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Broadband Goes Boom

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Broadband boom, world wide continues. The latest data on sales of broadband modems, routers and gateways shows that slowly but surely we are all living an always-on connected life. Infonetics Research says that the revenue for broadband modems, routers, and gateways totaled $4.6 billion in 2004, up 15% from 2003, and units totaled 73 million, up 74%. The increase in unit shipmets is far higher than the dollar figures, which shows two things – broadband is booming, and cost of equipment has nosedived making it very difficult for anyone but the Asians to make money in this high commoditized business. Projections reflect this trend in a more stark light. Unit shipments are projected to soar 191% to almost 200 million and revenue will grow 28% to $5.6 billion between 2004 and 2008. Data shows that world wide, DSL is the preferred medium of broadband access. D-Link leads the overall broadband modem, router, and gateway revenue leaderboard in 4Q04, just ahead of Thomson; Motorola claims third place, ahead of Cisco-Linksys and Siemens, which are tied for fourth spot. Notably, one time DSL modem leader Alcatel is not in the list, reflecting the fact, that Alcatel has wisely decided to move on from this money losing business.

3 Responses to “Broadband Goes Boom”

  1. K,C. Watson

    Interesting statistics, Om…but what is the answer for broadband penetration in potentially gigantic markets like India and China?

    From what my Indian colleagues tell me, relatives in tech capital Bangalore wait months on end to get “broadband” via cable only to get choppy, mostly sub-dialup speeds. DSL in both countries is a pipe dream as phoneline coverage is in the 5-10% range. Cable penetration is a joke and WiMax reality seems to be some years off.

    So even if last mile gear costs continue to drop, how will these sleeping giants enter the broadband game without a long-haul network to speak of?


  2. JC, good point – i had almost forgotten about the sale of Alcatel DSL modem business to Thomson – somehow the memory is not what it used to be. i am sure you guys are making money, but the way the volume shipments are increasing and prices falling, not many folks could be making money in this market. not sure what you think of that.

  3. 1. The reason why Alcatel is not in the list is simply that Alcatel sold their DSL modem division and the SpeedTouch brand to Thomson in 2001.

    2. While a growing number of manufacturers struggle indeed to be profitable it this market, it is a stretch to call it money losing as a whole. I am product marketing manager for SpeedTouch ADSL modems and I can guarantee you that we are profitable and have been ever since we started in this business.