ABI: Universal EdgeQAM market will take off next year

Tue, 09/16/2008 - 8:30am
Traci Patterson

The market for Universal EdgeQAMs will begin to take off in 2009, according to ABI Research, and by 2013, the market will have reached a size of about 1.5 million channels.

Channels are used as the industry’s standard unit of measurement, since each QAM may provide variable numbers of them, ABI said. The 1.5 million channels that ABI forecasts for the Universal EdgeQAM market in 2013 represents a seven-fold increase compared with 2007 shipments.

And 2008 shipments are slightly lower than those for 2007, according to ABI’s “Universal EdgeQAMs,” a new research brief that explores the market strategies surrounding Universal EdgeQAMs and the factors that determine the value of the market.

According to ABI Research Principal Analyst Robert Clark: “Cable operators faced with growing competition from IPTV seek inexpensive ways to increase bandwidth. While QAMs are more cost effective than other ways of doing this, many operators have decided to focus in the short term on reclaiming bandwidth by riding on the coattails of the analog-to-digital television switchover. After that transition, operators will move to EdgeQAMs as a next step.”

The first wave of QAM deployments is likely to occur in markets where competition from IPTV is particularly strong, such as in South Korea, Japan and France, the research found. Other markets will follow more slowly.

“There’s a limit to the amount that financial markets will let operators spend,” Clark said. “Cable operators have to find the right balance between deploying enough EdgeQAMs and overextending their resources, or they risk financial analysts’ judgments that they are over-building. And, with softness in consumer demand, some cable operators already loaded with debt may have to focus on maintaining debt covenants instead of expanding.”

As for vendors: “Vendors understand and expect falling prices,” Clark said, “yet they still want to try and ride the market wave.”

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