The word modem is actually short for Modulator/Demodulator. (There's something you can really impress your friends with). A modem is a communications device that can be either internal or external to your computer. It allows one computer to connect another computer and transfer data over telephone lines. The original dial-up modems are becoming obsolete because of their slow speeds and are being replaced by the much faster cable and DSL modems.
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This page contains a technical definiton of Modem. It explains in computing terminology what Modem means and is one of many hardware terms in the TechTerms dictionary.
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