frost & sullivan business mobile communications analyst briefing

Business Mobile Communications –Breaking Away from the Confines of the Desk

A Plethora of Endpoints for Diverse Customer Needs

Alaa Saayed, Research Analyst

Information Communication and Telecommunications

September 24, 2008

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110 Million Office Workers

Enterprise Worker Classification

Source: Frost & Sullivan

3

Enterprise Worker Classification

90 % are at Least 20% of the Time on the Go

Source: Frost & Sullivan

4

Enterprise Worker Classification

90 % are at Least 20% of the Time on the Go

15%

Office Workers

Office Workers

Mobile Workforce

Executivesand Management

65%

20%

Source: Frost & Sullivan

5

Enterprise Style Classification

On The Road

Building Premises

Client Site/Branch Office

On CampusOffice Worker

Airport

Public Hotspot

Home

Hotel

Source: Frost & Sullivan

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Industry Worker Classification

Estimated Workers

Mobile Comm.

Necessity

IT and Telecom Spending

Medium Very HighLow/Medium Low/Medium

Low/Medium MediumVery HighMedium MediumMedium

11 M20 M 9 M 3 M 6.5 M 15 M

Manufacturing and

Warehousing

Healthcare Education Government Finance Retail

Very HighLow/Medium

Source: Frost & Sullivan

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How Does Frost & Sullivan Classify Enterprise Mobile Endpoints?

Mobility Gateway SwitchPBX

Enterprise mobile endpoints are communicational devices and applications that are paid,

subsidized (up front or through a reimbursement) and managed by an enterprise business.

The device and/or application are, in turn, integrated with the rest of the enterprise

Communications infrastructure (premise-based or hosted system) to extend voice, video,

and data communication.

Source: Frost & Sullivan

Business Mobile Communication Scope

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Corded Phones

Cordless Phones

Virtual Phones

DECT

PBX System

IP PhonesDigital PhonesAnalog Phones

Digital Deskphones IP DeskphonesAnalog Deskphones

Source: Frost & Sullivan

IP DECT/SIP DECT

Mobile Phones

First Level FMC

Second Level FMCVoWLAN Phones

Dual-Mode

Fixed Mobile Clients

Analog Cordless

Softphones

VoWLAN Phones

Single-Mode

Business Mobile Communication Endpoints

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VoWLAN Devices

Picture source: Nokia, Polycom, and RIM

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VoWLAN Single-Mode Findings

• Growth: Available since 2000 – Considerable traction.

• Main Participants: Cisco, Polycom's SpectraLink, Vocera, Motorola, and OEM’s

• Main Customers: Verticals such as healthcare, manufacturing, and retail.

• Average Price: $300-400

• Major Trends:

• Major Drivers 1) Deployment of WLAN and IP telephony – 2) Vertical adoption

3) Advanced handsets 4) Long-term cost Savings

• Major Challengesand Restraints:

�Higher penetration of WLAN infrastructure �New Wi-Fi standard (802.11n)�New acquisitions�Emergence of new verticals

1) Perception of security and QoS 2) Cost of implementation 3) Alternative solutions, 4) Slow standard ratification

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VoWLAN Enabled Dual-Mode Findings

• Growth: New technology – 2006-2007: mostly trials – Great future potential.

• Main Participants: Mobile manufacturers: Motorola, Nokia, RIM, and Samsung

IP telephony providers: Avaya, Cisco, and Siemens

• Main Customers: Road and corridor warriors – Carpeted office

• Average Price: $500-650

• Major Trends:

• Major Drivers 1) Continuous entry of participants - 2) Growing popularity of consumer smartphones – 3) New benefits to customers

• Major Challenges and Restraints

�New partnerships and acquisitions�Upsurge of “Second Level” FMC clients�Enterprise WiMax

1) Lack of clear business models – 2) Limited service provider interest 3) High prices - 4) Cellular inertia

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VoWLAN Forecast

Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan

VoWLAN Device Market: Unit Shipment and Revenue Forecasts (North America), 2006-2014

-

500

1,000

1,500

2,000

2,500

2006 2007 2008 2009 2010 2011 2012 2013 2014

Reven

ues (

$ M

illi

on

)

0.00

1.00

2.00

3.00

4.00

5.00

Un

its (

Mil

lio

n)

Revenues ($ Million) Units (Million)

2007 Units: 254,000

2007 Revenues: US$110.5 million

Revenue CAGR Single-Mode (2007-2014): 25.1%

Revenue CAGR Dual-Mode (2007-2014): 131.8%

VoWLAN phones will represent 10% of total IP phone shipments in 2014.

