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Technology Stocks : USRX

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To: Andrew G. who wrote (6403)12/8/1996 2:48:00 PM
From: Xpiderman   of 18024
 
A Tech Talk with MF Networx - from MFools AOL site

What's behind the struggle for 56K modems?

As soon as the idea for a modem that could run at 56 kilobits per second got started a committee was formed to standardize it. Members of this committee included Hayes, Zoom, US Robotics, Motorola, Cardinal, Ascend, Rockwell, Global Village and a host of other companies. Everyone took it for granted that the standard would be set before anyone actually went into production. Well, surprise! US Robotics decided to pull a fast one.

US Robotics and Texas Instruments shook up the status-quo by breaking away from the pack and announcing a 56Kbps Modem that is not compliant with the directions the standards were taking. This took a lot of the other modem makers by surprise and a division has been created in the modem world.

The US Robotics modem is a software upgrade that can be downloaded online and applied to existing 33.6 modem they have on the market today. There is a bit of clever marketing happening in the stores where a US Robotics 28.8 or 33.6 modem in a box displays a BIG sticker that says 56K, as if that is what the box actually contained. In reality, it means the modem is updatable. The upgrade can only be applied to US Robotics modems -- it is not compatible with any other modem maker.

The other half of the coin is represented by other illuminati of the modem world, including Ascend, which is the number one provider of multi-modem switches for ISPs. They are unified behind the Rockwell 56k implementation. Rockwell is the number one provider of integrated circuits to the modem industry -- their ICs are currently found in the vast majority of modem makers other than US Robotics.

Although US Robotics is touting a non-compliant modem they do have one thing going for them, they will be first to market. Those pretty boxes shouting out 56K in all the computer stores, during a Christmas season that is expected to be one of the best for the computer industry in years, will be hard to ignore. What remains to be seen is whether the head-start can be transformed in to an advantage down the line, or will US Robotics be disqualified for jumping the gun? They will be first to market, but it is starting to look like the vast majority of other modem makers are planning to stick with the Rockwell method which should follow the US Robotics modem by no more than six months.

Currently, the battle looks like this...

The front lines are being drawn with the people whom we consumers rely on for our Internet access. . . the Internet Service Providers (ISPs). Whichever company can win the hearts of the mass modem deployers, so will go the hearts of the consumers. After all, what is a 56k modem if your Internet Service Provider cannot support it?

US Robotics has the backing of Texas Instruments, Cardinal, and of course themselves, the top modem maker. Their modem has been accepted by some 30 Internet Service Providers representing some 15 million customers. "By beating everyone to market, USRX stands a good chance of having its version established as a standard," said Robert Young, vice president of products for Cardinal Technologies.

Rockwell, on the other hand, has garnered the support of 300 Internet Service Providers and a commitment to use their ICs by Hayes, Boca, Zoom, Lucent, 3-Com, Diamond, TDK, Global Village and most importantly of all Ascend, the major supplier to ISPs. "We [USRX, Lucent Technologies, Motorola and Rockwell Semiconductor Systems] have all been working on this technology, but no one else was prepared to go public before the standards were set," one executive said.

He added that since all of these companies belong to a 56K-bps standards committee, there might be some animosity toward USRX, which will make it difficult for the company to get its version of 56K-bps adopted.

Transmitted: 12/4/96 8:08 AM (techtalk)</HTML>
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