Broadband Equipment Revenues Don’t Keep Up with Sales
Broadband equipment makers shipped 74% more units in 2004 than the previous year but revenue increased only 15%, Infonetics Research said Fri. The firm said revenue fell 7% 4th quarter from 3rd to $1.16 billion. That drop in the customer premises equipment (CPE) market came despite 17% sequential unit growth to 23.3 million.
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Infonetics sees the trend continuing long term for the CPE market, with unit shipments projected to soar 191% 2004-2008 to almost 200 million, but revenue growing only 28% to $5.6 billion. The report is part of a larger trend as CPE makers like wireless LAN manufacturers see increasing pricing pressures.
“Broadband growth continues to accelerate around the world, fueling unit growth,” said Richard Webb, directing analyst of Infonetics Research. “But while unit growth continues apace throughout our forecast period, CPE prices erode, inhibiting overall revenue growth for broadband CPE.”
Infonetics saw a continuing positive trend for the Bells, with DSL CPE revenue making up 48% of total revenue 4th quarter, increasing to 59% in 2008. Much of DSL’s growth will come at the expense of broadband gateways, which made up 25% of the market but will fall to 15% in 2008, the firm predicted. Cable CPE accounted for 17% in the quarter, but is expected to decline to 15% in 2008. Voice terminal adapters and IP set top boxes make up the rest of the market.
D-Link was the overall leader for broadband modem, router, and gateway revenue in the 4th quarter, Infonetics said. Thomson and Motorola were 2nd and 3rd, respectively. In the broadband gateway segment, Cisco- Linksys was the revenue, followed by D-Link and then Netgear.
The report said 35% of revenue was from N. America, 33% from the Europe, Middle East and Africa region, 27% from Asia Pacific and 5% from the Caribbean and Latin America.