DSL Modem Market Slides Slightly in Q3, Cable Modem Market Gains.

Business Editors/High-Tech Writers

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Dec. 13, 2000

Deployment issues hindered the growth in shipments of ADSL modems in Q3 2000, while growth in shipments of cable modems, aided by the move towards DOCSIS-certified modems, increased, according to Cahners In-Stat Group (http://www.instat.com/), a high-tech market research firm.

"Overall subscriber growth in DSL grew at a slower rate in Q3 2000," said Mike Lowe, senior analyst for In-Stat's Advanced Carriers Service. However, this does not mean that the market for DSL will crash as has been predicted.

"The slowdown in subscriber growth can be attributed to one-time events like the Verizon strike, and, despite this, the market still grew, but at a slower rate. We are confident that it will bounce back."

As for cable modems, Lowe anticipates that growth will continue, but not as robustly as in Q3 2000. "Now that DOCSIS is an established standard, we saw some manufacturers get into the game more tenaciously than they may have previously. However, we anticipate that slow build-out will limit growth going forward."

In-Stat has also found that:

-- ADSL modem shipments topped 1.85 million units in Q3 2000. This represented
a growth rate of 35% over Q2 2000, as opposed to 46% quarter over quarter
growth in Q2 2000.

-- Two-way cable modems grew at a 58% rate in Q3 2000, shipping over 2.79
million units. Q2 2000 witnessed a 39% quarter over quarter growth rate.

-- Cable Modem Termination Systems, previously reported as Head Ends, saw
shipments of 6,355 units in Q3 2000.

The report, Analog and Digital Modem Quarterly (No. CQ0004M7) breaks out unit shipments and market shares for both the ADSL market and the cable modem market. Also included are forecasts through Q2 2001.

To purchase this report or for more information, please visit http://www.instat.com/catalog/cat-cq-modem.htm#cq0004m7 or call Courtney McEuen at 480/609-4533; [e-mail]. The report price is $2,995 USD.

Cahners In-Stat Group (http://www.instat.com/) covers the full spectrum of digital communications research from vendor to end-user, providing the analysis and perspective that allows technology vendors and service providers worldwide to make more informed business decisions.