Gartner Says Worldwide DSL Equipment Market Posted Record Growth in the Third Quarter of 2003
STAMFORD, CONN., November 21, 2003 — Aggressive digital subscriber line (DSL) deployments in China and migration to higher speed platforms in Japan propelled the worldwide DSL equipment market to record growth in the third quarter of 2003, according to preliminary results by Gartner, Inc.
Worldwide digital subscriber line access multiplexer (DSLAM) port shipments reached 12.4 million units, a 182 percent increase from the same period a year ago and a 32 percent rise quarter over quarter. Worldwide customer premise equipment (CPE) shipments increased 135.5 percent year over year and 25.8 percent quarter over quarter to 10.2 million units in the third quarter of 2003.
"The DSLAM market continues to be dominated by Alcatel, with its diverse customer base, and Huawei, riding the Chinese broadband wave. The second tier is more volatile, and most noteworthy this quarter was the strong performance of the Japanese vendors," said Jouni Forsman, principal analyst for Gartner's worldwide Telecommunications and Networking group. "In the DSL CPE market, established original equipment manufacturers (OEMs) remain challenged by new Taiwanese entrants, many of whom are shipping directly to service providers under service provider brand names."
Alcatel was the leader in the worldwide DSLAM market in the third quarter of 2003 with 34.4 percent of port shipments (see Table 1), followed by Huawei with 17.7 percent market share. Huawei experienced the strongest shipment increase during the quarter, compared with the same period in 2002. The DSLAM market is already very concentrated, with the top two vendors making up 52.1 percent of the market.
Table 1
Preliminary Top Worldwide xDSL CO Vendors' Unit Shipments Estimates for 3Q03
(Thousands of Units)
Company
3Q03 Port Shipments
3Q03 Market Share (%)
3Q02 Port Shipments
3Q02 Market Share (%)
Growth (%)
Alcatel
4,283.2
34.4
1,531.1
34.7
179.7
Huawei
2,200.0
17.7
160.0
3.6
1,275.0
NEC
1,089.0
8.8
440.0
10.0
147.5
Sumitomo
826.0
6.6
306.5
6.9
169.5
Siemens
677.1
5.4
132.3
3.0
411.8
Lucent Technologies
677.1
5.4
222.6
5.0
204.2
Others
2,690.1
21.6
1,619.5
36.7
66.1
Total
12,442.5
100.0
4,412.0
100.0
182.0
Source: Gartner Dataquest (November 2003)
Siemens was the No. 1 vendor in the CPE market in the third quarter of 2003, with 12.8 percent of unit shipments (see Table 2). NEC jumped into the second position with 9.2 percent market share, while Thomson claimed the third place spot with 8.6 percent of the market.
Table 2
Preliminary Top Worldwide xDSL CPE Vendors' Port Shipments Estimates for 3Q03
(Thousands)
Company
3Q03 Unit Shipments
3Q03 Market Share (%)
3Q02 Unit Shipments
3Q02 Market Share (%)
Growth (%)
Siemens
1,310.9
12.8
877.2
20.2
49.4
NEC
938.0
9.2
243.0
5.6
286.0
Thomson
874.3
8.6
605.7
14.0
44.3
Westell
626.0
6.1
356.0
8.2
75.8
ZyXel
595.5
5.8
362.7
8.4
64.1
Others
5,857.8
57.4
1,888.0
43.6
210.3
Total
10,202.5
100.0
4,332.6
100.0
135.5
Source: Gartner Dataquest (November 2003)
Asia/Pacific showed the strongest regional growth in DLSAM port shipments in the third quarter of 2003, with at least 3 million DSLAM ports, or 25 percent of total port shipments, going to China. North America also registered a slight increase in shipments, as services providers rose to meet the competitive challenge of cable and added DSL subscribers by providing a combination of price cuts and promotional packages. Growth in DSLAM port shipments to Latin America also occurred because operators in Argentina, Brazil, Chile, Colombia and Peru increased their DSL deployment in the face of increasing demand. DSLAM port shipments to Europe and the Middle East declined in a seasonally slower third quarter.
"Strong demand for DSL equipment will continue for a few more quarters as several carriers enter their mass deployment phase, while others migrate to higher-speed platforms requiring replacements of some older equipment," said Gauri Pavate, principal analyst for Gartner's worldwide Telecommunications and Networking group. "Although port shipments will grow, revenue growth will be slow as ASPs continue to decline in the face of fierce price competition. Vendors will find it challenging to continue rolling out increasingly cost-effective equipment while maintaining future platform value-added-service capability."
A DSLAM is a chassis that contains xDSL line cards. The chassis can be located in a central office (CO) and sits outside of the CO switch. CPE is a unit that sits at the home, business, or end-user location that is receiving xDSL service.
Additional information is available in the Gartner Dataquest Alert Global DSL Equipment Shipments Hit Record in 3Q03. This Alert examines the state of the worldwide DSL equipment industry and looks at developing trends and the performance of the top-tier vendors. This report can be purchased on Gartner's Web site.
This analysis is provided by Gartner's worldwide Telecommunications and Networking group. This group provides an analysis for the full spectrum of telecom and networking issues. To keep up to date on the latest telecommunications issues, please visit Gartner's Public Network Infrastructure Equipment Focus Area. To purchase a report or subscribe to Gartner programs, call 408-468-8000 or go to www.gartner.com.
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