Here it is guys. Bad paste job but nonetheless...
It's only one guys opinion, I don't think it had any impact. This stock didn't stay under 13 for long, and should make a bit of a jum p tommorrow, but we will see. Happy reading,
Lucent's Wireless
LAN Play
By Jim Seymour
Special to TheStreet.com
3/6/00 2:36 PM ET
For about six months, I've had this idea of
constructing a kind of taxonomy of the
wireless market, something like the analyses
I've done in the past of the fast-access market
and other tech investing opportunities. I've
even started a few times. But I've never
finished that wireless-world column because
it's turned out to be an idea so big that I can't
get my hands around it in a single column -- or
even a two- or three-part column.
There's voice wireless, data wireless, fixed
wireless, office wireless, home wireless,
facility wireless, 2G, 2.5G, 3G, TDMA, CDMA,
GSM, wireless security -- you get the idea.
So I'm going to be realistic and do this in a lot
of little chunks. Investors don't need grand
visions, after all, but specific investing
opportunities. From time to time, I'll try to knit
together a cohesive overview of these
exploding markets.
Last week, Lucent (LU:NYSE - news -
boards) got a lot of press because of its
decision to spin off its efforts in three
slower-growing areas: its PBX switches, its
Systimax cabling business and its enterprise
LAN division. Good idea. The market agreed
- after trading was stopped briefly, to allow
the market to digest the news -- and the share
price responded with a 10-point jump.
There was more good news from Lucent last
week, but it got buried in the coverage of the
upcoming spinoff. Lucent, which has for some
time had a presence in the local-area network
wireless market with its very good WaveLAN
system, rolled out its new Orinoco wireless
LAN products. They're solid products -- well
designed, well integrated, priced right.
But the vision Lucent brings to
the wireless networking market
is ultimately going to be more
important than the individual
products in the Orinoco series.
And while it's hard for any new
product line to have a significant
bottom-line impact on an entity as large as
Lucent -- with revenue this fiscal year (ending
Sept. 30) pushing $40 billion -- Orinoco could
be a key technology platform for Lucent over
the next few years.
Today, the story behind Orinoco; tomorrow,
the far-reaching vision beyond the product
line.
Wireless networking is playing into several
key trends: the move towards notebook PCs,
the explosion in home networks and the boom
in fast-access Net connections.
I've been using wireless LANs in my offices
for about four years. For desktop PCs, it
doesn't make that much difference. But once
you join what my son calls the "Notebook
Generation," you get hooked on wireless
LANs, and fast. In a home, wireless
networking makes even more sense given the
difficulty of retro-wiring a typical house for a
LAN. Our frequent moves also argue for not
making that substantial investment in pulling
wire into existing homes, but instead going
wireless. Needless to say, wireless networks
are perfect for apartment dwellers.
There have been compromises, though.
Existing lower-end wireless LAN systems
have topped out at about 2 megabits per
second (Mbps), about a fifth of the speed of
standard wired Ethernet -- and just a 50th the
speed of fast Ethernet. (Standard Ethernet
networks rarely deliver the full 10-Mbps speed
of the spec, but it's a fair comparison because
2-Mbps wireless Ethernet LANs rarely deliver
much over 1.6 Mbps themselves.)
In practice, that hasn't mattered much. Give
me 1.6 Mbps on a wireless,
always-connected notebook I can carry
anywhere in the office -- to meetings, to the
ibrary, to the tech shop -- vs. 10 Mbps but only
at the end of a wire, and I'll always choose the
wireless option. Both still seem more or less
instantaneous for retrieving files, printing,
sending email and accessing the Web.
A second problem has been the lack of
interoperability among wireless LAN products
from different vendors. The classic Ethernet
802.11 standard was ignored in developing
current wireless LAN products, so once you
bought into one vendor's system, you stayed
there -- or fielded a crop of machines that
couldn't talk with each other.
So moving to a real 11-Mbps wireless
standard is an important step. And developing
to a standard supported by multiple vendors is
n even bigger step. Presto: the new IEEE
Ethernet 802.11B spec, currently supported
by most of the important wireless LAN
players, including Lucent, Cisco
(CSCO:Nasdaq - news - boards), 3Com
(COMS:Nasdaq - news - boards), Nokia
(NOK:NYSE ADR - news - boards),
Cabletron (CS:NYSE - news - boards) and
Aironet (AIRO:Nasdaq - news - boards).
Wireless LANs aren't yet quite plug-and-play,
but they're getting close.
Higher-end systems, such as Lucent's
WaveLAN and Proxim's (PROX:Nasdaq -
news - boards) superb RangeLAN 2, have
been solid performers on the office LAN level
for years. They've been fast, reliable ... and
expensive.
Now, with the 802.11 generation of wireless
LAN products, Lucent and its allied vendors
have cut prices sharply: You can today buy an
Oinoco PCMCIA card to plug into your
notebook for about $150, street price. Plus,
you can buy the required RG-1000 home hub
and network-gateway device -- the box which
connects to your main PC, or to an existing
wired LAN, with which all those
PCMCIA-card-equipped notebooks
communicate -- for about $250 to $300.
Orinoco cards for desktop PCs are also
available for about $150.)
Suddenly wireless local-area networking is
price-competitive and
performance-competitive with wired LANs.
To be sure, the price per machine of wired
LANs is dropping, too, with good-quality
network cards for desktop PCs selling for as
little as $30 (though wired LAN PCMCIA
cards for notebooks cost about as much as
the new Orinoco-generation wireless cards).
But that ignores the considerable cost of
installing cable to all the places you want to
plug in those wired PCs.
When you fold in that "sunk cost" in
on-premises LAN wiring, wireless LANs look
even better.
Tuesday: How Lucent and friends plan to put
you online everywhere.
Jim Seymour is president of Seymour
Group, an information-strategies consulting
firm working with corporate clients in the U.S.,
Europe and Asia, and a longtime columnist
for PC Magazine. Under no circumstances
does the information in this column
represent a recommendation to buy or sell
stocks. At time of publication, Seymour was
long Lucent, although holdings can change
at any time. Seymour does not write about
companies that are current or recent
consulting clients of Seymour Group. While
Seymour cannot provide investment advice
or recommendations, he invites your
feedback at jseymour@thestreet.com. |
