An internal modem is actually a card which is inserted into a slot on the computer's internal expansion bus. Internal modems are convenient, fast, and don't take up any desk space. Unfortunately, there are occasional problems caused by conflicts with existing serial ports or other computer hardware. Mac internal modems do not suffer from the conflict problems that their PC counterparts do, but few Macs are equipped with a comm slot so you may have trouble taking your comm slot modem to a new or different Mac. An external modem is a box that connects to a serial port on the back of the computer.
External modems work with virtually any computer with an available serial port on the back.
They have useful status lights on the front which indicate the status of the connection, they can be turned off and reset in the event of a lockup or other problem, and they can be moved between different computers. To use an external modem, you need a free serial port on the back of the computer, and when you purchase the modem you also need the correct cable. For PC users, that usually means a DB9-DB25 modem cable. Fortunately, Mac users can purchase Mac-packaged modems that usually include Mac software and the correct Mac cable. A few years ago, modem manufacturers realized that modern processors were becoming fast enough that tasks which used to require expensive dedicated chips on the modem could instead be accomplished by software running on the computer's processor, utilizing the multi-tasking capability of modern computers.