Customer spending on new IP lines and desktop gear declined significantly last year in North America compared with 2007.
Much of the downturn during 2H08 can be attributed to fewer orders from three key verticals devastated by the recession: financial services, manufacturing and retail, according to research from T3i Group LLC.
The report confirms all sectors of the telecommunications manufacturing industry have been affected negatively by the global economic situation.
However, it says the major North American networking suppliers – Cisco, Avaya, Nortel, Mitel and NEC – have crafted ways to survive the downturn.
According to report "InfoTrack for Enterprise Communications Full Year 2008 Report", the decline led to US manufacturer revenues in 2008 totalling USD $3.7 billion, down 11 per cent from 2007, while Canadian revenues for 2008 totaled USD $289 million, down 8 per cent from 2007.
The InfoTrack report also found total average selling prices (ASP) were down 1 per cent in 2008, with IP platform prices dropping 4 per cent due to reduced demand resulting from capex cutbacks and the shutdowns of unprofitable business locations.
IP revenues in total fell 7 per cent during the 12-month period, although smaller key system pricing remained stable (down less than 1 per cent) due to the addition of embedded IP, wireless and applications functionality.
Bob Olson, Voice Technologies Analyst at T3i Group, said there could be a near-term solution to slowed IP telephony spending: monies promised in the American Recovery and Reinvestment Act (also known as the stimulus package).
"Fortuitously, the biggest winner for the telecom sector in the appropriations portion of the final 2009 stimulus bill is infrastructure, with nearly USD $137 billion targeted for miscellaneous improvements, including USD $9 billion to expand broadband Internet access," he said.
"The justification for the USD $9 billion is based on building a level playing field for rural programs, including schools, libraries and hospitals. All that translates into new software and hardware sales."