PDF of this tutorialSales in the modem business started out slowly until customers started buying PCs. Likewise, costs were high until the volumes picked up. When the 14.4-kbps modem was first introduced, it cost $14,400—or one dollar per bit. Today, a much faster consumer-level modem with many more features costs only $100–$300, making it unusual for a home PC today to be without a modem.
Over the years, customers watched modem vendors evolve their products on a standards basis. This technique, although somewhat time consuming, was very important and led to significant feature enhancement. Initially, several modulation schemes were in use, but by the time the V.34 modem came out all of the major modem-modulation schemes were combined in that standard—giving the customer one modem that could be used in many applications. As the modem market matured, customers became less concerned with the internals of standards and more concerned with features, size, and flexibility.
As a result of the progress in analog-modem technology and with the advent of mass-market consumer-level PCs, there are over 500 million modems in the world today.
The xDSL modem market will follow similar market patterns. Today, things like modulation schemes, the type of protocol supported to the home or small business, and costs of the units are the main topics. As the xDSL market matures, most likely in a fashion similar to that of the analog modem, customers will become less concerned with modulation and protocols. On the other hand, they will look for vendors that provide plug-and-play interoperability with their data equipment, ease of installation, the best operating characteristics on marginal lines, and minimalist size and power requirements.
