Possibly one of the most fascinating areas driving the PC upgrades marketplace is the rapidly increasing uptake of the Internet by the wider community. This is having an effect in a number of areas, not the least being the modem marketplace. While the past two years has seen strong sales of 28.8Kbit/sec modems in the market, the drop in PC sales over the last two quarters has been accompanied by much slower modem sales. This has probably been enhanced by the fact that 28.8Kbit/sec data transfer is a technology just about on its last legs.
A particularly frustrating problem for resellers is that the wider Internet user community seems to be holding off and waiting for something big to happen - but they're not exactly sure what that something is. Furthermore, suppliers have not really been of much help. While both Foxtel and Optus Vision are promising broadband cable Internet access literally within months, many telecommunications suppliers are saying that similar bandwidths can be achieved using new technologies over existing copper wire. At the very time Telstra spends billions on rolling out cable, it is also conducting trials of ADSL technology, which enables users to get video on demand services over existing telephone lines without even affecting their phone services.
Australia's leading homegrown modem supplier, NetComm Limited, seems to be hedging its bets by make a heavy R&D investment in a high-bandwidth cable modem joint venture development with US-based ADC telecommunications while it simultaneously pushes the impending release of its new 33.6Kbit/sec range. According to NetComm's national marketing manager, Chris McPherson, the consumer marketplace is heading toward 33.6Kbit/sec which will be the new base standard. In the interim, NetComm is trying to keep the market ticking over by offering free upgrades to 28.8Kbit/sec buyers. "There will be nothing in the modem area beyond 33.6Kbit/sec but we will offer additional multimedia features using faster compression algorithms, allowing effective data transfer speeds of up to 200Kbit/sec," he said. McPherson claimed that while the cable modems market would grow in the future, there was no foreseeable threat to the sale of conventional modems.
Meanwhile, the word is that NetComm, through its joint venture partner, is working hard to become a cable modems supplier to both Optus and Telstra. Some food for modems resellers: a representative selling Foxtel home cabling services was heard to say recently that within 12 months Foxtel Internet users would be able to rent cable modems for about $6 a month as part of their contract. With rumours like that floating around, one can only speculate about what the future holds for the modems marketplace.