The SIP Phone Market in 2023

Everything you need to know about SIP phones

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Meeting Rooms and DevicesInsights

Published: June 5, 2023

Robbie Pleasant

Robbie Pleasant

In today’s work of AI, softphones, virtual meetings, and software as a service, IP phones might seem uninteresting, even outdated. But the IP phone remains an important aspect of today’s business communications. After all, IP phones are important parts of voice communications, and use the Internet to connect with other endpoints, so they are far from obsolete.

There are two kinds of IP phones on the market today: IP phones that use H.323 signaling protocols, and SIP phones that use a powerful protocol to connect with IP communication platforms.

SIP phones are far more popular these days, operating in both cloud and premise-based environments. Despite predictions that endpoint hardware is on its way out, the SIP phone market is still rising and shows no signs of slowing.

With that in mind, let’s take a look at SIP phones, the SIP landscape, and how the market looks in 2023 (and beyond).

SIP Phones Explained

First off, it’s important to understand what a SIP phone is and how it works. A SIP phone is a specific type of phone that uses an open-standard solution called SIP (Session Initiation Protocol) to handle calls. While traditional phones use phone lines and cellular connections for voice calls, SIP devices transfer data using the Internet Protocol network.

SIP phones send data through the IP network to connect over the internet with VoIP or Unified Communications software and clients. While this is typically voice data, SIP phones can also carry out multi-media conversations, including video, messages, and files.

SIP phones are typically considered hardware or endpoint solutions, as they’re typically designed to look like regular telephones, albeit telephones with IP-aware components. They can connect to IP networks using either ethernet cables or WiFi, and can access cordless technology called DECT (Digital Enhanced Cordless Telecommunications), which is commonly used for landline phones.

However, softphones can also be considered SIP phones. SIP softphones are software that provide telephone functionality, so employees can use their computers or personal devices to make and receive SIP calls.

Trends in the SIP Phone Market Today

Modern SIP phones are continuing to develop, and the market continues to grow. Research from MarketWatch indicates that the SIP phone market is expected to grow by 8.8% annually from 2023 to 2030. However, businesses providing SIP phones still need to remain innovative and keep up with market demands in order to grow with the market.

The increasing popularity of VoIP has helped propel the growth of SIP phones, and demand is expected to increase due to their growing features, cost-effectiveness, and call quality. Remote work has also fueled the growth of SIP phones, as they’re useful tools for remote employees who can’t use their personal devices for business calls.

GlobeNewsWire also notes that the IP phone market has seen growth from growing investments in wireless communication technology, and increased rivalry among internet and communication service providers has helped fuel the expansion.

However, several challenges still remain. The lack of location tracking for emergency calls is often cited as an issue for the IP phone market, and its reliance on the internet means that low bandwidth or subpar routers can create issues for SIP phones. While these problems are being addressed with each new device and update, they remain points of concern for vendors and users.

Price sensitivity is another key challenge in the SIP phone market. SIP phone vendors need to be able to offer features that can compete with UCaaS solutions and other communication platforms on a piece of hardware while keeping the prices equally competitive. This has led to vendors offering new features and capabilities at lower prices than competitors, as well as experimenting with offerings like subscription-based payment plans and professional support services.

In fact, managed service providers have been growing in popularity, as they offer benefits like managed WAN and security while providing incremental income for SIP providers. Full-service providers, similarly, provide a wide selection of services for customers looking to invest in their SIP phones.

Innovation in SIP Phones

The technology behind SIP phones continues to develop, and as new communication tools and features are released, many are integrated into existing phones. SIP phones need to keep innovating and evolving to keep up with current trends and demands, especially with increased competition from UCaaS solutions, softphones, and other virtual calling solutions, which means including modern features like:

  • Integrations with collaboration platforms like Zoom and Microsoft Teams, so that SIP phone users can join virtual meetings from their devices, and keep all their tools on a single device.
  • Smartphone-like experiences even on hardware devices, through features like touchscreen displays and built-in apps.
  • AI components, such as built-in intelligent assistants that use voice commands, intelligent algorithms to track metrics and data usage, and similar built-in features that utilize artificial intelligence to improve the calling experience.
  • Enhanced security designed to meet the security standards and regulations of a wide range of industries, on devices built from the ground up with security as a priority.
  • Enterprise-grade performance, including features such as intelligent noise cancelation, power-saving, and high-quality audio. This is essential for SIP phones that want to remain competitive.

Today’s workforce expects SIP phones to be as feature-rich, easy-to-use, and immersive as their personal devices, which has helped drive the transformation of SIP phones to add new features and smartphone-like capabilities. Vendors are frequently testing and adding new features to achieve this level of usability, including the ability to integrate smartphones and SIP phones and connect to virtual conferencing platforms.

Why SIP Phones Aren’t Going Anywhere

Even as communication becomes more and more virtual, phones will always be an important part of the business communication environment. SIP phones remain a valuable (and cost-effective) way to connect and communicate, especially as new UC features get added to the phones.

SIP presents businesses with affordable and powerful communication technology, providing excellent continuity for conversations, low maintenance costs, modern communications features, and high-quality communications at a competitive price. So, while SIP phones may feel like an older communications tool, they remain up-to-date and an important part of the communications stack. As a result, the SIP phone market continues to grow.

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