In a new report, Mountain View, California-based Market Intelligence predicts a resurgence in the US modem market, with sales rising at a compound growth rate of 8% between now and 1998. The report, Modem Markets: Survival of the Fastest says that the 1991 figure for modem sales of $1,600m will rise to $2,750m by 1998, with a corresponding increase in unit sales over the same period to 17m from 4.5m. The increase in sales is primarily attributed to the growing popularity of pocket modems, with an expected increase of sales in this category rising to $887m in 1998 from $146m in 1991, when they are expected to account for nearly a third of the total dial-up modem revenues. The report also identifies another trend towards higher speed modems, however, which it feels will be encouraged by greater demand for higher-bandwidth applications such as CAD/CAM, multimedia and imaging. Indeed it sees the high-speed sector as growing the fastest, from less than 4% of the market last year to 57% by 1998. Correspondingly, the popularity of lower speed modems is expected to tail off, despite their current popularity: while 1,200bps and 4,800bps modems were found to be the largest segment in 1991 (accounting for 42% of sales) this is expected to drop to less than 1% by 1998. Increased functionality is also found to be a forthcoming trend, with the prediction that facsimile capability will increasingly be found as a standard option, and the incorporation of new features such as remote network access, Ethernet and Token Ring compatibility, modem sharing and advanced security. As the market changes, the market researcher says, it expects a shift in the way that modems are sold, with commoditisation and price erosion leading to a distribution shift towards retail channels: it sees this as the dominant sales route for modems by the end of the decade, closely followed by national and regional distributors.
