A softmodem is a software-based modem that uses minimal hardware. Unlike a conventional modem, the software in a softmodem is run on the host device, e.g., a computer, and uses the device’s resources. As it is cheaper to manufacture compared to traditional modems, it is popular for battery-powered devices. Likewise, the features of an answering machine and digital simultaneous voice and data are easier to implement in a softmodem.
Techopedia explains Softmodem
Compared to a hardware modem, a softmodem uses fewer chips and thus consumes less power. It is implemented with either a microprocessor or a digital signal processor. It is also smaller and lighter than a hardware modem and allows unlimited upgrades. Modem design parameters can be tweaked in the case of softmodems, thus providing greater flexibility in this regard. Another big advantage of a softmodem is that it does not break or overheat. Softmodems can be classified into two: pure software modems and controllerless modems. Pure software modems execute completely on the CPU of the host computer through hardware emulation, whereas controllerless modems execute most of their instructions on the card and use only a small amount of CPU power.
Reliability and performance are often cited as drawbacks of softmodems. They are machine dependent as well as operating system dependent, making them difficult to use in other host computers or devices owing to lack of driver support. Moreover, they consume CPU cycles on the host computer, thus affecting other applications.