News Release

For Immediate Release

Smaller Systems and New Applications Drive Strong First Quarter Sales of Business Telephone Systems
(June 15, 1998)

BEDMINSTER, New Jersey, June 15, 1998 — In like a lamb, out like a lion.  That's how you can describe the First Quarter of 1998 for the US business telephone systems market.  Despite early signs of a slowdown, manufacturers racked-up large gains in the latter half of 1Q98.  Total PBX and Key System line shipments increased 11.4% over the same period last year, resulting in sales of business telephones that reached 93,470 systems and 3.16 million telephone lines.  This as reported by The Eastern Management Group's 1Q98 Monitor Report, which tracks the sales and market share of PBX and Key/Hybrid Telephone System manufacturers.

First Quarter PBX Total Line shipments increased 10.9% over the same period last year (1Q97), with shipments of 1.67 million lines.  Lucent Technologies claimed 31% market share, followed by Nortel with 27%, Siemens with 11%, NEC with 10.8% and Mitel with 8.5%.  PBX System shipments also increased 10.6% over 1Q97, with shipments of 6,735 systems.  Major increases were seen in shipments of systems that handle 41-200 lines, indicative of the market acceptance of smaller, more robust PBX systems.

Key/Hybrid Total Line shipments increased 12% over the same period last year (1Q97), with shipments of 1.49 million lines.  Lucent Technologies continued to hold the market share lead with 23%, followed by Nortel with 17% and Toshiba with 12%.  Key/Hybrid Telephone System shipments were up 8.4% in a quarter over quarter comparison.  The strongest growth was experienced in systems that handle 11-40 lines.  In this segment, system shipments increased 28% over the same period last year.

"The Key/Hybrid Telephone System market has been experiencing the benefits of a strong economy, especially in the small business market," stated Warren Williams, Vice President and industry analyst at The Eastern Management Group.  New applications, such as scaled small Call Centers, IVR and CTI, have produced an increased awareness of the potential of using technology to support strategic business goals and more parity with larger competitor capabilities.  This awareness translated to many replacements of older systems with new feature- and function-rich systems, in addition to station (line) growth driven by increased sales and employment.

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