From Wall Street Journal:
Conexant Systems Says It Is Planning Multiple-Function Cable-Modem Chip
By DEAN TAKAHASHI
Staff Reporter of THE WALL STREET JOURNAL
Conexant Systems Inc. is planning a chip that contains all electronics
necessary for a cable modem, a potential cost reduction for the
Internet-access devices that poses competition for fast-growing Broadcom
Corp.
The Newport Beach, Calif., company spun off in December from Rockwell
International Corp., said its forthcoming CN9414 InfoSurge product
handles communications functions that typically require multiple chips.
Besides hardware savings, Conexant said the chip can be upgraded with
new software to adapt to changes in communication standards.
Cable modems can transfer data as much as 1,000 times as fast as
standard computer modems, giving users faster access to graphics and
pictures on the Web. The new chip, which is being announced Monday,
could reduce the price of a modem by about 25%, said Dwight Decker,
Conexant's chief executive officer.
Mr. Decker is hoping the product will leapfrog Broadcom, the Irvine,
Calif., chip maker that has about 80% of the cable-modem chip market.
That position has helped Broadcom's stock to quintuple since it went
public last year.
Henry T. Nicholas, CEO of Broadcom, said he expects to retain a
significant advantage. Where Conexant relies on software to adapt to
changing standards, Broadcom believes it has an inside track in setting
them. Consequently, it can build features into circuitry to produce
less-expensive chips.
The race is too early to call. Conexant won't go into volume production
of its chip until the third quarter, giving Broadcom time to come up
with other responses.
"Sure Broadcom has the leadership now, but the market is still small,"
said Gerry Kaufhold, an analyst at market researcher Cahners In-Stat
Group in Scottsdale, Ariz. "But they're going to get more competition as
the market becomes more attractive to the bigger companies."
Mr. Decker said the cable modem chip could also be used in digital
set-top boxes, which can add new services such as Internet access and
telephone service to traditional cable TV service.
Broadcom's Class A stock closed Friday at $60.1875, off $2.8125, on the
Nasdaq Stock Market. Shares of Conexant declined $1.1875 to $17, also on
Nasdaq. |
