Bedminster, NJ, September 3, 1999 - Sales of business telephone systems increased slightly in the second quarter of 1999, and once again showed that the traditional business telephone systems are not dead yet in spite of the continuous talk about Voice over Internet Protocol (VoIP).

U.S. sales increased to 4.04 million lines in the second quarter, representing a 0.2% increase compared to the previous reporting period. Analysis of quarter over quarter growth indicates that Total New Lines increased 2.6% and Add-On Lines decreased 6%. At the same time, sales of Systems increased by 1.9%, indicating continuous growth in the market for business telephone systems otherwise known as PBX and Key/Hybrid Systems. This is as reported in the newly released 2Q99 Monitorsm Report, prepared by The Eastern Management Group.

PBX Market Analysis

Total PBX System shipments rose 4.3% over the prior reporting period with a total of 8,814 Systems shipped. Second quarter 1999 PBX Total Line shipments decreased 2.7% over first quarter 1999 resulting in 2.1 million Lines shipped.

Lucent captured the number one position in Total Lines sold with a 33.2% market share and the number two position in Systems sold with a market share of 23.6%.

Nortel held the number one spot in Systems sold with a market share of 24.8% and had a strong number two position in Total Lines with a market share of 31.7%.

Mitel claimed the number three spot in Systems with 16.6% of the market, followed by NEC with 11.4% market share. Siemens was number three in Total Lines sold with 8.5% of the market. Mitel and NEC were next with 7.5% and 7.1% respectively.

Key / Hybrid Market Analysis

Sales of smaller phone systems known as Key/Hybrid Systems were up 1.7% over last period with a total of 103,161 Systems shipped. Total Stations (lines) experienced a significantly stronger growth of 3.6% to 1.92 million over the first quarter.

Lucent once again secured the number one spot in sales of both Total Stations and Systems with a 23.8% and a 25.2% market share respectively. Nortel was a strong number two with 22% of the Total Stations market and 20.5% of the Systems market. Panasonic experienced robust growth in the Systems market and was number three with a market share of 10.7%. Inter-Tel remained in the number three position for Total Stations with 9.9% of the market.

Other strong performers in the Systems market were Nitsuko with 8.3% of the market and Inter-Tel with 7.4%. Toshiba and Comdial did well in the Total Stations market with 8.8% and 6% of the market respectively.

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