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DECT Devices

Picture source: Polycom, Siemens, and snom

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• Growth: Mature technology – 20 years of existence – Undergoing transformation

• Main Participants: Aastra, ALU, Ascom, Polycom’s KIRK, NEC-Phillips and Siemens

• Main Customers: Businesses with legacy systems / with mobility needs and no WLAN / with mobility needs and WLAN for data only – Vertical and SMBs

• Average Price: $200

• Major Trends:

• Major Drivers 1) Maturity and stability – 2) Voice quality and security

3) Cost effectiveness 4) Integration with IP telephony

• Major Challenges & Restraints

DECT Findings

�Expansion of DECT 6.0�SIP and IP DECT – an alternative�New features and services

1) Image perception – 2) Price erosion 3) Limited or no data integration 4) Limited popularity in NA

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DECT Forecast

Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan

Enterprise DECT Phone Market: Unit Shipment and Revenue Forecasts, (North America) 2006-2014

0

15

30

45

60

75

90

105

120

135

2006 2007 2008 2009 2010 2011 2012 2013 2014

Reven

ues (

$M

illi

on

)

0.00

0.15

0.30

0.45

0.60

0.75

Un

its (

Mil

lio

n)

Revenues ($ Million) Units (Million)

2007 Units: 80,000

2007 Revenues: US$15.2 million

Revenue CAGR (2007-2014): 32.0%

Units CAGR (2007-2014): 33.9%

Competing with VoWLAN single-mode devices, DECT will represent 35% of the combined single-mode and DECT shipment in 2014

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Softphones

Picture source: Counterpath, Netphone, and Zultys

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Softphone Findings

• Growth: Introduced 1995 – Hold major potential – Default IP desktop extensions

• Main Participants: IP Telephony providers: Avaya, Cisco, Nortel, Mitel, and Siemens.

Sofphone vendors: Counterpath, Nuvoiz, and IP Blue Software Solution

• Main Customers: Travelling executives, road warriors, telecommuters, and call-center agents

• Average Price: $25-50 range per-user basis

• Major Trends:

• Major Drivers 1) The growth of IP telephony – 2) The growth of IP desktop phones

3) The flexibility of softphones - 4) The popularity of consumer soft phones

• Major Challenges & Restraints

�Improved features and services�Emergence of UC

1) QoS – 2) Softphone security – 3) Pricing pressures – 4) Lack of habit

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Softphone Forecast

Enterprise Softphone Markets: Units Shipment and Revenue Forecasts (North America), 2006-2014

Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan

0

20

40

60

80

100

120

140

160

2006 2007 2008 2009 2010 2011 2012 2013 2014

Years

Reven

ues (

$ M

illi

on

)

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

Un

its (

Mil

lio

n)

Revenues ($ Million) Units (Million)

2007 Units: 461,000 units

2007 Revenues: US$18.9 million

Revenue CAGR (2007-2014): 32.5%

Units CAGR (2007-2014): 37.1%

Roughly Softphone shipment will represent 10% of the total IP phoneshipment in 2014 (80% to IP desk phone users and 20% to non-desk phone users).

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FMC Clients

Picture source: Cicero Networks and D2 Technologies

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FMC Client Findings

• Classification: “First Level” PBX client extensions and “Second Level” FMC clients

• Growth: Vey high potential

• Main Participants: IP Telephony providers: Avaya, Cisco, Nortel, and Siemens.Soft manufacturers: Counterpath’s Firsthand, DiVitas, Agito NetworksOthers: Tango Networks, Telepo, OnRelay, and Varaha systems.

• Main Customers: Travelling executives, road warriors, and mobile professionals.

• Average Price: $50-100 range per-user basis for “First Level” PBX clients$200-300 range per phone for “Second Level” PBX clients

• Trends

• Current Market: A few hundred of thousands? No forecast available yet.

�PBX client extensions evolve into full FMC clients�MUC - a “Third Level” FMC client or not?

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Focus Points

Total Market Snapshot

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Total Forecast

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

4.50

2006 2007 2008 2009 2010 2011 2012 2013 2014

Un

its

(M

illio

n)

DECT VoWLAN Single-Mode VoWLAN Dual-Mode Softphones

Business Mobile Communications: Units Shipment Forecasts (North America), 2006-2014

Source: Frost & Sullivan

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