Frederick D. Lawrence, Chairman and CEO Interviewed by George S. Mack
July 18, 2000
telecommanalyst.com
Instead of wires and cables coming into your home or office, imagine that you have wireless, high-speed, broadband connectivity for all your data, voice and video. ADAPTIVE BROADBAND (ADAP) has designed and engineered a platform that solves what is referred to as the "last mile" problem — how to connect the end user to the telephone or Internet service provider. The Silicon Valley-based company would love to replace the poles and lines that are strung and buried in your neighborhood with a box smaller than one square foot attached to the side of your building. The company is now in the process of selling off its legacy businesses in satellite and microwave radio communications so that it can concentrate on developing its wireless systems. Analyst Pete Peterson of Prudential Volpe Technology Group is estimating that ADAPTIVE BROADBAND will ring up $120 million in sales this fiscal year, followed by $150 million in fiscal year 2001.
[THE TELECOMM ANALYST — GEORGE S. MACK] Why is your platform unique?
[FREDERICK D. LAWRENCE] Our platform is designed to accommodate a variety of frequencies — all the way from the low-end of 1.9 GHz up to 42 GHz. That's important because looking at the world — and we are a global company — we have to accommodate the availability of frequencies in the United States and the different frequencies available worldwide. Initially, our platform was designed to offer high-speed Internet access, but now we've also developed it so it can offer simultaneous voice, data and video.
[GSM] Could the end user be mobile?
[FDL] Our platform has been designed to offer both portable — meaning you could take your computer and sit in your backyard — and full mobile — meaning you could work on your computer traveling at 100 miles per hour in an automobile.
[GSM] So the advantage here is flexibility?
[FDL] Absolutely, and hence the name of our company, ADAPTIVE BROADBAND. And we believe that our patented unique architecture offers such a wide array of capability that it's flexible enough for the different segments of the market. In fact, the world is not becoming one-size-fits-all; it's becoming a world of choice.
[GSM] I understand you're getting ready to announce some partnerships. Where?
[FDL] Over the next several months, we will announce partnerships for market access, not just in the U.S., but in Europe and Asia as well. We already have one partnership that we've successfully started, and it is now generating revenue for us in China through a company that trades on the Hong Kong Stock Exchange called CASIL TELECOMMUNICATIONS HOLDINGS.
[GSM] What does your system look like physically?
[FDL] We sell a system that's both hardware- and software-based. If you can imagine a device that's 10 inches by 10 inches by 3 inches attached to the side of your home or office on one end of the system, and on the other end of the system, it would look a little bit like a cellular antenna. All that goes into your home or business is a little cable that looks like a cable TV connection. It would connect to the RJ45 jack on your laptop or into your Ethernet ring, and you're in business.
[GSM] Who is manufacturing the box for you?
[FDL] SOLECTRON (SLR) in its Everett, Wash., plant.
[GSM] Normally, who is your customer?
[FDL] My customer is the OEM [original equipment manufacturer], like an ALCATEL (ALA) NORTEL NETWORKS (NT) , LUCENT TECHNOLOGIES (LU) , ERICSSON (ERICY) or NOKIA marketguide.com. You pick the name, and I'm not trying to say we're dealing with any of those or not, but they would then take our product and sell it to the telephone company or to the telephone company's competitor, or to both. And then the end user is the end user.
[GSM] Back in May, your CFO Donna Birks said the size of your market is in the $100 billion range. How much of that can you get during the next five years?
[FDL] If you would just look at the capitalization of last mile solutions globally, I think you'd agree that the $100 billion Donna refers to is too small a number. Be mindful that, as you and I are speaking, our equipment is being installed in places in China where wireless broadband is the first technology humans have ever had. They've never seen a telephone, and they're now getting Internet access. We tend to become U.S.-centric in our thinking. If we say that market is spread out over the next 10 to 15 years, we believe our platform can address that entire market. Now, how much of it are we likely to get is the real question.
[GSM] What about the life span of the technology?
[FDL] First, let's make sure we don't get caught up in the 18-month syndrome, meaning that the technology is only around for 18 months. If you take a look at the platform we've developed, because of the breadth of frequency opportunities — from 1.9 GHz all the way through 42 GHz — we can touch every frequency that will be made available in the world, anywhere. This is a platform that's going to be around for a long time because of its design, the patents that exist on the software, and the fact that we are chipset-independent. Our software will ride on those chipsets very nicely. That means the 25 Mbps product we have in the field today will be complemented by a 100 Mbps product later this year. And we will continue to evolve the data rate and reduce prices over time.
[GSM] So far, how is the acceptance of your product?
[FDL] What we see here is an industry forming. We launched our first product about a year ago. We now have orders for about $1.5 billion of this product around the world, and these contracts range from three to five years; that's growing every day and every week. We're very much on the front end of an evolution. We give service companies a wireless option. We're not the only answer, but we're an answer. |
