Driven by broadband service providers and applications such as VoIP, the number of homes with residential gateways (RGs) will hit 69 percent by 2009, according to a Parks Associates forecast.

"Home networking equipment is shifting from low-cost and relatively limited devices sold at retail to integrated modem and router platforms that offer multimedia applications and advanced management software," said Kurt Scherf, vice president and principal analyst at Parks Associates.

Broadband service providers are becoming more willing to jump on the RGs, he added, because they promote customer retention, lower support costs, and, with more services attached to them, produce higher revenues.