Why were "data modems" so much more expensive compared to "fax modems" back in the day?

Later devices were cheaper because they had fewer parts because they were pc cards whose functions are implemented by the host.

Another way to put this is: later devices were cheaper because they are only pieces of the whole device; the functions provided by those missing pieces are provided by the computer that the pc card is installed in.

https://kb.iu.edu/d/aepb

Faxmodems are highly dependent on their drivers. My guess is that you could not get connected to your BBS because something was mis-configured and/or incompatible.

By 1997 there were probably not any fax-only models for sale, you'd have to go back to closer to 1990. At that time, fax-only modems were cheaper, but not by a lot. Typically only $100 less than a combination fax/modem.

Some boards that only provided fax capabilities, and were not usable as a data modem, were the Hayes JT Fax and Fremont FAX96 which cost around $199-299 USD at the time. Fax protocols are different from data, so the modem must support both to be able to use data and fax capabilities.

There's also the additional software included to be able to view faxes, or save them to PC formatted graphics files, and to convert PC files to a medium that can be sent to another fax machine.

I'll add a detail to the topmost answer.

Data modems up to 2400bps used different frequency bands for transmit and receive. But why?

Look at your telephone wire. There are only two wires going between the modem and the wall, yet you must transmit and receive over the same wires. With a telephone, some of the speaker's voice gets redirected to the earpiece, as they share a wire. This is a benefit for humans - the "sidetone" provides confirmation that the phone is working.

However, a modem wanting to do simultaneous bindirectional transmission has a problem: the sidetone from its own transmission is (partially) being reflected back into the receive path. Somehow, this noise must be filtered out or separated.

For speeds up to 2400bps, this is easy: use separate frequency bands, and then use a bandpass filter to weed out the transmit data from the received data. However, this luxury is not available at higher speeds - you need to use the full 4kHz bandwidth of the phone line.

A fax is (almost) unidirectional. A fax modem has a 9600bps path in one direction, and a low speed (300bps) path in the opposite direction. They are band-separated, so a bandpass filter works here. This is fine for faxing - the sender needs only to receive confirmation of receipt of each page from the receiver.

Early USRobotics modems used the same scheme for data: a 9600bps fast path, and a slow return path. For bidirectional communication, the modems would "turn around" and exchange the fast/slow roles. This turnaround took time, as the receiving fast modem would need to retrain.

Other modems took this further: the Telebit Trailblazer PEP protocol achieved 19200bps in its fast direction, and sub-300 in the slow direction. It was popular among UUCP software users, as the modems spoofed the UUCP G protocol (which required a far more balanced transmit/receive ratio) to allow unhindered operation on the highly asymmetric channel.

And then came V.32, with true bidirectional 9600bps, with transmit and receive using the full bandwidth of the phone line. This came much later, as bandpass filtering was no longer possible. Instead, the modems had to do adaptive echo cancellation to subtract a time-shifted and attenuated version of the transmit signal from the receive signal. The DSP required to do this required much faster hardware, which is why these modems came later and were much more expensive.

There are actually a few slightly different pieces of hardware involved. As a starting point though, note that for many years the price of a standalone fax machine, essentially a high-speed (for the time) modem, a 200 dpi scanner and a thermal (later inkjet or laser) printer was typically way below that of those 3 items purchased separately. On the other hand, those 3 items purchased separately could be used for many other things - much as the typical multifunction machines of today. In fact, many of the current MFC machines include fax capability that never gets used by most people, because it is bundled with other features that users want. It is actually cheaper for a manufacturer to include a fax-modem in one of these boxes than to have to stock twice as many different boxes.

Modems vary in speed and capability. Speed seems obvious, except that it isn't. Speed started at 110 bps with acoustic couplers and worked on up to 56 kpbs over the course of many years. Fax machines basically plateaued at 9600 bps, though some made it to 14.4 kbps.

However, speed also includes compression of numerous varieties, which can make a huge difference, particularly if that modem is being used to handle a room full of terminals (each of which separately might be OK with 2400 bps) or large downloads.

