Is the Desk Phone Dead?

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by Russell Bennett, UC Insights

January, 2011

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Introduction

For decades the office desk phone has been a key tool for business communications. Certainly, the PBX vendors made a significant proportion of their revenue from the sale of devices that evolved to become overly complex, featuring around four times as many features and buttons than anyone knew what to do with. Many IT departments railed at the $5-600 price tag that came with these phones – all of which used proprietary protocols thereby restricting customer choice and significantly raising the vendor switching cost while simultaneously failing to add value to a decades-old user experience.

With the new era of Unified Communications (UC) presenting many integrated communications modality options and related soft clients, the prediction of the death of the desk phone has been made many times. For customers of the traditional telephony vendors this was mostly wishful thinking because those vendors couldn’t afford to surrender such a large volume of revenue. However, the emergence of alternative vendors (e.g. Grandstream and SNOM), who were able to take advantage of UC standards and produce lower cost, minimal function IP phones, has added fuel to the fire.

Is there still a need for a desk phone?

For many years, telephony has been in decline in favor of other forms of communication, most notably email. Whether a given employee still needs a desk phone depends on a range of factors:

• Does the employee work at a desk?

• If so, do they work on company premises or elsewhere (e.g. telecommuters?)

• If not, do they work on company premises (e.g. factory floor workers, retail workers) or are they mobile (e.g. service and installation technicians)

• Does the employee have their own office or are they in an open-plan office?

• Has the employer deployed UC and is the employee in question UC enabled?

• Does the employee use a PC; either desktop or laptop?

Another way of looking at this question is the degree to which telecommunications is a part of the employee’s duties.

Clearly the employee’s work situation presents various communications challenges but each case has well-understood telephony options. The target market for traditional desk phones is the segment of workers that has access to a corporate (LAN or telephony) network and typically works in an open plan office (thereby obviating the use of speaker phones) with wide area collaboration needs: contact center staff being the classic example. With the advent of UC, the desk worker’s alternatives to telephony have grown in terms of increased utility (e.g. data collaboration, desktop video conferencing) and dramatically reduced cost. The non-desk-workers are increasingly finding their options are expanding, e.g.:

• Highly sophisticated mobile devices;

• Traditional radio networks;

• ‘Push to Talk’ devices;

• UC modalities over WAN.

As UC systems develop better integration with non-desk workers’ communications options, then UC will continue to gain market penetration and usage of the traditional desk phone will decline proportionately.

What would replace the desk phone?

The desk phone

This slightly facetious response is another way of saying that existing desk phones won’t be upgraded as new communications infrastructures are deployed. Clearly, an IT department isn’t going to consider replacing a $600 phone until the full value of it has been written down on the balance sheet. In the meantime, traditional vendors will be pressed to support older phone models as long as they are able. Where this is not possible (e.g. when an enterprise converts to UC or switches vendors) then various telephony and IP gateways will facilitate the integration of older phones into newer systems; albeit with a potential loss of advanced functionality (which was normally not used in any case).

In the current economic climate, it is highly likely that an enterprise owns many more phones than it has employees. However, we should consider the case where a newer desk phone is required, e.g.:

• When occupying new premises with no telephony network in place;

• When the IT department does not have excess telephone inventory and the employee needs/prefers a desk phone;

• When the economics of newer phones outweighs the integration costs of older phones.

In these circumstances, lower cost desk phone options will be evaluated. The UC vendors have created their own lines of low cost desk phones in the $100-$250 range. Also, products from the independent vendors are gaining traction in the enterprise UC space and are even cheaper: $75-$125.

Hands free devices: speaker phones and headsets running on PCs

Telecommunications in a business context often requires multi-tasking; at the very least, taking notes: so the need to keep one’s hands free obviates the use of the telephone hand set. Using the speaker phone feature of a traditional desk phone is often the preferred option where the caller has their own office, with the headset being the open-plan office alternative. The UC era has brought about the creation of both individual USB speakerphones and headsets/ear-buds that are optimized for UC broad band codecs. Clearly both types of device needs a ‘telephone’ to attach to – but a softphone running on a UC-optimized PC provides a better user experience than a desk phone.

