Cable Modem Market Closes Century on a High Note

The worldwide cable modem market displayed vigorous growth in the third quarter of 1999, with shipments of cable modems for connection to PCs reaching 833,000 units in the quarter, according to Dataquest Inc.

In the first half of 1999, cable modem shipments totaled 1.08 million units. At this rate, Dataquest analysts said they expect cable modem shipments will reach, and possibly exceed, 3 million units for 1999, with revenue expected to approach $700 million.

“The North American market remains the driving force behind the unrelenting demand for higher-speed Internet access alternatives, accounting for more than three-quarters of all modem shipments,” said Patti Reali, senior analyst for Dataquest’s e-Remote Access Worldwide program. “With the PC now morphing into a communications device in the home, the unrelenting high visibility of everything Internet, as well as the rapidly expanding market for remote teleworkers and home offices, cable modem-based Internet access offers what consumers want at a highly competitive price point.”

The number of North American cable modem subscribers surged to 1.8 million in 1999, and is expected to double by the end of 2000, according to Cahners In-Stat Group. By the end of 2002, Cahners expects more than 9.5 million broadband cable data subscribers worldwide.

“As worldwide Internet usage increases, the demand for high-speed Internet access is also increasing,” said Mike Paxton, analyst for In-Stat’s Multimedia Service. “Right now residential high-speed Internet access via the coaxial cable that provides cable TV services is the primary choice among Internet users for high-speed Net access. At the close of 1999, there were approximately 2.2 million subscribers to broadband cable data services worldwide.”

More than 110 million homes in North America are passed by a broadband coaxial cable line and more than 77 million of those homes currently subscribe to cable TV services, according to In-Stat.

According to Dataquest, the No. 1 cable modem vendor in Q3 1999 was Motorola, which shipped nearly three times as many cable modems as its nearest competitor. All of Motorola’s shipments during the third quarter were proprietary. The top vendors in the cable modem market accounted for 74 percent of all cable modem shipments in the third quarter.


Worldwide Cable Modem Shipment Estimates
(Third Quarter 1999)
Company Shipments
(thousands)
Market Share
(percent)
Motorola 310 37.2
Arris Interactive/Nortel 105 12.6
Com21 80 9.6
Terayon 69 8.2
General Instrument 59 7.1
Others 210 25.3
Total Market 833 100.0
Source: Dataquest

The market for standards-based interoperable cable modems accelerated rapidly during the quarter with shipments of DOCSIS-based modems reaching 275,000. General Instrument was the leading vendor during the quarter with 21 percent of the units shipped. It was followed by 3Com, which took 19 percent of all DOCSIS shipments. Thomson Consumer Electronics, which also manufactures digital set-top for DirectTV, was the No. 3 vendor with 18 percent of the market.

Based on the current trends, Dataquest believes cable modems based on the CableLabs standard for interoperability will take 40 percent of the total shipments in 1999. This will be the last year that cable modems based on proprietary technologies will exceed shipments of standards-based equipment. In 2000, Dataquest projects the balance will shift to 80 percent DOCSIS-based and 20 percent non-DOCSIS, which will also include the European DVB/DAVIC standard.

“Continued success for the cable modem market will depend on the rapid completion of cable broadband network upgrades to two-way communications capability, more ubiquitous cable data service availability, easier installations, and subscriber provisioning tools, expanded retail and direct distribution channels, as well as the eventual internal bundling of cable modems within PCs,” Reali said.

Related reading

hillary-clinton-text-message-signup
nurcin-erdogan-loeffler_wikipedia-definition-the-future_featured-image
pwc_experience-centre_hong-kong_featured-image
12919894_10154847711668475_3893080213398294388_n
<