My latest briefing-Europe Enterprise Telephony Market Update Q1, 2006

I am taking the liberty to post my briefing that was free to attend. The customer premise PBX equipment market is growing faster in Europe than it did the same quarter last year and I am expecting a surge in growing following a dull year of 2005.

Siemens Com emerged as the market leader followed closely by Alcatel. I attribute Siemens emergence as a market leader to France's poor uptake. Alcatel lost close to 2% due to the very low uptake in the French market.

Another interesting trend is the price pressure. The market seems to emulate vegetable selling as prices continue to drop alarmingly. Last year saw system and line prices drop at an average of 9% and this year, I am expecting it to fall by some 11%. With cost to sale remaining the same or increasing, vendors have to look at new markets to grow their bottomline.

Finally, vendors don't seem to enjoy good financial health in this industry. Nortel reported a 0.4% opearting margin although their gross margin was close to 40%. Siemens Com is a price player today, their operating margin loom at a low of 3%, while Alcatel with its large indirect sales force enjoys a healthy margin of 11%. The highest margin amongst the vendors is reported by Cisco, whose products aren't cheap.