Cable Modem Shipments Will Rise in ’99

The predicted shift to broadband access technologies by Internet users in the US is beginning to take shape. According to Cahners In-Stat Group, cable modem unit shipments will grow by 60 percent in 1999.

Forrester Research has predicted that by 2002, 15.6 million US households will access the Internet using broadband technologies. Currently, Forrester says there are just 310,000 US households with a broadband connection.

North America drives the cable modem market, In-Stat has found, and will account for more than 50 percent of cable modem unit shipments through 2003. In 2000, unit shipment growth will increase to 120 percent as the DOCSIS standard cable modems become widely available via retail in North America.

Changes in the Data Over Cable Service Interface Specification (DOCSIS) will cause consumer confusion in North America in 1999, said Michelle Abraham, senior analyst for In-Stat’s Multimedia Service.

“The rollout to retail in North America has already been pushed into 1999 and the headache for all will be lessened if cable modem vendors wait for DOCSIS 1.1 compliant modems before selling through retail,” Abraham said. Cable modem vendors are expected to have DOCSIS 1.1 modems certified and available at retail in late 1999.

The major barrier in the migration to broadband technology has been price. According to In-Stat, cable modem average selling prices will fall each year due in part to integration among the semiconductor components enabling component cost declines. By 2003, In-Stat predicts that cable modem revenues will hit $800 million.

DSL technology is considered the main competitor to cable modems, and while research by Insight Research predicts that cable modems will have the market share lead by 2003, DSL has some advantages.

“DSL’s main advantage is that it can be marketed and sold by the local telcos to the consumer market in the same way that they market services such as call waiting,” said Robert Rosenberg, president of Insight.

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