Broadband Internet boomed in 2004, as digital subscriber line (DSL) and cable modems and broadband gateways flew off the shelves at phenomenal rates.

According to Infonetics Research's newly-published Broadband Modems, Routers, and Gateways quarterly report, broadband customer premise equipment (CPE) shipments were up 74% last year over 2003, totaling 73 million units. Infonetics expects the trend to continue through 2008, with shipments skyrocketing 191% to almost 200 million units and revenues rising 29% to $5.6 billion in the next four years.

Revenues didn't match the impressive growth numbers in unit shipments in 2004, however. According to Infonetics, they were up only 15% last year, reaching $4.6 billion for the year, and they were down 7% in the last quarter to $1.16 billion despite a 17% increase in units shipped.

The sluggish revenue growth reflect the squeeze on CPE prices as broadband continues to be entrenched in the mainstream, says Infonetics directing analyst and report author Richard Webb. "As DSL outpaces growth in other forms of broadband access, DSL CPE becomes an even more significant proportion of the overall CPE market," Webb said. "However, while unit growth continues apace throughout our forecast period, CPE prices erode, inhibiting overall revenue growth for broadband CPE."

DSL was the carrier technology of choice, making up 48% of CPE shipments last year, compared to 17% for cable. Broadband gateways accounted for 25%, while voice terminal adapters and IP set top boxes made up the balance. Cisco-Linksys was the revenue share leader, followed by D-Link and Netgear.

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