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Broadband Hardware Sales Will Hit $5.4 Billion By 2008

Sales of broadband modems, routers and gateways were up in the second quarter of this year, and are likely to continue along the growth curve for the next few years, according to a new report from Infonetics Research.

In its Broadband Modems, Routers, and Gateways quarterly report, Infonetics notes that worldwide revenues from broadband customer premise equipment (CPE) sales grew 3% in the second quarter of 2005, representing 26.7 million units shipped, a 5% quarterly gain. The firm expects the market to continue to expand, with revenues reaching $5.4 billion by 2008.

Much of the growth, notes Infonetics directing analyst Richard Webb, is being driven by higher speeds and, above all, new broadband applications. "Though some broadband CPE will become commoditized, the integration of VoIP, security, home networking, and multimedia capabilities will generate new revenue for CPE products," Webb said in a statement. "In addition, new flavors of DSL and faster 802.11 wireless speeds will continue to drive CPE replacement purchasing."

Significantly, cable broadband CPE revenues are growing faster than revenues from digital subscriber line (DSL) product sales. Worldwide cable CPE revenues increased 4% last quarter, with Infonetics projecting a 6% rise by the same quarter next year, while revenues from DSL product sales grew only 2% in the same period, and are expected to drop 1% by the second quarter of 2006. Nevertheless, DSL CPE products currently account for 47% of worldwide broadband CPE revenue comes from DSL CPE, and 18% from cable CPE, with broadband routers accounting for 27%.