Did y'all see this: Rockwell Delay In Modem Chips Appears Minor
Geez, the WSJ has sent a snoop over to Seal Beach. Don't remember that they cared that much about getting the facts when USR had their delay. Strange that the ROK delay appears "minor", while USR's delay was a major setback for USR, according to all the talking heads. Hmfff. DK
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Postponed Shipments Give
U.S. Robotics Opening
To Push Its New Device
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By Frederick Rose
Staff Reporter of The Wall Street Journal
SEAL BEACH, Calif. -- Rockwell International Corp.'s delay in its new line of high-speed chips for computer modems, while embarrassing, doesn't appear a major setback in its battle with U.S. Robotics Corp. to dominate a hot new market.
The design problem revealed by Rockwell Friday is expected to cause a one- to two-week delay in shipments of semiconductor chips, the company said. The glitch itself is likely to be resolved readily, according to analysts. "I doubt that any modem makers are going to flee Rockwell because of this," said Lisa Pelgrim, senior analyst at Dataquest Inc. in San Jose, Calif.
U.S. Robotics, however, is expected to take advantage of Rockwell's delay. Both companies are pushing modem designs -- with incompatible standards -- for telephone transmission of computer data at speeds of up to 56,000 bits a second. Meanwhile, problems for Rockwell were already apparent, as Motorola Inc. said Friday that it has suspended shipments of its modems based on Rockwell's chips. Motorola said it will exchange about 3,000 modems that may be affected by the chip problem. Earlier this year, U.S. Robotics suffered its own two-week delay in market introduction of its new modem.
Rockwell said its modem chips encountered unexpected trouble when operating through certain telephone networks during field trials. Dwight Decker, president of Rockwell's semiconductor systems division, said in an interview that transmissions speeds dropped by about 5,000 bits a second when modems made with Rockwell's chips operated through certain phone networks, which he declined to specify. Industry insiders say that Rockwell, which had done most of its field tests in Western states, ran into trouble when modem makers began testing the chips on phone networks in Eastern states.
The problem, Mr. Decker said, is centered in about 100 lines of programming, among more than 50,000 lines that operate the modem set's "microprocessor." New software has already been developed and is currently being tested, he said. It will be available to current owners of modems based on Rockwell chips. Modems and new chips to be shipped soon will have the updated software.
Rockwell investors appeared undaunted by the delay. The company's stock gained $1.875 a share in Friday's rising market to close at $67.875 in New York Stock Exchange composite trading. U.S. Robotics shares fell $1.5625 to $57.6875 on the Nasdaq Stock Market activity, apparently reacting to a $1.065 a share decline in shares of 3Com Corp., which last month agreed to acquire U.S. Robotics in a stock swap then valued at about $6.6 billion. Shares of 3Com closed Friday at $34.3125, nearly $5 lower than the day the U.S. Robotics acquisition was announced.
Rockwell and U.S. Robotics have been locked in a battle over the new technology, which nearly doubles the speed at which information can be downloaded from remote computers through ordinary phone lines. Rockwell makes chips used by dozens of modem makers that collectively hold close to 70% of the U.S. modem market. U.S. Robotics, which uses chips made by Texas Instruments Inc. and special software, is the nation's largest single modem maker, controlling about 25% of the market. The remaining market share is held by modem makers who use other chips. |
