End-user segments drive VoIP semiconductor market

MUMBAI: The voice over Internet protocol (VoIP) semiconductor market is witnessing very high growth in all the end-user segments such as carrier infrastructure, enterprise, and consumer or residential markets. There is also a trend toward integration and this results in the need for a high-performance, low-power and cost-effective solution. In order to understand the changing market dynamics, it is imperative for vendors to have strategic relationship with customers.

New analysis from Frost & Sullivan on World VoIP Semiconductor Markets, reveals that the market earned revenues of $256.2 million in 2005 and estimates to reach $857.8 million in 2009.

"An important driver for this market is that the VoIP technology has become mainstream in the industry and semiconductor technology has improved by large, pushing down costs, making it an attractive and affordable proposition," says Frost & Sullivan Research Analyst T. Govind Krishna Kumar. "Mainly service providers and carriers who are investing huge amounts to upgrade their existing networks, and are switching from voice-centric circuit-switched networks to packet-based IP networks have been driving this growth."

Due to an increase in competition, the carriers and service providers wanting to reduce capital expenditure (CAPEX) and operational expenditure (OPEX) and generate new revenue sources are driving the next-generation carrier infrastructure VoIP market. Carrier DSL and broadband networks also utilize VoIP packet gateways to act as an interface to public switched telephone networks (PSTN). This transition is taking place in mobile networks as well, where voice transcoding is necessary to convert voice coding applicable in wireless networks to that applicable in PSTN.

As equipment and handset manufacturers add more features in products such as residential gateways and IP phones, integration is likely to be a significant challenge for a semiconductor vendor. For example, the integration of a large number of residential gateway products with wireless local area network (WLAN) and VoIP capability, and in future, integration of video functionality with gateway products is likely. The majority of handset manufacturers have announced dual-mode cellular or wireless fidelity (Wi-Fi) phones and such products are pressurizing the semiconductor vendors to improve power consumption performance of their solutions.

"With increasing complexity of residential gateway and IP phone products, semiconductor vendors face the challenge to deliver high-performance and cost-effective solutions, while integrating all these functionalities on a single chip," explains Govind. "In addition, to enter the customer premise equipment (CPE) gateway market, semiconductor vendors face tremendous cost pressure."

CIOL Bureau