To: jhild who wrote (14481 ) 4/3/1998 12:49:00 PM From: Scrapps Read Replies (2) | Respond to of 22053
Coming Soon: Megastores for Megamodems Cable operators and telcos line up retail outlets for high-speed gear By Carl Weinschenk, Executive Technology Editor So retail is for suckers? Don't tell that to Jim Dolan, CEO of Cablevision Systems Corp. (Woodbury, N.Y.), who plunked down about $100 million to buy out a bankrupt chain of consumer electronics stores. Dolan's plan is to ride the retail route directly to Cablevision's customers, selling them everything they need to get the cable company's services. Cable modems are at the top of that list. Dolan isn't alone in his play for retail space. Providers of cable modems and digital subscriber line services are starting to shop for shelf space in retail outlets. Retail marketing had a lot to do with the decision by General Instrument Corp. (GI, Chicago) to sell 5 percent of its equity to Sony Corp. of America (New York). GI is offering its SURFboard cable modems in CompUSA Inc. (Dallas) stores in Jacksonville and Miami, Fla., and Encinitas, Calif.--all places where cable data service using the GI modem is available. In late February, 3Com Corp. (Santa Clara, Calif.) was scheduled to start retail trials in Toronto and either St. Louis or Philadelphia for its U.S. Robotics VSP and VSP Plus cable modems, according to William Markey, director of marketing for 3Com's cable access business unit. On the DSL side, US West Inc.'s 40-city rollout will likely include retail tests in selected areas by midyear, adds Greg Gum, executive director for MegaBit Services, the DSL service line developed by US West's !nterprise Networking Services (Denver). The scramble to establish a retail presence for high-speed services already is making for some bad blood in eastern Canada, where New Brunswick Telephone Co. Ltd. (NBTel, Saint John, New Brunswick) is trying to use its clout to counteract retail inroads made by cable operator Fundy Communications Inc. (also in Saint John), which is using dataXcellerator cable modems from Scientific-Atlanta Inc. (Norcross, Ga.) for one-way data service. The Scientific-Atlanta modem is now available in about 30 stores in New Brunswick. NBTel not only is planning a midyear retailing blitz of its Vibe high-speed service but also is aiming to keep Fundy out of some stores by signing exclusive marketing agreements with retailers, says NBTel product manager Jeff Duff. While they both offer high-speed data access, cable and DSL modems are different retail products. For cable modems, the big challenge will be gaining retailer acceptance as two-way service modems replace products like dataXcellerator and SURFboard, which use telephone lines for return paths. Retailers may be reluctant at first to give shelf space to two-way modems because, depending on network upgrades, not every cable customer will be able to use them. This also will give retailers the extra job of checking potential customers to make sure they can handle the service. By buying its own retail chain, Cablevision can eliminate some of these concerns--and make sure that sales reps won't push DSL instead of cable modems. Cablevision's purchase of Nobody Beats the Wiz Inc. (Carteret, N.J.) was finalized last month. Telcos face their own challenges with DSL. The slow development of standards has given cable modems a year's head start, notes Lisa Pelgrim, a senior analyst for market watcher Dataquest Inc. (San Jose, Calif.). DSL services also lack tie-ins to cable Web sites, such as CNN and ESPN. Providers and equipment makers on both sides realize that retailing may be the key to success for high-speed services. "Our belief is speed sells to a certain point," says 3Com's Markey. "As you cross over to mainstream markets from early adopters, you have to show more benefits than speed." teledotcom.com btw. Burma Shave signs...not a bad idea...we'd be well beyond 4 million SI post by now.