Tech Hardware Supply Chain - Gazhoo

Bhavin Shah
(852) 2800-8538
bhavin.a.shah@jpmorgan.com
Bhavin Shah AC
(852) 2800-8538
bhavin.a.shah@jpmorgan.com
J.P. Morgan Securities (Asia Pacific)
Limited
Shawn Webster
(1-415) 315-6723
shawn.r.webster@jpmorgan.com
J.P. Morgan Securities Inc.
52
Asia Pacific Equity Research
20 April 2009
Broadband access
What’s new?
As the xDSL market continues to shrink due to stiff competition and weak economic
environment, the vendor fallout appears to have begun, with TI and Centillium
selling off their xDSL businesses to Infineon and Ikanos respectively. Also, WiMAX
as a technology has come to the deployable stage—a number of networks are being
deployed in emerging markets.
Given that fixed WiMAX is being promoted as a wireless broadband technology, we
have discussed this technology in this section. However, as WiMAX evolves towards
mobile WiMAX and 4G, it is facing competition from new technologies such as LTE
(for details, please refer to the Mobile Handset Radio Technologies section). We
have also included a discussion on Passive Optical Networks (PON); we believe
PON is emerging as a major challenger to existing broadband technologies as it
enables point-to-multipoint optical communications.
Despite advantages of DOSCIS 3.0, CMTS continues to be limited to certain
geographies as it faces stiff competition from optical network technologies. Metro
Ethernet continues to face resistance as high initial costs limit its acceptance.
Broadband: Brief overview
Broadband refers to telecommunication, in which a wide band of frequencies are
available to transmit information. Due to a wide band of frequencies, information can
be multiplexed and sent on many different frequencies or channels within the band
concurrently, allowing transmission of more information in a given amount of time.
Hence, broadband is a high-bandwidth internet connection, which allows one to view
web pages quicker, download files faster, and send and receive emails without much
delay. In general, any connection to the customer of 256 kbit/s or more is considered
broadband internet.
We discuss five different broadband technologies in this section—DSL, Cable
Modem, Metro Ethernet, PON and WiMAX. Compared with traditional dial-up
access, these technologies open up homes and small businesses to a new realm of
possibilities for network connectivity and applications. Video-on-demand,
multimedia conferencing and online gaming are just a few examples of services on
the internet that do not work as effectively at 56kbps as they work at broadband data
transmission rates.
While DSL is a dominant technology in the market, Metro Ethernet and PON are
emerging as strong competitors. WiMAX is a fixed wireless broadband technology,
while others are wireline technologies. Because of its cheaper costs, wider coverage
reach and ease of set-up, WiMAX is becoming a preferred choice in developing
countries. Besides, broadband is likely to face stiff competition from 3G/4G
technologies, such as LTE and mobile WiMAX, as they evolve to the speeds of fixed
broadband.