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BIG JUMP IN 56K MODEM MARKET FORECAST FOR NEXT YEAR-Point-Topic
Shipments of chipsets for 56K modems are set to double next year, according to forecasts just published by Point Topic. With the ITU V.90 Recommendation for 56K modems finally approved in Geneva on 15 September, this should be encouraging news for chipset and modem manufacturers who have been battling with slack modem sales so far this year.
"The battle over 56K standards, and confusion about updating to V.90 have have been heavily blamed for poor modem sales in the last few months," says Tim Johnson, author of the forecasts. "But I think a lot of the problem is simply that the Internet isn't growing at such a fantastic rate as before." Point Topic's estimates show that the Internet will add "only" 24 million subscriber line conections in 1998, roughly the same as in 1997. "With the replacement market still small, this means that the demand for modems is pretty well static," says Johnson.
"There's also a big overhang of surplus 56K chipsets and modems to get rid off," Johnson adds. "I estimate that the vendors had shipped at least 6.5 million more chipsets than the modem manufacturers needed by the end of last year." Absorbing all this product is taking time and slowing up the introduction of new V.90 chipsets. 56K chipset shipments will probably be no higher in 1998 than they were in 1997, the first year they were introduced.
Growth should resume in 1999, when the Internet is expected to add 30 million more dial-up connections, V.90 will be clearly established as the main modem standard, and the overhang of surplus chipsets should have been largely absorbed. "On this scenario, chipset shipments should increase from about 15 million in 1998 to over 30 million in 1999," Johnson believes.
Point Topic forecasts total sales of 56K modems and software - mainly V.90 products - worth over $18 billion worldwide between 1997 and 2002. Over 170 million 56K modems will be delivered over the six years, 43% of them in the USA and Canada, 25% in Europe and 32% in the rest of the world.
The full Point Topic forecasts are available to subscribers on Point Topic's web site, www.point-topic.com, and will also be published in The V.90 Report in October, also available from Point Topic. Contact info@point-topic.com, phone +44 (0) 171 255 2670, or fax +44 (0) 171 255 1995 for more information.
Pia Heikkila, Marketing Manager, point-topic.com
pia-heikkila@point-topic.com
