Broadband CPE Market Set to Go Supernova
6/5/2006 -- Sagging unit shipments got you down? Not if you're a broadband customer premises equipment (CPE) player.
In spite of a slight (2 percent) decrease in unit shipments, the worldwide broadband CPE market increased 3 percent to $1.3 billion in the first quarter.
How to account for the discrepancy? Surprisingly, higher unit costs aren't necessarily to blame: instead, says market watcher Infonetics, service providers and cable operators reached into their existing inventories for baseline CPE and didn't have to buy as many new products.
Infonetics envisions healthy growth through 2009, at which point the worldwide broadband CPE market should reach $8.6 billion.
"Voice terminal adapters and EMTAs both had a phenomenal first quarter on the heels of record fourth quarter sales," said Jeff Heynen, directing analyst at Infonetics Research, in a statement. "Continued strong sales of voice-enabling CPE is further proof of the success North American cable operators are having in signing up new voice subscribers. Telcos and cable operators can now justify the higher cost of more integrated CPE because it allows them to deploy additional revenue-generating services."
Overall in Q1, 41 percent of worldwide broadband CPE revenue came from DSL CPE, 25 percent from cable CPE, 28 percent from broadband routers, and 6 percent from VTAs and IP set-top boxes, Infonetics says.
Going forward, the researcher anticipates healthy growth for VDSLs and broadband gateways. By 2009, Infonetics projects, the number of worldwide DSL subscribers should reach 245 million, while cable broadband should have nearly 70 million subscribers, followed by IPTV, which should surge to more than 53 million. That's good news for Cisco Systems Inc., among others.
There was other good news for Cisco, too. Right now, Linksys is the overall broadband CPE market leader, followed by Motorola (on a revenue basis) or D-Link (on a unit shipment basis). In Q1, 37 percent of total broadband modem, router and gateway revenue came from the North American market, 30 percent from the EMEA region, and 27 percent from Asia Pacific.  -Stephen Swoyer
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