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To: P2V who wrote (3429)	1/11/1998 8:48:00 PM
From: jkb	Respond to of 6980

Article regarding Asian exposure for network vendors. -Jay ____ January 12, 1998, Issue: 1091 Section: News Network vendors face slowdown Tom McHale Asia's economic meltdown has pulled the rug out from under one of network equipment and chip suppliers' most lucrative markets. Six months ago vendors were crowing about Asia as a launchpad for skyrocketing sales. San Jose-based Cisco Systems Inc., for example, showed 120% growth in China, Hong Kong, and Taiwan in fiscal 1997. But with banks from Jakarta to Seoul straining under the weight of loans gone bad, network vendors have lost a major market. The extent of the slowdown wasn't clear until late last month. In-Stat Inc., Scottsdale, Ariz., had forecast 24% growth in worldwide sales of networking equipment, down from a sizzling 48% in 1996. But, in December, it revised its 1997 estimate to 16%. The total value of the global market in 1997 is expected to be $26.4 billion. Last week, 3Com Corp., Santa Clara, Calif., said that a 91% drop in profits for the second quarter of fiscal 1998 was due in part to Asia's slowdown. Cisco, which has dominated the network equipment business, acknowledged that Asian revenue would drop from 15% of total sales in fiscal 1997 to between 12% and 13% in fiscal 1998. The one bright spot is China, where sales remained strong at the end of the year. Cabletron Systems, Rochester, N.H., which last week announced layoffs and restructuring, is moving staff from Singapore to China, where it is playing catch-up with Cisco, 3Com, and others. With sales falling in Southeast Asia, South Korea, and Japan, network equipment makers are hoping that China won't succumb to Asia's malaise. China's banks, however, are carrying bad loans that dwarf those of South Korea. The network vendors are biting their nails and betting that Beijing's leaders will keep the economy insulated from the real world. Success in China depends on distributors capable of providing Chinese-language support. Cisco, 3Com, and Santa Clara-based Bay Networks Inc. have battled over channels for several years. Equipment vendors are looking to chip makers to help cut the cost of building 100-Mbit/s Ethernet switches by up to 50% in 1998. But even that level of margin slashing may not be enough to keep sales moving in the new Asia.

To: P2V who wrote (3429)	1/11/1998 8:50:00 PM
From: jkb	Respond to of 6980

The Week MONDAY, JAN. 12: Lattice Semiconductor Corp. reports earnings. Investors will be looking for specifics on how much business was delayed after the dissolution of the company's sole Korean distributor. TUESDAY, JAN. 13: Intel Corp. reports earnings, which should include its capital-spending plans for the year. In October, the company said its fourth-quarter earnings would be only slightly higher than the third quarter's $6.2 billion. Also reporting: Motorola Inc., Advanced Micro Devices Inc. "On or before" this date, Intel expects to receive notice on whether the Federal Trade Commission plans to challenge the pending acquisition of Chips and Technologies Inc. WEDNESDAY, JAN. 14: Apple Computer Inc. reports earnings, which are expected to be in the black. Also reporting: Alliance Semiconductor Corp., Integrated Device Technology Inc., Linear Technology Corp., Rambus Inc. THURSDAY, JAN. 15: Avant! Corp. and Technology Modeling Associates Inc. shareholders meet to vote on the companies' proposed merger.

To: P2V who wrote (3429)	1/11/1998 8:52:00 PM
From: jkb	Read Replies (1) \| Respond to of 6980

January 12, 1998, Issue: 664 Section: Networking IP Telephony Lure -- Bay to buy Netspeak, plans products to send voice and fax over IP networks Beth Davis Bay Networks Inc. is joining the rush into IP telephony, agreeing to buy Netspeak Corp. in a move to develop gateways, routers, and access switches that handle voice and fax traffic over Internet Protocol networks. The stock deal, valued at $37.6 million, follows Cisco Systems' $160 million agreement last month to buy IP telephony developer LightSpeed International Inc. By integrating Netspeak's technology, Bay plans to roll out by mid-year a Baystack gateway that sits behind a PBX and converts voice and fax traffic into packets that travel over IP networks. In the first half of 1999, Bay will introduce a carrier-class IP router for sending voice and fax traffic over telecom networks. Bay and Netspeak executives outlined a number of multimedia applications, such as call centers and voice-enabled Web sites, that can take advantage of the forthcoming products. But initially, "the compelling value proposition is straight cost savings, as companies move long-distance traffic from traditional services onto IP networks," says Bay CEO Dave House. Jim Kunzman, director of communications services for Bay customer Nielsen Media Research in Dunedin, Fla., sees potential in piping voice and fax traffic between offices. But as with any major infrastructure change, he says, "we're a bit conservative, so we will wait and see." Brendan Hannigan, an analyst with Forrester Research Inc. in Cambridge, Mass., sees the IP telephony market generating about $2 billion in service-provider revenue alone by 2002. "While we're not so crazy about LAN telephone calls, because calls within our offices work well, you can have gateways between PBXs to interconnect branch offices," Hannigan says. "The application is for wide-area connectivity, and you can save money on toll charges, for example."