Sales of Net phone gear surge on VoIP

Worldwide sales of Internet phone equipment rose 31 percent in the last three months of 2003 and could triple by 2007, as demand surges for voice over Internet Protocol gear, according to analyst firm Infonetics Research.

During the next year or so, demand for so-called voice over Internet Protocol (VoIP) equipment will rise, as AT&T, BT, France Telecom, SBC Communications, Verizon Communications and other service providers begin selling Internet phone services, Kevin Mitchell, an analyst at Infonetics Research, said Monday.

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Corporations, telephone service providers and home phone users are, at various paces, replacing phones that rely on the decades-old circuit-switched networks with less-expensive equipment and services that use VoIP, which relies on IP, the most popular method for sending data from one computer to another.

"It shows that VoIP is in their plans and creates momentum," according to Mitchell.

Revenue in the industry will, in the short term, be influenced by a preference among corporations, government entities and telephone service providers to use a mixture of old and new phone equipment, Infonetics said.

 Strong sales of Internet telephony hardware predicted for 2004

Cisco Systems and VoIP upstarts such as Shoreline Communications and Veraz Networks sell "pure" Internet-based voice systems that completely bypass the traditional phone network. Long-established voice players such as Nortel Networks, Avaya and Siemens are responding to the VoIP threat with hybrid systems that incorporate both traditional phone and IP elements.

Infonetics found that phone lines shipped using a mix of telephone and IP phone technology accounted for 68 percent of all IP lines in 2003. But pure IP lines were up 29 percent from 2002, the research firm said.