IDC: No knockout punch for cable vs. DSL

When it comes to Internet access, a growing debate has centered on whether DSL or cable technology will enjoy the biggest growth. But a recent IDC study declares the question moot.

Both technologies will have their place in the market and pose no threat to each other, because they are geared toward different types of users, according to Kimberly Funasaki, the IDC analyst in charge of the study. IDC is a subsidiary of International Data Group, the parent company of Network World and the IDG News Service.

Cable modems are oriented toward the residential market, while DSL is geared more toward the small office/home office (SOHO) market, Funasaki said. "Neither one will eliminate the other," she said.

There are a variety of differences between the technologies, regarding price and speed.

Cable modems link the house with the Internet using cable television's coaxial cable, while DSL uses a regular copper phone line. DSL is more effective in an office because of its dedicated connection, whereas a cable connection may end up being slower because each network segment is shared among the users assigned to that part of the network, noted Funasaki. Cable is also much slower uploading data, she said.

When it comes to price, cable is slightly more expensive than DSL, according to Funasaki, because cable providers face less competition.

"ADSL is a very competitive market," she said.

IDC compares market penetration of each technology based on the number of semiconductors shipped for each one. Cable-modem semiconductors outnumber DSL modem chips currently in use, but only because cable was on the market earlier, the IDC study said.

The number of ADSL semiconductor shipments is expected to exceed those of cable by next year, however. Shipments of ADSL semiconductors are expected to go from 2 million in 1999 to 24 million by 2004, while cable modems shipments will go from 2 million to 23 million during that same time.

Funasaki noted, however, that while there is one semiconductor per modem, the number of modems on the market may not exactly equal the number of chips shipped. The number of chips ordered by vendors may actually exceed the number of modems they eventually deliver.

For vendors, the question is which technology is the safest bet.

"A lot of them (vendors) are hedging their bets, backing both because there is no way to say which one is going to win over the other," Funasaki said.