In 4Q04, 21 million broadband CPE units shipped, an increase of 7% from 3Q04. Shipments for DSL modems and residential gateway shipments increased. Shipments for cable modems and broadband routers both declined. Revenue was up 11% from 3Q04. As expected, residential gateways showed the strongest growth in both unit shipments and revenue.
The broadband CPE market is undergoing a transition from being primarily modem-dominated to gateway centric. At the same time, CPE vendors are being pushed to cut costs, while adding enhanced functionality such as WLAN, security, and VoIP.
It is believed that an increasing number of CPE will incorporate VoIP over the next several quarters. We plan to track VoIP-enabled equipment in the Broadband CPE Market Share Report beginning 1Q05.
