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IPTV to drive networking gear in '07

Posted: 03 Jan 2007 ?? ?Print Version ?Bookmark and Share

Keywords:iSuppli? IPTV? LAN? semicon? semiconductor market?

iSuppli Corp. forecasts that global IPTV subscribers will soar to 14.5 million this year, up a stunning 192.4 percent from 4.9 million in 2006. This will drive a strong market for wired communications equipment and related semiconductors.

"The year 2007 represents an inflection point for IPTV where the technology will no longer be only for early adopters; those in the mass market will also jump on-board," said Steve Rago, principal analyst for networking and optical communications at iSuppli. "This IPTV transition is occurring simultaneously around the world, so everywhere regionally will see an increase in subscribers."

He added that by 2010, worldwide IPTV subscribers will reach 63 million.

The entry of more competitors in the market will improve the variety and pricing of IPTV services for consumers, said iSuppli. As the IPTV subscriber base grows, telecommunications companies will spend more on equipment to increase network bandwidth and capacity. Partly due to this IPTV surge, global revenue of wired communications gear will hit $101.4 billion this year, up 7.2 percent from 2006's $94.6 billion and 3.7 percent expansion.

Moreover, semiconductor sales to the wired communications gear market also will benefit from IPTV's growth. Global revenue for wired-communications semiconductors will grow to $19.4 billion this year, up 18.3 percent from $16.4 billion in 2006. Chip revenue to the wired gear market grew 10 percent in 2006.

Related growth
Meanwhile, demand for optical networking equipment is expected to rise dramatically in 2007 due to the expected growth in IPTV subscribers and the telecommunications companies' purchasing of equipment to increase their bandwidth and capacity. Long-haul optical WAN equipment is predicted to be the top-performing sector of the global wired communications networking equipment market in 2007, with revenue rising to $2.7 billion in 2007, up 40 percent from $1.9 billion in 2006.

The impact of IPTV and video on wired network communications gear spending is widespread, with six of the seven top segments of the market receiving a sales boost due to the technology's rise.

"The only segments that will not being driven by IPTV and video in 2007 is the LAN switches and hubs area," Rago said. "This broad-based boost will offer copious opportunity for networking gear makers in 2007."

Meanwhile, the enterprise networking market is being driven by the continued growth of the LAN switching segment. iSuppli forecasts a 25 percent growth this year for LAN switching gear, up from 13 percent in 2006. Driving this growth is the conversion to Gigabit Ethernet, coupled with strong demand for new enterprise networks in regions outside North America.

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