Cable modems takes lead over DSL, but component shortages haunt OEMs
Semiconductor Business News
(10/04/00, 10:54:36 AM EDT)
SAN JOSE -- In the race to bring high-speed broadband services to the masses, cable modems continues to hold a commanding lead over the rival Digital Subscriber Line (DSL) technology.
But shortages of key components is beginning to haunt suppliers of cable-modem products, as OEMs are scrambling to get their hands on radio-frequency (RF) tuners, flash memories, and other products.
"Given constraints on the availability of radio-frequency tuners, flash memory, among other components, most [cable-modem] vendors reported that they could have shipped at least 30% to 35% more units [in the second quarter] in the face of unquenchable worldwide demand for broadband cable access devices," said Patti Reali, who tracks the industry for Dataquest Inc. in San Jose.
"Vendors that diversified their component sourcing were able to meet demand and picked up the slack from vendors that could not deliver against demand," Reali said.
Reali predicts that there will be some easing of component shortages for the remainder of this year. If so, the cable-modem business could grow 40% next quarter and 45% in the fourth quarter of 2000, she said.
In total, worldwide cable-modem shipments could reach 10 million units by the end of 2000, she added.
At present, cable-modem services have a commanding lead over DSL. As of the end of 1999, the cable-modem industry had 2.1 million subscribers in the United States alone, while DSL only had a "half-million" subscribers, according to Allied Business Intelligence Inc. (ABI), a market research house in Oyster Bay, N.Y.
"Subscribers to data-over-cable services will increase from 3.3 million subscribers worldwide in 1999 to 58.6 million subscribers worldwide in 2005, a compound annual growth rate of 61%," said Joshua Wise, who tracks the industry for ABI.
This increase is led by the booming U.S. market. In total, U.S. cable-modem subscribers will jump from 2.1 million in 1999 to 14 million in 2005, a compound annual growth rate of 37%, according to ABI.
Cable-modem technology has been the leader in the broadband technology race, due in part to its earlier market entry, ABI said. Cable's continued growth will stay primarily within the residential arena, but there will be a small minority of businesses that will be embrace the technology, they added.
Cable will maintain its number one position in the residential market due to its ease of installation. Cable networks, unlike phone lines, generally do not present "line qualification" problems, which may delay, or even prevent, DSL installation, ABI said. |
