The emerging markets of Central and Eastern Europe, the Middle East and Africa grew significantly, with increasing levels of investment in infrastructure particularly in Russia, Saudi Arabia and the United Arab Emirates. The more mature Western European market, however, recorded a small year-on-year decline although it continued to account for the majority of the regional total. EMEA overall remained the largest region in the world, accounting for 42% of global line shipments, followed by North America, Asia Pacific and Latin America.
Canalys: Europe, Middle East & Africa enterprise telephony CPE Market shares Q2 2006.
Alcatel 15.5%
Siemens 15.3%
Nortel 10.7%
Avaya 9.9%
Aastra 9.9%
Others 38.8%
Note: Aastra Q2 2006 shipments include DeTeWe following acquisition
Canalys say competition remains fierce in EMEA. Alcatel finished the quarter as market leader with 15.5% market share, followed closely by Siemens.
"Alcatel has invested in its Russian operations and is now seeing the benefits as it capitalises on growing levels of investment in telecommunications," said Canalys analyst Matthew Ball. Alcatel's strong growth in Central and Eastern Europe outweighed a decline in Western Europe, including its key markets of France and Italy. Its closest competitor, Siemens, maintained its strong position in EMEA despite announcing intentions to dispose of the remaining elements of its Com business unit. This followed the formation of a joint venture with Nokia at the beginning of the quarter to focus on the service provider area.
"Siemens needs to demonstrate its commitment to the enterprise telephony sector quickly in order to retain and attract customers and channel partners, as its competitors are likely to focus on this weakness," Ball added. Nortel, Avaya and Aastra continued to battle for the third position in the EMEA market, with Nortel remaining just ahead. Just outside the top five, Ericsson and Panasonic remained narrowly ahead of Cisco, which closed the gap in another quarter of strong growth. Mitel, however, was the rising star among the top ten vendors, recording its best quarter in EMEA and posting year-on-year growth of 50% according to Canalys.
The biggest news of the quarter was Microsoft's announcement of its unified communications strategy and alliance with Nortel. "While most of the leading vendors have announced interoperability between their telephony systems and Microsoft's Live Communications Server, they will be increasingly competing against the software giant in the future," said Alessandra Fitzpatrick, Canalys vice president. "Microsoft's impact in the enterprise telephony market, however, will take a long time to materialise. Once it delivers a reliable version of the announced Office Communications Server 2007, it will then be challenged to develop a telephony channel either by recruiting new specialist resellers or converting existing partners to sell telephony," she added. "The channel is important in enterprise telephony in EMEA, especially for SMBs."
Overall, Canalys estimates that indirect channels, including resellers, service providers and systems integrators, accounted for 87% of line shipments in Q2 2006.
Canalys forecasts that the EMEA enterprise telephony market will continue to grow, as businesses replace ageing telephony systems installed following widespread upgrades in the late 1990s in preparation for Y2K. Line shipments are forecast to peak in 2009 at 24.6 million before falling slightly to 24.3 million in 2010.