IDC: VoIP and Wireless LAN to Grow through 2009

A pair of recently published IDC Vertical Market forecasts project continued growth for VoIP and WLAN equipment in the U.S. from 2005 through 2009.

IDC has forecast WLAN equipment spending to show a five year compound annual growth rate (CAGR) of almost 20 percent within each sector. Retail industry spending on IP PBX equipment is expected to grow at a 7.6 percent CAGR between 2005 and 2009

Dan Corsetti, senior analyst in Vertical Market Research, explained that spending on IP PBX equipment by retailers is in an effort to improve communications between branch locations and headquarters, between branch offices, and with suppliers, in order to address difficult inventory management issues.

“Retailers’ overall business objective is reducing costs to protect slim margins,” Corsetti told “However, navigating the precarious balance between reducing out-of-stocks while simultaneously reducing inventories is an inventory management challenge that demands the features and functionality IP PBX equipment can provide.”

The largest spenders on IP telephony and WLAN equipment in 2004 was government. According to IDC, government spent $118 million on IP telephony equipment and $100 million on WLAN.

In the category of government spending IDC includes federal, state, and local government agencies, as well as public libraries and other state-owned entities. “Spending on IP PBX equipment is high due to the overall size and scope of the government and efforts to improve communications between distributed offices,” Corsetti said.

Government isn’t the only big spender on IP telephony though.

During 2004, the communications vertical spent $134.2 million on IP PBX equipment in 2004, financial services (capital research and investment services) spent $103.2, and professional services (consulting, legal, engineering, etc) spent $102.5.

“Most of this is driven by efforts to improve the timely dissemination of information between offices,” Corsetti said.

In contrast with IP telephony spending, WLAN spending according to Corsetti is driven by efforts to provide guest networking and connecting people that were never connected before. WLAN spending within communication was $95.2 million and discrete manufacturing was pegged at $79.4 million. However, the fastest spending growth rate is expected in professional services (19.6 percent CAGR), and personal services (19.1 percent CAGR) over the next five years.

The main growth driver for WLAN will not be delivering basic connectivity. Enterprises will need to identify secondary cost drivers beyond basic connectivity and provide data-driven, mission-critical applications like fixed-mobile convergence and wireless voice solutions.

IDC’s mechanism for researching the WLAN and IP telephony equipment markets was a 3,500-respondent survey of IT professionals that was completed in the first half of 2005. Corsetti explained that the survey was then weighed against 11 million firmographic records to develop industry composites. Forecasts are based on number of companies, forecast revenue growth rates, change in spending as documented in end-user surveys, and trends in technology adoption.

“As the first forecasts for each of these markets, everything is a bit of a surprise,” Corsetti told “IT equipment vendors typically have only limited direct exposure to their customer base due to the two-tiered distribution model.”

“The size and scope of this series of end user survey work has offered us unique visibility into the buying patterns of enterprises in the U.S,” he added.

Latest Articles

Follow Us On Social Media

Explore More