According to research of the Taipei-based Market Intelligence & Consulting Institute (MIC) conducted as part of the ITIS project, DSL (Digital Subscriber Line) CPE (Customer Premises Equipment) shipment of the Taiwanese DSL industry is expected to reach 11.4 million units in the first quarter of 2009 and 12.5 million units in the second quarter of 2009, representing year-on-year declines of 26.6% and 15.2% respectively.
Looking at product development, with the prices of 11b/g Wi-Fi DSL chipsets on the decline, the price gaps between wireless and wired DSL routers have been gradually reduced. Due to growing wireless demand in the emerging markets, value-line one-port wireless DSL routers are projected to become a mainstream shipment. In addition, prices of DSL chipsets and equipment are expected to drop further on the rollout of next-generation 11n Wi-Fi chipset specifications. Shipments of 11n wireless DSL routers and IAD (Integrated Access Device) for Western European telecom operators seeking to enhance their services are expected to stimulate Taiwanese DSL equipment manufacturers' shipment performance in the first half of 2009.
Taiwanese DSL CPE shipment volume reached 12.0 million units in the fourth quarter of 2008, representing a year-on-year decline rate of 17.9%. Shipment value, meanwhile, dropped 17.0% in comparison with the same period in 2007 to US$316.7 million. In order to avoid direct competition with Chinese contract manufacturers operating at low prices, Taiwanese ODM (Original Design Manufacturing) / OEM (Original Equipment Manufacturing) companies began to adjust their product strategies in early 2008 and increased the shipment volume of wireless DSL routers in line with demand growth in the market. Furthermore, IAD demand in the European market was still significant. Strong shipments of relatively high-priced wireless DSL routers and IAD served to mitigate the shrinking shipment value caused by shipment volume declines.
ASP (Average Selling Price) of wired DSL modems and wired DSL routers stood at US$10.8 and US$13.0 respectively in the fourth quarter of 2008. Owing to price competition from companies, such as Huawei and ZTE, profit margins of Taiwanese DSL CPE manufacturers have been reduced to a minimum. Due to rising demand for wireless Internet access worldwide as well as surge in demand for value-line, low-port-count wireless DSL routers in emerging markets, share of wireless DSL routers in the overall Taiwanese DSL shipment volume remained at around 40% in the fourth quarter of 2008. However, fourth-quarter wireless DSL router shipment volume, affected by weak market demand as well as delay and reduction of orders from telecom operators, saw a 10.8% sequential decline. Thanks to shipments for major European telecom operators' tenders, IAD shipment volume scored 6.2% sequential growth in the fourth quarter and its share of overall Taiwanese DSL CPE shipment reached 27.0%.
More information can be found in the following MIC report: The Taiwanese DSL Industry, 1Q 2009
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About MIC
Market Intelligence & Consulting Institute (MIC), based in Taipei, Taiwan, was founded in 1987. MIC is Taiwan's premier IT industry research and consulting firm providing intelligence, in-depth analysis, and strategic consulting services on global IT product and technology trends, focusing on markets and industries in Asia-Pacific. MIC is part of the Institute for Information Industry. https://mic.iii.org.tw/english
About ITIS
The Industry and Technology Intelligence Services (ITIS) project is managed by the Department of Industrial Technology of Taiwan's Ministry of Economic Affairs. As part of the project, research is conducted in a variety of fields, including the ICT sector. The project serves both the public and private sector.