The word modem is actually short for Modulator/Demodulator. (Man, was I excited when I first found that out.) A modem is a communications device that can either be installed internally or used externally. It allows computers to connect to each other and transfer data over telephone lines. The largest downside to modems is that they are rather slow. Because of their lackluster speeds, many multimedia capabilites such as streaming audio and video have taken awhile to catch on. This will most likely change, however, as cable and DSL modems replace the slow 28.8 and 56K modems we've been using for so long.
Meaning of MODEM in English
English glossary of computer and Internet terms. Английский глоссарий компьютерных и Интернет терминов. 2012