Toshiharu Iwasa, managing director NEC Australia, said: "We will continue to engineer products with the ability to integrate new technologies based upon business needs without foregoing the reliability and functionality customers expect and judging by these latest figures the business community agree with our strategy."
Well not exactly. Statistics can always be misleading, especially when used selectively to promote one particular player, and so it is in this case. The statistics do nothing to support Iwasa's claims.
Had NEC wanted to really impress it could have talked about its market leading 24.9 percent share of the key telephone systems (KTS) market and its commanding 39.3 percent share of the PABX market (the number two player, Ericsson had only23.7 percent). The reason it did not, of course is that, in F&S analysis these are circuit-switched not IP products representing rapidly declining legacy markets (PBX sales down 7.2 percent year-on-year and KTS down 9.6 percent according to F&S). Unlike IP telephony, they are not at all sexy. However, in this sexy, IP PBX, sector of the market NEC fares nowhere near as well: a mere 5.0 percent market share in 2006 according to F&S.
So how come NEC has taken the overall market share lead? First and foremost, the lead IP telephony player Cisco (34 percent) and players two and three (Avaya with 17.1 percent and Alcatel with 12.6 percent) don't rate at all the circuit-switched technology (PBX and KTS) markets.
Secondly these legacy markets, although declining at 7.2 percent (PBX) and 9.6 percent (KTS) still account, along with circuit switched wireless PBX for half the market. In fact F&S's figures show them dipping below 50 percent in 2006 for the first time).
"As the vendors start to concentrate more on the product portfolio for the SMB segment, in terms of cost and one-box solutions, independent small and medium-sized businesses will start to take more interest in deploying IP telephony....As the next wave of business productivity improvements come due to IP telephony will increasingly become adopted across enterprises."
The real take-away from this research for NEC is this. Critical to the success of NEC and other major players in the legacy market - notably Siemens, Ericsson and Nortel with 10.8, 23.7 and 21.6 percent respectively of the PABX market - will be the rate at which they can convert these legacy customers to new IP solutions in the face of fierce competition from the likes of Cisco and Avaya and new nimble and innovative companies like Zultys and ShoreTel at the other end of the market.
A F&S observes: "...Ericsson, Nortel and Siemens...combined...have over 56.1 percent of the [PABX] market share. And they are also fast moving their customer base towards IP communication solutions."
Becoming overall market leader and increasing market share in a market which has not grown overall but where your competitors are all shifting focus, and revenue streams, to the new technologies could be a sign of failure rather than success: of not moving your sources of revenue to the new technologies as fast as your competitors.
So, rather than put out self-congratulatory press releases based on selective use of the available data, perhaps better to say nothing. Because inquisitive people like me will always dig a bit deeper.