As if there isn't enough hype already. Now Forbes has to join Sorry for the sarcastic tone in my comments, but I just get so tired of reading this crap. On the positive side, the hype does serve a useful purpose if you believe in the long-term prospects of broadband in general.
There will be a time in the future when the hypesters give up because it's not happening fast enough, or maybe looks for a short time like it may not have the mass-market appeal they were hoping for. That's a good time to load up at a reduced price (it will never be at a discount), assuming nothing has fundamentally changed in the forward-looking picture.
..other evidence from
Kinetics Strategies Inc., a Phoenix,
Ariz.-based market research firm in the
broadband cable industry, cable modems
are about to take a sizzling ride. "We get
dinged for being far too conservative!"
says Kinetic Strategies' president,
Michael Harris, in defending his numbers.
There are already(emphasis mine) about 250,000 cable
modems in use, but by the end of the year
that will more than double to around
500,000.
Gee that's funny, a couple years ago, the forecasts were to hit those paltry numbers a long time ago. I can't speak specifically about Kinetic Strategies, but in general these market research firms are right up there with economists in the accuracy of their forecasts. Don't bet your hard-earned money on these forecasts playing out by a specific date or to a specific degree.
If you can't count on the quantitative part of the forecast, but only the long term direction being correct, what good are they? We all know the long term direction.
Almost without fail, we overestimate the immediate impact of a new technology, but far underestimate the long-term impact. So far, we fit that mold well. We're way behind the forecasts from a couple years ago.
.. high-speed Internet data
through a coaxial system is possible and
inexpensive and already incorporated into
silicon chips and support circuits--even for
cable systems hamstrung by poor wiring..
Gee that's funny, the high cost of cable plant upgrades is a primary reason for the slow upgrade progress. The cable itself is not the costliest part of this upgrade, so even a cable system that chooses to (make a bad decision and) skip the cable upgrades, and just upgrade the endpoints has a significant expense. You could make a good argument that such a cable system will incur higher long term expenses because this short-cut to get an immediate benefit will cost them more in the long run because of higher service costs and failure rates, and they'll eventually have to replace everything with what they should have done from the start. This market is still in the 'technology enthusiast' state--mass market is a ways off--so there's plenty of time to do it right the first time, in my opinion.
Standards, competition, and the public's
unslakable thirst for fast Internet
connections means good news for the
future of data over cable. In coming
months, as standards-compliant cable
modems appear both directly from cable
companies and from your local electronics
store, this market could turn hot very fast
for the 40% of American homes that have
PCs already and are served by a cable
provider. Kinetics estimates that cable
modem service is now available to about
12 million homes, and more than 1,000
subscribers are signing up each day.
Other than pilot tests, there aren't any cable systems set up to serve data per MCNS yet ( see cablemodem.com. Plus, the conformance specifications are still in the preliminary phase (3 phases to go yet before they're released specs). Maybe you'll be able to buy a DOCSIS modem later this year at Circuit City (I sincerely doubt it for the aforementioned reason. These were suppose to be available in retail the first quarter of this year. Didn't happen.), but the cable plant requires further upgrades (even if it already serves up a cable internet connection) to be DOCSIS-compliant.
Why would an MSO bear that expense if they're already 2-way data capable with, for example, a proprietary LANCity modem? Not only do they have to spend more to convert their head-end to MCNS, all the customer's modems have to be replaced with MCNS modems too (without interrupting the customer's current service). I can't see many MSO's doing that since they'll have ANOTHER new wave of replacements to take care of in the future once the video is digital and/or DOCSIS specifically supports digital video and other potential digital services. When that happens, the hardware becomes more complicated (read: more expensive) because of the need for 2-3 tuners instead of 1, as well as the full digital video path circuitry (and possibly an analog path to support legacy programming). When we reach that point in the market development, I believe we'll see a (temporary?) lapse in the support for cable-based broadband, and a shift toward satellite because satellite-based video programming is ahead of cable in that respect. If satellite systems have a solution for the high-speed DATA return at that time (and a 1 Mbps DSL return channel with a low rate forward channel [the opposite of current DSL as a data connection] might be that solution), and costs to the consumer are comparable to what cable with the same functions would cost, and the downstream multiple access issues for satellite are satisfactorily worked out, and the local channel issues are satisfactorily worked out, a large chunk of the available market may take the satellite route (too many "AND's" need to happen in my opinion; but that doesn't rule out some alternate (to high power DBS) satellite based 2-way data service from coming to life, and teaming w/ DBS providers to provide a video+data solution).
The incentive: How else is a cable operator
going to get subscribers to fork over
another $20 to $30 a month?
I don't understand how that "answer" has anything to do with incentive, but I wish I only had to pay $20-30 per month. Even if this implies no modem lease fee (it must), you still have to amortize the cost of the modem/ set top box/ set top computer that you buy at circuit city, over a 3-5 year product life, to compare apples-to-apples.
And don't forget to add the extra taxes and license fees you pay each month for cable data service (tack on an additional 15% of the cable data service fee for my case). Somehow, they forgot to mention that when I got the service.
Also, how does the retail model fit into, for example, Cox@Home requiring a new, higher bandwidth coax with no splices into the modem? A wise move on their part (from a service reliability perspective), but this still requires a service call, and therefore a fairly tidy installation fee. The retail model kinda loses its attraction from that standpoint. Almost the same amount of work for COX, with the added uncertainty of an unknown retail-purchased clone modem, untested in their system. Don't let the interoperability mantra of DOCSIS fool you. You want a modem that is tested and approved in the particular cable system you connect to. Maybe by the 4th or 5th generation DOCSIS modems that wont be important, but early adopters should insist on this, history shows.
The data speeds of today's systems are
staggering--easily in the megabits per
second range, which means ten to one
hundred times faster downloads than
plain old dial-up analog modems.
BULL! See: Message 4480160
This data rate means up to VHS or better
quality video to the computer.
BULL! DOCSIS is a data-only standard. No video support at present. In that context, the author's comment has no meaning. Digital data AND video is at least a product generation away. Plus, if, for example, @Home is your service provider, they cannot serve digital video greater than 10 minutes duration (per contract with the MSO's). Which means the gimmicky, low-resolution, postage-stamp-sized, low frame rate video they serve up now is it. See Message 4434519 under PRIMARY SUPPLIER (MSO) CONSTRAINTS.
...is the presence of some
very big, very smart companies in this
market sector. AT&T just bought TCI.
Microsoft has a stake in ComCast and
Thomson. Paul Allen recently acquired
two smaller cable operations: Marcus and
Charter Cable. Cisco, Bay, Nortel, Hayes,
Samsung, Sony, Mitsubishi, Motorola are
all firmly in the business of selling the
equipment.
Well, very big applies to all, but very smart only to a couple. Wish I could find the link to the failures of Paul Allen's past ventures, it was an interesting read.
dh
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