News Release

Cisco Systems Named Overall Leader in Packet Voice, VoIP

Latest Research Lists Cisco as #1 in both Enterprise and Service Provider Markets
Dec 11, 2001

SAN JOSE, Calif., December 11, 2001 - Cisco Systems (NASDAQ: CSCO) today announced that according to two independent market research firms, it was the worldwide market share leader in packet voice and Voice-over-IP (VoIP) equipment for the third quarter of 2001.

In the latest reports from InfoTech and Synergy Research Group, independent market research firms, Cisco was ranked #1 in the overall VoIP market, as well as in virtually all of the enterprise, LAN telephony, and IP phone market segments and in many of the service provider market segments. To date, Cisco has shipped more than 500,000 IP phones and more than 6,000,000 VoIP ports.

"Cisco is the one networking company committed to providing packet voice solutions for all customers: service providers, small and medium-sized businesses, and enterprises," said Lou Santora, vice president and general manager of the Voice Technology Group at Cisco. "Given the many different segments and product categories in the packet voice industry, we're especially pleased by our continuing leadership in the overall market, the best measure of success."

According to Synergy, in the third quarter Cisco shipped more than 50% of the total VoIP ports (equivalent telephone lines) and more than 50% of the total VoIP equipment, measured by revenue. Synergy measures packet voice unit sales and revenue in 16 different categories. Cisco is included in 12 of those categories and has been the overall VoIP leader for more than two years running.

"Cisco continues to have the broadest packet voice product line in the industry," said Jeremy Duke, founder and principal analyst, Synergy Research Group. "With products that range from individual IP phones to voice-enabled branch office systems to carrier-grade, high-end gateways and softswitches, Cisco is uniquely able to offer solutions in most segments of the VoIP market."

According to InfoTech, a leading market research firm that tracks shipments of enterprise voice communications equipment, Cisco was the leading provider in the Telephony-Enabled LAN segment of the IP-PBX market with a 61.6 percent share during the third quarter. Cisco was also the overall IP-PBX leader with a 27.6 percent market share of the total IP-PBX lines shipped during the period.

"Cisco has continued to exhibit strong growth in the IP-PBX market since taking the leadership position last year", said Frank Stinson, senior product manager, InfoTech. "In the first 9 months of 2001, Cisco has managed to increase its market share despite a steady stream of new competing products from other IP-PBX and traditional PBX manufacturers."

Cisco also has been able to maintain momentum with new customer wins. As an example, the City of Houston is one of the most recent enterprise IP telephony wins for Cisco with 600 IP phones currently in a production environment inside the city's public library. "Houston is very excited to implement this innovative, new technology to improve services for city employees while saving the taxpayers millions," said Denny Piper, CIO for the City of Houston. Piper said the City of Houston plans to deploy over 25,000 Cisco IP phones throughout its city offices by July 2002 and expects to save $5.4 million annually. Other leading corporations that use Cisco VoIP equipment include Cray, The Dow Chemical Company, H.B. Fuller, Merrill Lynch, Datek Online, and the New Zealand Ministry of Social Policy.

VoIP carriers around the world also rely on Cisco's packet voice portfolio to deliver services to their customers or employees. Among these carriers are China Unicom, Genuity, iBasis and ITXC - each of which have transported more than a billion VoIP minutes to date.

"As one of the leading VoIP service providers in the world, Genuity relies on Cisco equipment to provide the type of reliability and scalability necessary to run our distributed and highly redundant VoIP network," said John Summers, director of product strategy at Genuity. "Cisco's equipment is a key component in all of our VoIP service offerings, including our recently announced Black Rocket VoiceT service for enterprise businesses."