Matt,
With all due respect, I'm dubious of your information sources.
Inventory levels must be watched with all vendors. I hear that USR is the most exposed with 28.8 and 33.6 product in distribution (about 4 months worth). Is all of that product upgradable to 56K?
USR is the only modem vendor where channel inventory is not a problem. Being a Boca follower, you probably never heard the story of the street sign on the USR campus in Skokie that read "Sorry for our mess - we're moving to 56k". That was early last summer, before anyone had ever heard of 56k, and caused quite a stir over on the USRX thread. The sign mysteriously disappeared within a couple of days.
USR has been quietly making and selling millions of 56k upgradeable modems since last August. They created their own installed bases to leverage deployment of 56k technology. They enjoy even grater leverage on the ISP end of the connection, because all of the modem cards for their RA servers are software upgradeable to 56k. The K56Flex camp has practically zero installed base to leverage off of, on either the client or server side.
A snapshot of the current market shows that most of the product selling is low cost 33.6 modems not 56K. Boca, Diamond, Zoom, etc. all sell this product.
Boca, Diamond and Zoom have all categorically stated there there is no demand for their 33.6kbs modems, and they are stuck in between a product transition. Modem sales are not lagging, but market share is shifting, towards x2 and away from everyone else.
...aging inventories of product that is so 6 months ago must be addressed. I'm sure USR doesn't want that sold product back.
Again, USR manuevered around this issue by converting the inventory channel to upgradeable product before making an announcment. However, all of their competitors continue to face this problem even today.
This whole 56K phenom has screwed with 1-2 quarters revenue of every manufacturer.
Mark Remmisong, USR CFO, announced this week that USR would achieve analysts' forecasts for revenues and income for the just completed quarter. So, it would seem that the 56k transition has not screwed with the revenue of every manufacturer.
The Bocas and Zooms have a long, uphill road ahead of them, IMO. |
