Frost & Sullivan: Phenomenal Growth Will Continue in the Chinese
Modems Market - PRNewswire, 08:21 a.m. Feb 22, 1999 Eastern
BEIJING, Feb. 22 /PRNewswire/ -- With amazing growth rates exceeding 100 percent
each year since 1994, the attention surrounding the Chinese modems market is
definitely wholeheartedly justified, say the experts.
According to the latest strategic research study by Frost & Sullivan (www.frost.com),
The Chinese Desktop Modems Market, in 1998 this market generated approximately
$126.3 million (in Chinese dollars), growing 112 percent from the previous year.
Major drivers behind the market include: Increased Internet usage, personal computer
market growth, standardization of modem technology, and a shift from analog to
high-speed modems. Frost & Sullivan forecasts the market throughout the year 2004
and divides the study into two market segments: Analog and high-speed modems.
Currently, analogs dominate the market share. However, Frost & Sullivan predicts
high-speed modems will gradually replace analogs during the forecast period.
In the analog segment, the transmission speed ranges from 2400 bps to 112 kbps.
However, modems at the two extremes contributed very little to revenues. Modems
with a transmission speed of 33.6 kbps and 56 kbps contributed the most. Multiple line
analog modems have bridged the gap between 56 kpbs modems and high-speed ISDN
modems. According to Frost & Sullivan Telecommunications Analyst Jay Chen, "In
places where ISDN is not installed and bandwidth is of concern, multiple line analog
modems are the option."
The market for high-speed modems has just debuted. TV advertisements are being
broadcast nationwide in order to promote ISDN and xDSL. This segment will
experience a boom at the turn of the century. Chen states, "ISDN will continue to be the
most important high-speed modem form in China throughout the forecast period. Both
xDSL and cable technologies have problems with their standards. Neither will see
major growth until problems have been solved."
One of the major challenges facing the industry is the inability of both analog and
high-speed modems to achieve their advertised transfer rate. There are several reasons
behind this problem. According to Chen, "The maximum voltage allowed on the PSTN
line confines the speed of 56 kbps modems to 53 kbps, while the distance between the
terminal equipment and the local exchange limits the transfer rate of xDSL. The sharing
of bandwidth over cable makes the actual bandwidth that each user possesses smaller
than the theoretical figure. All of these caveats conspire to limit actual delivered
bandwidth and constrain market growth."
In addition, manufacturers need to be wary of dropping prices. Domestic manufacturers
and manufacturing ventures in South East Asia are entering the market, making it more
price-sensitive than ever before. Soft modems have also arrived, and this could drive
the price of analog modems even lower. Soft modems shift part of the processing load
to the CPU, and it is an effective way of reducing costs. Large companies like Motorola
can offer soft modems at an attractive price enabling more consumers to purchase their
prestigious name.
There have been several important mergers within the market. 3Com and US Robotics
consolidated into one competitive vendor. It also reached an agreement with Legend
Technology Limited, a distributor with nationwide channels and remarkable distribution
power. GVC expanded drastically in the last two years and will seize more shares from
other players.
This Frost & Sullivan study is based upon extensive primary research. Market drivers
and restraints are based upon interviews with different vendors. The forecast is
cross-verified with the growth of the Chinese PC market, the development of the
Internet, and the Chinese telecom infrastructure.
This study forms part of the Asian strategic marketing consulting series, with valuable
information gathered from Frost & Sullivan's Asia-based analysts through in-depth,
face-to-face interviews with executives from key market participants.
The market participants in this study are: 3Com Corporation, 3Com North Asia HQ,
Addonics Technologies Corp., Addonics Beijing Office, ADTRAN, Inc., Advanced
Computer Communications, Inc., Advanced Fiber Communications, Advanced Video
Access, AG Communications Systems Corporation, Alcatel Telecom, Alcatel China
Limited Beijing Office, Alpha Telecom, Inc., USA, AMATI Communications Corp.,
Archtek America Corporation, ARESCOM, Ariel Corporation, Ascend
Communications, AVM of America, Inc., Bay Networks Corp., Bay Networks Beijing
Office, Beijing Quanxiang Electronic Technology Development Company, Beijing
TAINET, Communication System Corp., Best Data Products, Inc., Black Box Corp.,
Boca Research, Inc., Cabletron Network Express, Cabletron Systems Inc., Chase
Research Inc., CIS Technology Inc., Com21 Inc., Compaq Computer Corp., Diamond
Lane Communications Corp., Diamond Multimedia Systems Inc., Digicom Systems
Inc., Digi International, D-Link Company, D-Link Systems Inc., 5 Musick Irvine, CA
92718, Digital Link Corporation, DSC Communications Corporation, ECI Telecom
Inc., Efficient Networks Inc., Eicon Technology Corp., Eiger Labs Inc., Elsa Inc.,
E-Tech Research Inc., Farallon Computing Inc., FastComm Communications Corp.,
FlowPoint Corporation, Fujian Start Computer Group Co., Ltd., Fujitsu Network
Communications Inc., Gandalf Systems Corp., General Instrument Corporation,
Global Village Communication Inc., GVC Corporation Beijing Office, GVC Co. Ltd.,
Building 14, No. 76, Section 2, South Dun-Hua Road Taipei, Taiwan, Hadax
Electronics Inc., Hayes Corporation, Hayes (China) Limited, Huawei Technologies
Co., Ltd., Hybrid Networks Inc., IBM Corporate Strategy Department, IFR Systems
of Texas, Interphase Corporation, ISDN*tek, ITK Telecommunications, Corp.,
Kingmax Technology Inc., Kingmax Micro Technology Inc., Kingmax Beijing Office,
Kingston Technology Corporation, Legend Technology Limited, Logicode Technology
Inc., MaxTech Corporation, Motorola Inc., Motorola (China) Electronics Inc.,
Multi-Tech Systems Inc., Netspeed, Northern Telecom, Packard Bell/NEC, PairGain
Technologies Inc., Paradyne Corporation, Paradyne Corporation Beijing Office,
Phasecom Inc., Promatory Communications Inc., Taicom Data Systems Co., Ltd.,
Taicom Data Systems (China) Co., Ltd., Taicom International Inc., TAINET
Communication System Corp., Westell Technologies Inc., Wisecom Inc., Xircom
Inc., Xircom Hong Kong, Zoltrix Inc., Zoom Telephonics Inc., ZyXEL
Communications Inc., Related Companies, Digital Equipment Corporation, Electronics
Resources China Limited, Intel Corporation, Legend Group Co., Beijing Jishan
Communication, Technology Ltd., Microsoft Corporation, Motorola Inc., Primate
Marketing Company, Rockwell Semiconductor Systems, Shenzhen Wellinkdyne, and
Communication Technology Co. Ltd.
Frost & Sullivan is an international marketing consulting & training company that
continually monitors the information technology industry for market trends, market
measurements and strategies. This ongoing research is utilized to update Frost &
Sullivan's online research subscriptions such as the internet/intranet/online custom
subscription, and to support industry participants with customized consulting needs.
Report: 4885-72 Pub Date: January 1999 Price: $1,950
Visit the Frost & Sullivan web site: frost.com. SOURCE Frost & Sullivan
Copyright 1999, PR Newswire
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