But capability varies too. The first modems were only modems. Starting with (or at least the first one to hit it big) the Hayes Smartmodem, modems often included a CPU that could handle auto-dial, auto-answer, compression/decompression and many other things. Those same CPUs eventually could handle fax as well. Of course, then we had the curse of the so-called winmodem - a modem without a real CPU, letting Windows (that wonderful real-time system optimized for handling modem traffic where there is no room for delays...) do all the processing for the modem to save a few $.

The really good fax modems went in the other direction - including sufficient memory and processing power on the board that the entire faxing process could be handled with very little host computer intervention. Those fax modems were not cheap, and it would in fact be a waste to use those where an ordinary modem would do.

On the other hand, many later high-quality modems (my personal favorite was Multitech) could be used as a "regular" PC modem, as a fax modem or as a modem with proper hardware handshaking to work well at high speed with non-PC devices.

One key issue on price of any consumer electronics device is volume. For quite a while, fax machines were produced in high volume as plug-and-play devices. That is quite different from stand-alone modems. Basically anyone could take a fax machine out of the box, plug one wire into power and another wire into a phone jack (and maybe move the phone that was in the jack to a second jack on the back of the fax machine) and done. Then all you do is load a piece of paper, dial the number of another fax machine, and it starts sending. Utter simplicity.

That is quite a different from PC modems. You had (typically) two choices:

• Open up your computer, install a card, set COM/IRQ/etc., install software (which was from floppies), figure out where/what to connect to (BBS, AOL, Compuserve), and so on

or

• Get the right cable (until the IBM PC came along there were a lot of different cables, and even afterwards there was 9-pin serial, 25-pin serial (but don't confuse it with 25-pin parallel, null-modem (which is the opposite of what you needed, but you might have one around from a printer, just to confuse things)), plug in the modem, configure your serial port (since it might not have been configured correctly originally - if you didn't have a modem it usually didn't matter), install software, etc.

Not a trivial task for the non-geek. Which meant fewer standalone modems were sold than fax machines, at least for regular consumer use, for quite a while.

I believe you experienced a classic example of market segmentation. The hardware is most likely entirely capable of handling data as well as fax, but the firmware in the modem was limited by removing the data functionality. The resulting modem is physically indistinguishable (except for markings) from a data modem but is sold at a lower cost to match its reduced capabilities.

This situation arose because the market price for a full data modem was substantially above the manufacturing cost, but a large market also existed for fax products at the time. Market segmentation by the above means permitted the manufacturer to maintain a high profit margin on data modems, while competing on price in the fax-modem market, without significantly complicating its manufacturing pipeline.

Later on, with the rise of the Internet, it was necessary to compete on price in the data modem market as well as the fax market. Hence the dedicated fax modem product category disappeared and combined fax/data modems became common, with the fax functionality being rarely used.

Fax machines use distinct frequency ranges for upstream and downstream transmission, with one direction receiving the vast majority of the bandwidth. Computer modems at 9600 and higher baud rates used he same frequency ranges for both directions, supporting high speed transmission in both directions simultaneously. This made it necessary to use a more complicated phone-line interface circuitry that would separate the received data from transmitted data in the same band.

Further, modulating data is generally easier than demodulating data, and many "fax modems" included circuitry to modulate data at 9600 but could only demodulate at 4800. This meant that when sending a fax to someone else, the device would operate at high speed to minimize the faxmodem-owner's phone bill, but when receiving a fax, the device would operate at low speed, increasing the other party's phone bill.

A pure fax modem back then would be slower than a data modem. Fax modems were generally 9600 baud and could possibly be limited to just Fax, although some modems could do both.

Still 9600 baud was slow even back then. Data modems were 28,800 baud or 56K baud and were much faster.

56K baud was the limit I reached before getting Cable Internet.

Of course, the faster the modem, generally the more expensive it was. That is why (in your question) data modems were more expensive.