Broadband Users Still On The Rise, Fueling CPE Market

CAMPBELL, CA -- The number of broadband subscribers around the world continues to surge, fueling the broadband CPE market, which grew 15% to $5.6 billion in 2006, according to Infonetics Research’s latest Broadband CPE and Subscribers report.

The overall rise in broadband CPE manufacturer revenue was driven in large part by surging residential gateway sales, which jumped 39% between the first and fourth quarters of 2006. Mutliservice gateways are especially popular: ADSL IAD sales have nearly doubled or more every year since 2002, and EMTA sales quadrupled in 2005 and almost doubled in 2006.


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However, intense competition is expected to drive down the price per unit significantly for many broadband CPE categories, particularly ADSL IADs and broadband gateways, which will keep annual revenue growth in the overall market to the low single digits through 2010.

Worldwide revenue for voice CPE, which includes DSL IADs, EMTAs, VTAs, digital home gateways, and broadband routers with integrated VTA capability, jumped 115% in 2006, and is now 30% of the overall broadband CPE market.

“Right now service providers are competing with each other for voice dollars, which is driving their purchase of EMTAs and IADs. Carriers are shifting their focus to video, though, so phase two of the triple play battle will spur big increases in gateway sales, especially VDSL broadband gateways, revenue for which is expected to quadruple in 2007, and digital home gateways, revenue for which will grow six-fold between now and 2010,” said Infonetics Research analyst Jeff Heynen.

Market Highlights

-- Worldwide broadband CPE sales totaled $1.5 billion in 4Q06, up 2% from
the previous quarter
-- Worldwide residential gateway revenue reached $2.9 billion in 2006,
driven by strong multiservice gateway sales
-- Despite plunging revenue per unit for most broadband CPE products,
aggressive service provider rollouts of DSL, cable, and fiber networks will
keep growth in the overall market at a steady incline through 2010
-- Linksys is the worldwide broadband CPE revenue leader in 2006; Thomson
is 2nd, Motorola 3rd
-- 39% of worldwide broadband CPE revenue comes from North America, 35%
from EMEA, 20% from Asia Pacific, and 6% from CALA in 2006

Infonetics’ forecast for worldwide broadband CPE, made one year ago, came within 2% of actual revenue.

Infonetics’ broadband CPE report provides worldwide and regional forecasts, market size, and market share for DSL and cable CPE (modems, gateways, IADs, EMTAs), voice terminal adapters (VTAs), wired and wireless broadband routers, and residential gateways (broadband, multiservice, and digital home gateways).

Companies tracked include 2Wire, Arris, AVM, Buffalo, D-Link, Foxconn, Huawei, Linksys, Motorola, NETGEAR, Scientific Atlanta, Siemens, Sumitomo, Thomson, Westell, ZTE, ZyXEL, and others.

Download sample data at www.info.infonetics.com. For sales, contact Larry Howard, vice president, at larry@infonetics.com or +1 (408) 583-3335.

Infonetics Research (www.infonetics.com) is the premier international market research and consulting firm specializing in data networking and telecom, providing a complete view of the market. Services include quarterly market share and forecasting, end-user survey research, service provider survey research, and service provider capex analysis.