The advantages of the UC user experience over traditional telephony have been well documented elsewhere. However, in terms of the audio user experience it is useful to note that the frequency range of the human voice is roughly 0-18kHz, whereas traditional telephony captures the frequency range 0–4kHz. Over longer duration calls (e.g. conference calls) and in poor network conditions, listening to traditional telephony induces fatigue and limits the discrimination of sounds at higher voice frequencies. UC clients often employ advanced audio codecs to overcome the challenges of maintaining high audio quality over poor network conditions. These codecs typically span 8kHz (narrow band) but some UC vendors have deployed 16kHz (wide band) codecs. However, for calls that terminate or originate on the PSTN, these benefits are lost.

The ‘final frontier’ for the improved softphone user experience would be the effective removal of ‘typing noises’ from the conversation – something that could never be done by a desk phone. In the same way that an IP client can detect and cancel echo and feedback, the detection of a key strike by the PC could, theoretically, be used to remove typing noises far better than the mute button ever would (I am sure that I am not unique in my ability to type while talking or to talk while on mute...). Early attempts to cancel typing noise typically generated ‘audio artifacts’ (i.e. random noise in the signal) but progress on this front is being made.

Mobile phones

Clearly the mobile phone provides telephony whenever the user has no desk or is away from the desk. IP-PBX systems started the integration of mobile phones into the corporate communications network with traditional ‘Fixed Mobile Convergence’ (FMC) features. FMC continues to be a feature in UC systems, but the integration of mobile devices has much greater potential with UC. There remain significant impediments to the realization of this potential as discussed in an earlier paper; however also discussed are the economic drivers for the use of personally-liable mobile phones in place of corporate devices. If the functions required of the mobile device are those of basic telephony, then standard FMC features will allow the replacement of a desk phone with a mobile phone with significant cost savings and increased utility (in the case of a smart phone) even while the user is at the desk.

‘Tablets’ and Video-calling

Many executives have found the value of a personal video conference device to be compelling. These are typically highly expensive devices ($5-10,000+) and while the ISDN call set-up user experience is poor, the integration of these devices with UC is largely mitigating this problem. Additionally, leveraging the network effect of attaching to UC desktop video clients has significantly increased the utility of personal video device as an alternative to the desk phone.

I have long held the opinion that video calls would replace voice calls as soon as a rich, economically viable user experience becomes the norm. The latest event in the rise of personal video conferencing is the emergence of the tablet device into the realm of UC clients. Starting with the Apple iPhone and iPad featuring the Facetime app, Cisco (with the Cius) and Avaya (with the Flare) were quick to realize the potential of this class of device to provide an alternative to the desk phone, the mobile phone and even the PC. Of course, video conferencing has long been a UC modality on both the desktop PC and, with the integration of miniaturized webcams, the laptop also. In my mobile UC paper referred to above, I predicted that the combination of video and other UC modalities implemented on the mobile data networks is going to be the killer app for tablets, and it turns out that Cisco has recently announced upcoming support for the Cius on the Verizon 4G network. The current prices for these UC tablets are too high for mainstream adoption, but clearly the price will fall to within the range of the consumer-oriented tablets if volumes increase.

Certainly, the question of ‘what would replace the desk phone’ applies not only to the device itself but also the revenue stream for the communications vendors. Per above, desk phone sales represent approximately 50% of the purchase price of telephony and approximately 1/3 of total revenue (with infrastructure and service/maintenance representing the other two thirds). If tablets gain market share and prices fall (the two go hand-in-hand in my view) then tablet revenues could replace desk phone revenues; otherwise the some vendors will have to adapt their financial plans accordingly.

So, is the desk phone dead?

If the user experience of the latest corporate communications devices (e.g. smart phones, tablets and laptops) is an order of magnitude better than the desk phone for a comparable price, then this is a fair question to ask. If a UC device:

• Works as well in the roaming scenario (i.e. using a 4G network) as it does in the office (i.e. using the WiFi/Ethernet network)

• Could also be a personal mobile device (i.e. dual mode with dual SIM cards)

...then that would be the final nail in the coffin of the traditional desk phone. However, we aren’t quite there yet.

For desk-bound employees, the traditional desk phone is not dead so long as UC remains unavailable and phones remain on the corporate inventory. When there is a need to purchase a new desk phone, it is unlikely to be a traditional $5-600 desk phone. Where UC has been deployed, the remaining days of life for each individual desk phone approximates to its remaining depreciation time on the balance sheet.

The rumors of the demise of the traditional desk phone have been somewhat exaggerated but, within the next 2 years, the market for these devices will probably only exist on eBay.

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