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To: John Rieman who wrote (33570)	6/2/1998 9:09:00 PM
From: .com	Respond to of 50808

Sales Of Digital Chips To Triple In '99 (06/01/98; 10:56 a.m. ET) By Staff, Semiconductor Business News Sales of digital chips to drive high-speed digital modems are predicted to triple this year, according to one analyst's report released in New Tripoli, Pa., Friday. But though strong growth is expected for cable modems and asymmetric digital subscriber line (ADSL) devices, sales of both will likely be surpassed by strong demand for 56-kilobit-per-second analog modems. "Although the v.90 standard for 56K modems has now been established, growth will be overshadowed by the utilization of cable and ADSL modems for Internet connection," said Robert Castellano, president of market research company The Information Network. "Nevertheless, 56K analog modems will far outsell digital in 1998." Castellano said he predicts 26.4 million 56K modems will fly off the retail shelves this year, compared with just 640,000 cable modem systems and 730,000 ADSL units. Shipments of ISDN modems will reach 683,000, but he said he expects to see those numbers stalling as the technology is supplanted by the faster cable and ADSL formats. The overall market for cable and ADSL modem chips will grow from $34.7 million last year to $103.2 million this year. The fastest growth is in the ADSL segment, which was almost zero a year ago and is now one of the most-hyped technologies in the market. In January, almost every major company covering the entire spectrum of chip companies, modem system houses, PC original equipment manufacturers (OEMs), telephone equipment vendors, and phone carriers announced the formation of the Universal ADSL Working Group, a coalition aimed at developing a single ADSL standard for home users. Although the technology already exists, the lack of a standard has kept the market from developing. But with the backing of this group, some observers said they are optimistically predicting ADSL modems will be available for the holiday shopping season, and some PC OEMs are already designing them into their boxes. The cable market is continuing to grow with strong backing from the cable industry, which sees the format as a much-needed source of revenue as they lose market share to satellite TV systems. However, the bulk of the modems in use are analog, and the 56K modem is seen as the next logical upgrade step. This gives the analog technology the nod for unit sales this year, but digital devices are expected to continue their hot growth curve.