Worldwide PBX/KTS revenue dropped 12% to $1.5 bln between Q4 2004 and Q1 2005, but is 2% higher than a year ago, says Infonetics Research. The number of PBX/KTS lines shipped worldwide decreased to 6.3 mln in Q1 2005, 15% lower than in Q4 2004. The market will bounce back to $1.7 bln by Q1 2006 as the market continues to move towards IP voice technology and benefit from an improving economy. Pure IP is the only PBX category to beat the budget blues in Q1 2005, increasing 10% to $223 mln, 36% higher than a year ago. Revenue is forecast to jump another 24% to $277 mln in Q1 2006. Pure IP and hybrid system revenue together total $1 bln. TDM system revenue sank 20% and hybrid system revenue dropped 13% in Q1 2005. Hybrid system revenue, which accounts for the majority of worldwide PBX/KTS revenue, is expected to recover and increase 25% by Q1 2006. The TDM segment, on the other hand, is expected to account for an increasingly smaller slice of the pie in the coming years. Most vendors recognize the shift in the market towards IP and have moved their products accordingly. The TDM segment, which still accounted for half the market at the end of 2003, is now less than a third.