Dont know if this has been discussed....
It looks like the DSL market may be going through the tornado. I dont really see any Gorilla candidates with the possible exception of Aware. They have become an IP house and have licensed a bunch of DSL chipmakers (3Com/ADI/INTC). However it seems like other companies have there own solutions and have not licensed (Alcatel/TXN).
There could be a King in the chipset market (TXN/ADI/BRCM) but it seems more likely to have a bunch of Princes.
Anyway just wanted to give people the heads up.....someone may see something I dont.
totaltele.com
Explosive DSL deployment takes analysts by surprise
By Peggy Salz-Trautman
29 November 1999
Industry analysts have been forced to increase drastically their estimates of DSL
deployment as U.S. carriers have lit the touch paper on their deployment plans.
Many in the industry had been skeptical of bullish claims by DSL chipset manufacturers,
primarily because the published market data generally suggested a deployment of few
more than half a million lines by the end of 1999 in the United States. But
announcements this month by Analog Devices, which said it had sold its 1 millionth
ADSL chipset, and Alcatel, which said it had shipped 2.4 million ADSL chips in 1999,
raised eyebrows in the industry and convinced most to readjust their market forecasts
upwards.
"The market has grown much faster than we thought it would," said Willem Verbiest,
vice president of Alcatel's DSL access business unit.
"There wasn't anything in the marketplace to say this was going to happen the way it
did," said Kathie Hackler, a principal analyst at Dataquest Inc., in San Jose, California.
The company, like many of its peers, has revised its DSL figures for 1999 as well as its
longer term forecast.
In its latest report Dataquest had forecast the delivery of over one million DSL modems
this year. It has since raised that figure to 2.3 million in 1999, and some 17 million in
2003, up from its earlier forecast of just over 10 million. Dataquest is doubling the
frequency of its own forecasts from twice yearly to quarterly to avoid being
wrong-footed again.
Tim Johnson, manager of Access@Ovum, a research service offered by Ovum Ltd., of
London, said his own forecasts, which predicted half a million lines in use in the United
States by year end, were "a couple of hundred thousand short." "The confusion about
numbers and whether [chipmakers] are telling the truth is understandable considering the
huge pipeline we [analysts] must track before actual lines are in use, and the service is
being sold to customers."
Mike Ziehl, marketing director at Analog Device's Communications Division, agreed
that growth had been difficult to estimate. "DSL is growing at such a fast pace that most
estimates can't keep up," he said. "If we would have started off the year by saying that
volumes would grow by a factor of three, no one would have believed us. But in
mid-'99 things just took off and that's exactly what happened."
Alcatel too claims to have been surprised, particularly by a huge DSL ramp up in the
United States. "Operators [in the U.S.] are installing more capacity up front than they
have users connected, and this is why a lot of wrong figures have been floating around,"
said Verbiest, whose unit is part of Alcatel's carrier data division, based in Antwerp,
Belgium.
Dave Burstein, editor of DSLprime, a specialist research newsletter that tracks DSL
deployment worldwide, claimed that "all researchers have been basically wrong" and
their data has generally been three to six months out of date. His own forecasts of
between 650,000 and 700,000 customers in the United States by the end of 1999 are
based on figures gleaned directly from the operators. He further predicts that the United
States will see "at least two million and more likely three million" subscribers by the end
of 2000. "By then, the installation backlog should be cleared and more than half of the
country will be wired," he said.
A company that came closer than most to forecasting the DSL market was Cahner's
In-Stat Group, headquartered in Newton, Massachusetts. In a recent report, In-Stat
predicts the total of DSL subscribers worldwide to increase over 150% in 1999 and
top two million new subscribers in 2000.
"It's not that the market [watchers] missed it," Dataquest's Hackler explained. "It wasn't
until the first half of the year that the RBOCs actually weighed in with a serious attempt
to market DSL."
As a result, industry analysts questioned whether operators would roll out DSL or hold
back on it as they had before, Hackler said. "And there still wouldn't be a market if
cable companies hadn't got aggressive in pushing their service at competitive prices."
Where they went wrong
It appears that analysts were wrong-footed by two factors. First some underestimated
the time it takes for a chipset to turn into an ADSL customer: So looking at the number
of lines being rolled out, they underestimated the number of chipsets that have been
built.
"An order for 1 million DSL line cards today will take at least six months to turn into a
million DSLAM ports installed at telco premises," noted Tim Johnson, manager of
Access@Ovum. "Depending on the telco's planning cycle it will probably take at least a
year before these ports are all taken up by actual customers, who will need another one
million chipsets for their DSL modems."
Meanwhile the rapid burgeoning of DSL types and applications also seems to have
caught some by surprise. One analyst claims that many forecasts have been based on
projecting from the old established use of DSL as a way for carriers to provide things
like leased lines and broadband links.
"Since DSL has emerged as a mass market service it has created a whole new market
and many analysts are still doing their calculations in the old world," he said. |
