IDC: IP telephony growing in Europe, despite obstacles

Unit sales of IP (Internet Protocol) telephones in Europe shot up 111 percent between 2000 and 2001, according to a new report by research firm International Data Corp. (IDC). But the market for the devices is still "microscopic" compared to that for traditional phones, IDC said in a statement Tuesday.

IP telephone vendors began a sales push in the latter part of last year and can expect most success, for the time being, with enterprise customers, the researchers said. IDC is predicting a compound annual growth rate of 108 percent in shipments of IP phones for the period between 2000 and 2005, with a corresponding growth in revenue of 80 percent.

But the industry can expect a tougher sale to service providers for hosted telephony, IDC warned.

"The progression of the IP telephone still has a long way to go before it is considered to be the standard desktop communication device," the researchers said.

Among the obstacles facing IP telephones are the high cost of the devices and the various competing standards, which hinder interoperability.

"It is essential that vendors work to solve issues involving standards and interoperability, and educate the market by promoting the benefits of bringing IP to the desktop via IP telephones," IDC said.

The researchers measured sales of IP telephones in 16 Western European countries.

IDC is a division of International Data Group Inc., parent company of IDG News Service.

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