Enterprise desktop phones face growing competition from wireless handsets, but they aren't going the way of the typewriter just yet.

Mobile phones, already ubiquitous, are now being joined by Wi-Fi handsets and dual-mode devices as popular tools for workers to stay connected. Features that consumers take for granted on their mobile phones, such as call history, text messaging and a wide variety of ringtones, frequently are missing or harder to find on a desktop set. Softphone clients on PCs, another alternative to desk phones, are gaining more capabilities and generally can work more easily with applications than a desk phone. But as enterprises embrace a new generation of telephony based on IP (Internet Protocol), they're still buying desktop phones, users and analysts say.

The new wave of IP wired sets comes as wireless options proliferate. Cisco, Avaya and other major telephony vendors showed off numerous Wi-Fi business phones at the recent Interop trade show in Las Vegas. For employees on the road, there are dual-mode phones that can work with IP PBXs (private branch exchanges) for features such as extension dialing and can get better coverage in the office by switching to Wi-Fi. New software also can bring mobile-only phones into the PBX fold.

In this light, increasingly elaborate desktop IP phones that often are more expensive than wireless devices are coming under fire.

"Why does my US$200 mobile phone have ten times the functionality of my thousand-dollar IP phone?" remarked Yankee Group networking analyst Zeus Kerravala.

"Desk phones are 50-year-old dinosaurs. They shouldn't be there anymore," said Gartner mobility analyst Ken Dulaney. "All the desk phone does is forward calls to mobile phones."

Yet Dell'Oro Group estimates the market for IP desk phones will boom in the coming years. The market research company said 11.3 million were sold last year and the number will rise to 34 million in 2010. The growth will come even as PC softphone sales grow from 2.6 million to 8.6 million, said analyst Alan Weckel. While strictly Wi-Fi phones will settle into vertical markets such as hospitals, which restrict mobile phone use, dual-mode phones will also be popular, he said.

Hanging on to the desk set is partly a matter of tradition.

"People still relate to their physical phone. It's like their office space. It's very near and dear to their hearts," said a network administrator for a large Canadian engineering company, who attended Interop and asked not to be named. The company recently bought about 2000 desk phones from Nortel as part of a migration to IP telephony. Because it was buying in volume, the company got each set for about $200. It was one easy choice for an IT department that has plenty of more complicated issues to figure out, he said.

Wired phones still tend to have better sound quality than wireless, vendors and analysts said. In some cases, they include more phone-system features than their wireless counterparts. And for softphones, the PC's reliability and startup time are issues, Weckel said.

The right choice may depend on the user and the setting: dual-mode phones plus laptop softphones for employees who travel frequently, and dedicated phones for workplaces without PCs. For example, Zeus Nestora, a Subway sandwich-shop franchisee in Tucson, Arizona, uses Cisco IP phones in its stores for a variety of functions, including employees clocking in and out.

But while they continue to sell desk phones, major vendors are pushing alternatives. Cisco provides software for Nokia E-Series dual-mode phones that extend office phone system functions to the handsets. The phones are already available in Europe through Orange and TeliaSonera, and in Japan through NTT DoCoMo, said Chris Kozup, mobility solutions marketing manager at Cisco. US mobile operators are still unsure about the business model for such phones, which could make enterprises more loyal but also cut down on call revenue, he said. Avaya also is working with mobile phone vendors on making dual-mode handsets work with its software and will reach more phones through its acquisition of Traverse Networks last year, said product manager Jamie Lawson.

"The future is going to be a future of choices," said analyst Elizabeth Herrell of Forrester Research. However, no one wants to have four phones, she said. One solution may be base stations that turn wireless phones into desk phones while an employee is at the desk. Neither of the two biggest IP phone makers has quite embraced this idea, however. Cisco has a cradle that charges its 7921G Wi-Fi phone and acts as a speakerphone, but the calls still go wireless. Avaya lets users treat a mobile and a fixed phone as one, so when one is off the hook the other is too.

Desk phones can't go away overnight, if only because of an installed base estimated by IDC at about 500 million. Even Gartner's Dulaney thinks it will take five to seven years for wireless office phones to replace wired. In the end, users will have to push vendors to change course, Forrester's Herrell said.

"No one's going to walk away from that revenue stream of business phones until the users decide they don't want it," she said.