Gateway sales to grow 525% by 2008.

OYSTER BAY, NY -- While broadband gateways--home networking services that contain both a modem and router--are generally open to either DSL or cable standards, the apparent strategies of DSL and cable service providers are having a significant effect on gateway distribution, says a new report from research firm ABI. Many cable service providers have discouraged the use of gateways, preferring instead to increase the number of wired installations in a subscriber's home. Alternatively, DSL service providers have embraced the retail model, putting the burden and the choice of CPE (customer premise equipment) on the consumer. Such practices by DSL providers are predominant outside North America, says ABI (abiresearch.com).

Sales of broadband gateways were $290 million in 2003 and are expected to pass $1.53 billion by 2008 worldwide, ABI says. "That DSL-compatible gateways are available through retail channels makes the equipment--and the service provider--more attractive," says Vamsi Sistla, ABI Research's director of broadband. "In the way that the TV turner will be migrating to the "IV itself and thus the retail space over the next several years, the same may prove true of the cable modem, as pressure mounts to migrate this functionality to consumer CPE as well."