Cable Modems Have Banner Year in 2000

Cable modem subscriptions jumped almost 178 percent in 2000 to 7.2 million while equipment revenue grew 122 percent, according to International Data Corp. (IDC), which forecasts the number of subscribers to increase more than eight times to 57.5 million by 2005.

IDC’s “Worldwide Cable Modem Equipment and Services Market Analysis and Forecast, 2000-2005,” found that in 2000, the number of U.S. cable modem subscribers grew 171 percent to 3.8 million — more than three times as many as any other region and representing 53 percent of the worldwide market.

However, during the next few years IDC predicts cable modems will begin to lose ground to DSL, and the U.S. share of worldwide subscribers will fall to 36 percent.

“Work-at-home employees and power Internet users sparked demand for cable modems in the residential market,” said Amy Harris, program manager with IDC’s Broadband Markets and Technologies program. “Future growth will be driven by the prevalence of image-rich and video-rich applications on the Internet.”

Cable modem use in Western Europe will significantly pick up. From 1 million in 2000, Western European cable modem subscriptions will soar to almost 17.7 million in 2005. During this time, Western Europe’s share of worldwide subscribers will soar from 14 percent to 31 percent.

“Industry consolidation and the increasing availability of broadband content are driving the rollout of cable modems in Western Europe,” Harris said.

Despite the growth expected in the worldwide subscription base, IDC believes cable modem manufacturers will have to confront a number of issues, including scaling problems, installation and provisioning challenges, and challenges from other broadband technologies.

“To attract and retain customers, cable modem services must be reliable, the installation process must be fast and easy, and pricing must be compelling and competitive with other broadband services pricing,” said Brad Baldwin, director of IDC’s Broadband Markets and Technologies research.