicted by IDC for 2014–2018, with an expected compound annual growth rate of 2.8% for the forecast period," states Rich Costello, IDC senior research analyst, Unified Communications. "But product and revenue challenges will continue for IP telephony and UC&C vendors as customer interest and demand continue to evolve from hardware based to more software-based solutions."

To be fair, Thorson says growth in desktop phones has been in single digits or flat for quite some time, with numbers closely tied to the economy in general. And he says the argument over whether phones are dead has likewise been going on for some time.

And he’s right. A 2012 post on Slashdot asked the simple question, “Do you still need a phone at your desk?”  Commenters chimed in on both sides but I thought this one from “samzenpus “summed it up nicely:

Today I have a smart phone, corporate IM, several flavors of personal IM, the Skype client and several flavors of collaboration software including Google Apps/Docs, GoToMeeting. My wife and daughter call me or text me on the cell phone. My co-workers who are too lazy or passive aggressive to wander into my office use IM. My brother in Iraq uses Skype. I use GoToMeeting and its built-in VoIP with customers. The big black phone sits there gathering dust. 

Not sure I get the passive aggressive comment but otherwise the poster paints a pretty accurate picture of the modern work environment.  

Cloud-based VOIP/UC Will Breath Life into IP Desktop Phones

A development that may yet give a boost to the desktop phone market, however, is cloud-based VoIP and UC services. To the extent that companies sign on with cloud services to reduce the complexity inherent in providing the services on premise, a desktop phone that complements the service makes sense. Simply put, it’s easier to deploy a phone than a computer, and in some cases the phone is included in the price of the service.

As Thorson points out, in many ways we’re seeing a return to the days of Centrex service, when people bought phone service from their local telephone company. That was replaced with TDM PBXs on premise, then IP PBXs. Now things have come full circle and folks are happy to wash their hands of having to provide phone service in-house.

Today, however, the phones attached to those services are becoming far more capable, with some incorporating video screens to support not just audio but video communications, including video conferences. Yes, you can do that on a computer as well, but I can see where having such capabilities built into the phone, with the service coming from the cloud, would be an attractive, low-hassle option.

Frost and Sullivan sees it that way, as well. Alaa Saayed, ICT Industry Manager for the firm, in May posted a chart projecting growth for IP phones through 2025. He wrote:

Growth rates are expected to be much lower than in previous years. However, growth is still expected. Much of the activity will be driven by the replacement of TDM phones, growth in developing regions, and deployment of IP phones in the hosted/cloud communications space.  While Frost & Sullivan estimates that 22.0 percent of IP desktop phone shipments in 2014 was deployed in the hosted/cloud space, this figure is expected to reach 55.0  percent by 2021.   

He also projects shipments of feature-rich IP “media phones” as mentioned above would nearly quadruple in 7 years from the 1.5 million such devices shipped in 2014. And, he notes, “The market is still far from seeing massive replacements of IP desktop phones.”  

IP Desktop Phones vs. Headsets: Sorting Out Pricing

Pricing, of course, is always an issue in such decisions. This one is a bit tough to sort out. You can certainly buy a headset for far less than you’ll likely spend on an IP desktop phone, but whether it will have the features your users need or want is another issue.

The two phones Polycom just came out with – the single-line VVX 101 and dual-line VVX 201 – cost $119 and $159, respectively (at online retailer VoIP Supply). As Thorson says, they are intended to be low-cost options.

Jabra, a leading headset supplier, has wireless Bluetooth headsets at Amazon.com starting at less than $30 and corded headsets optimized for UC platforms such as Microsoft Lync for less than $40. More feature-rich models, on the other hand, are upwards of $100, while top of the line models that work with either soft phones or mobile phones are closer to $200 (and it’s pretty cool how they work, as we’ve reported previously).

We’ve love to hear your thoughts on the issue – do desktop phones have a future in your organization or are you phasing them out? Or maybe some mix?  Let us know in the comments below.

Topics: Voice, Business Case, Employees, UCaaS, Headsets,, VoIP,

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