Analyst: Cisco Sees VOIP Sales Bump in Q2
Synergy says Cisco’s second-quarter VOIP gear revenues grew 72.3 percent over the first quarter. Cisco sold $67.5 million in VOIP gear, compared with $39.2 million the previous quarter. (See Cisco Q4 Hits the Mark.)
By "VOIP equipment," Synergy means media gateways, softswitches, and analog telephony adapters (ATAs). Cisco’s sales of high-density media gateways alone increased 171 percent during the quarter, says Synergy VOIP analyst Ryan Olsen. Sales of Cisco media gateways of all densities increased sequentially by 104 percent. Cisco softswitch sales, on the other hand, were down slightly for the quarter, as were sales of ATAs.
Cisco’s strong quarter was also driven by strong sales to U.S. carriers, which jumped 200 percent in the second quarter. “They are attributing it to U.S. cable and European telco operators,” Olsen says. “The U.S. is obviously leading the charge there, but they like to make clear that it's not a single theater.”
Did the increases come from sales to a small set of U.S. carriers? Hard to tell, says Piper Jaffray & Co. analyst Munjal Shah, because Cisco does not break out its VOIP gear sales by customer or even by product type in its regulatory filings.
Overall, Cisco grabbed an 11.9 percent market share in the second quarter, moving from fourth place into second place behind Nortel Networks Ltd. .
Cisco's pleasure was Nortel's pain in the quarter, Shah says. Nortel’s revenues in the space dropped 21.4 percent during the quarter. That left the Canadian vendor with a 14.6 percent market share for the second quarter, down from its 20.4 percent share in the first quarter.
Rounding out the second quarter’s top five VOIP gear vendors are Sonus Networks Inc. (Nasdaq: SONS) with 10.1 percent market share, Siemens AG (NYSE: SI; Frankfurt: SIE) with 9.7 percent, and Alcatel (NYSE: ALA; Paris: CGEP:PA) with 6.2 percent, Synergy's Olsen tells Light Reading.
Olsen says Cisco’s growth in carrier VOIP market share leading up to the second quarter had been “a little bit up and little bit down.” The last major growth spurt came in the second quarter of 2005 when Cisco’s VOIP revenues surged 86 percent, he notes.
Synergy says the media gateway market generated revenues of $309 million worldwide during the second quarter. That’s an increase of 12.9 percent over the first quarter, and 32.7 percent over the second quarter last year.
The softswitch market generated revenues of $192 million for the quarter, a growth of 7.8 percent over the first quarter and 31.8 percent over the second quarter last year.
Overall, Synergy says, worldwide carrier VOIP gear sales increased 31 percent year-over-year to $573 million, driven by strong media gateway and softswitch sales. That represents a 9.6 percent increase over the first quarter and a 30.6 percent jump from a year ago.
Dell'Oro Group also published research Wednesday, saying sales of softswitches and media gateways grew 8 percent to $742 million in the second quarter of 2006, following declining sales during the first quarter. (See VOIP Rebounds in Q2.)
— Mark Sullivan, Reporter, Light Reading