Market Growth : Private Branch Exchange Market

Market Growth
The market for key systems has primarily been replaced by PBX systems and the market for PBX systems is decreasing as they are being replaced by computer telephony systems.

Private Branch Exchange Market
The PBX market has been experiencing a decrease in annual sales since the mid 1990s. In 2000, sales of PBX systems declined by 10%. With computer telephony becoming a cost-effective solution for most companies, traditional PBX systems are slowly being phased out. However, there continues to be a growing market for small PBX that are used in small office/home office (SOHO).

Figure 1 shows the trend that has sent PBX manufacturers scurrying to shore up other technological areas. Emphasis has been recently shifted to networks and distributed intelligence via those networks. PBX’s have not become the networking “mother ship” predicted in the 1980’s and early 90’s. The Internet, VPN’s, and ATM functionality are replacing larger PBX systems.


Figure 1: PBX Market Growth

Computer Telephony Market
The computer telephony market is the key growth area in the private networking industry. In the year 2000, 17% of all U.S. businesses with existing PBX systems began a transition to computer telephony systems.

By 2005, CTI systems are expected to penetrate into 80% of all United States businesses. Computer telephony systems are becoming popular because CTI systems only cost $300-$500 per seat compared to PBX systems that cost $800 or more per seat.

Sales of computer telephony equipment in 2000 was $138 million dollars, up from less than $10 million in 1998. CTI equipment sales are expected to exceed to $3.2 billion dollars by 2005. Figure 2 shows a growth of CTI market worldwide.


Figure 2: Computer Telephony Market Growth