Boom Times Ahead For DSP Chips Targeting Internet Telephony Apps
By Mark Long -- e-inSITE, 4/19/2002
Forward Concepts has unleashed a new market research report that details the market opportunities for DSP chips used in media gateways, customer premises equipment (CPE) of several types and wireless applications.
Entitled "VoIP & Packet Voice DSP Markets," the new study confirms that the telecom market is still in a recovery mode after going through a severe downturn last year. Among the bright spots in an otherwise dismal market, Internet Protocol (IP) PBX systems and associated IP phones began to take off dramatically, growing over 100 percent in 2001.
Forward Concepts projects that this particular market segment will continue to shine well in the future. In addition, the packet voice equipment market has almost completed the changeover from frame relay to VoIP implementation, claims the report, which projects that channel/port shipments will grow at a 116 percent compound annual rate from 12 million channels in 2001 to 560 million channels in 2006.
Wireless will constitute the largest VoIP market by 2006, claims report author Will Strauss, primarily in cellular applications as opposed to today's small wireless IP Telephony market, which is primarily based on WLANs and wireless local loop (WLL) implementations. The report also forecasts that the value of DSP chips and chipsets for VoIP will grow from $129 million last year to $1.4 billion in 2006, which represents a compound growth rate of 61 percent.
According to the report, media gateways and remote access concentrators currently account for the bulk of the market, with wire-line CPE markets well ahead of wireless. In addition, the report also addresses other CPE packet voice markets, including voice over cable (VoCable) and voice over DSL (VoDSL), including the integrated access devices (IADs) necessary for their implementation.
With the introduction of multi-line DSPs, called access communication processors (ACPs), the average port count per chip for media gateways and remote access concentrators (RACs) should increase from an average of 4.4 G.711 channels per chip to 88 channels per chip over the forecast period. Although the study estimates that the average selling price of chips and bundled software for the media gateway and RAC markets will grow at a 55 percent compound annual rate from $25 to $225 between now and 2006, the chip cost per channel is expected to decline at a rate of about 15 percent per year.
"Unlike other reports that forecast billions of minutes of packet voice use, this report is focused on hardware and chip implementation, including port and channel counts for virtually all VoIP equipment," said principal consultant and report author Will Strauss. "Although system revenues are included, it is the value of DSP chip technology in each of the many applications that is emphasized."
Earlier this week, In-Stat/MDR released its own DSP report, which forecasts that the evolution of wireless connectivity to support increased system capacities, improved voice quality, multimedia services, and high-speed data transfers is expected to drive annual revenue for digital signal processor (DSP) and microprocessor unit (MPU) high-end processors for base transceiver stations (BTSs) toward the billion dollar mark by 2005. To claim their share of the market, processor vendors must deliver economical systems via DSP and MPU chips that provide improved performance and reduced power dissipation, advises the research firm.
"Although a large number of BTSs have been built and installed, new BTSs and continuing improvements in data communications are requiring ever-increasing DSP and MPU performance levels, faster memory, greater flexibility, and higher integration," said Max Baron, a principal analyst at In-Stat/MDR.
Entitled "Digital Engines in Base Transceiver Stations," the new In-Stat/MDR study also projects that worldwide DSP shipments for end-use in BTSs will increase from approximately 2.8 million units in 2000, to 7.0 million by 2005. During the same period MPU shipments will increase from approximately 0.8 million to 2.4 million units. DSP unit increases during this period will involve new BTS shipments and upgrades of service using CDMA. In addition, Software Defined Radio (SDR), radiated power control, and adaptive methods for minimizing errors as well as an increasing number of concurrent users are all expected to fuel the demand for additional chip implementations.
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