CHICAGO, Feb 24 (Reuter) - Shares of U.S. Robotics Corp rose 3 at 59-5/8 at midday Monday after the company said it began shipping its long-awaited x2 modems, which provide a high-speed connection to the Internet.
Although analysts said the release was about a week later than anticipated, they said they expect the new modems to give U.S. Robotics' stock a boost in the near-term and provide increased revenues in its fiscal third quarter.
"The stock has been going down for the last week because you had the
bears...saying it doesn't exist or it doesn't work," said Donaldson, Lufkin & Jenrette analyst Eric Buck.
"Now the product is out the door and dispels the stories," Buck added.
"It's well ahead of competitive products," Amar Senan, an analyst for Volpe, Welty & Co, added. "Certainly for the third quarter we're going to see some good numbers."
In addition, America Online Inc said it will hold general field trials for the x2 technology. The x2 modems allow users to download information from the Internet at speeds up to 56 kilobits per second or nearly twice as fast as today's typical 28.8 kbps modems.
"Our view has been the ISPs (Internet Service Providers) are the key to the uptake" of this new technology, said Rakesh Sood, an analyst for Hambrecht & Quist.
Because there is still no standard for the 56-K modems, the users' technology and the ISPs must work together.
U.S. Robotics' new x2 modems will soon face a competitive challenge. Rockwell International Corp , leading an alliance of companies, has developed 56-K technology. Rockwell said it expects products using its technology to hit retail shelves in March.
Cardinal Technologies Inc ( crtk ) said Monday it will ship its own 56-K modems in March using the x2 technology.
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