3Com to Sell Cable Modems, Teaming Up With Cable Broadcasters
This could be an indication of things picking up for Aware. Remember USR (now a division of 3com) & Aware have signed a deal on DMT.
Santa Clara, California, Aug. 22 (Bloomberg) -- 3Com Corp.
said it will begin selling cable modems in October, giving a
boost to the fledgling technology of providing Internet access
via cable-television lines.
3Com's U.S. Robotics division is the world's largest maker
of conventional, dial-up modems used to connect computers to the
Internet and other networks over telephone lines. It's talking
to some large cable-TV broadcasters as partners for its foray
into cable modems.
3Com's entry into cable modems opens up a potentially large
opportunity for the company, and also gives the high-speed cable
modem technology the backing of a nationwide networking equipment
maker noted for its aggressive approach to advertising and retail
promotion.
``Cable modems will become the service of choice for people
who see the value of the Internet and of services like
videoconferencing, real-time video, and other leading-edge
Internet applications,'' said Mark Bercow, marketing director of
3Com's Broadband Business Unit.
Market leader 3Com has the manufacturing expertise to push
the price of a cable modem down to about $200 from almost $500
now, says one potential partner. 3Com aims to sell cable modems
through consumer electronics retailers, much as it sells its dial-
up modems, instead of the present system where cable broadcasters
buy the modems from manufacturers and rent them to consumers,
Bercow said.
The market for cable modems will grow to 4 million units
sold by 1999, Bercow forecast, from 200,000 this year and about
1.85 million next year.
``3Com doesn't get into any market where we don't think we
can be the No.1 or No. 2 player,'' he said. 3Com has a market
share of about 50 percent in dial-up modem sales, according to
market researchers VisionQuest.
Internet ``Pizza''
3Com is talking to several cable broadcasters about
supplying cable modems, Bercow said.
Cablevision Systems Inc. is one. It's now testing 3Com
modems and is close to reaching an agreement with the Santa
Clara, California-based maker of networking equipment, said John
Small, director of Cablevision's Internet cable-modem service,
Optimum Online.
The cable broadcaster is now offering to its Long Island,
New York, subscribers, a free trial of Optimum Online, which
offers unlimited Internet access to a home personal computer
through the cable-television connection.
More than 10 percent of Cablevision's subscribers are
agreeing to pay for the service, which costs about $35 a month,
when the free trial ends, Small said.
Customers are attracted by the speed of the service, which
runs at about 2 megabits a second, or 40 times the speed of the
fastest conventional modem. That makes possible such applications
as videoconferencing and watching television on your PC, Small
said.
Cablevision was attracted by 3Com's efficient manufacturing
that will be able to pare the price of a cable-modem to about
$200, compared with the $475 Cablevision now charges for modems
it buys from Bay Networks Inc.'s Lancity unit, Small said. It
also rents the cable modems to subscribers for $10 a month.
Woodbury, New York-based Cablevision intends to roll out
Internet services, and later on telephone services too, to the
rest of its 2 million subscribers, he said.
``We are aiming to sell this product (the Optimum online
service) like pizza,'' Small said. ``If we make it affordable and
easy to use, everybody will want a slice.''
3Com shares fell 9/16 to 52 11/16.
Cablevision shares fell 11/16 to 52 3/8.
--Jeff Ferry in the Princeton newsroom (609) 279-4093/esk |
