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To: Hal Barnett who wrote (1695)	7/27/1998 2:39:00 PM
From: Jacob Snyder	Respond to of 12823

Motorola Announces Shipments Of Cable Modems Reaches 170,000 By QUENTIN HARDY Staff Reporter of THE WALL STREET JOURNAL July 27, 1998 Motorola Inc. announced Monday that it has shipped 170,000 cable modems through the first seven months of the year, likely making it the leading producer of the increasingly popular high-speed communications technology. Since entering the business in 1996, the Schaumburg, Ill., electronics manufacturer says it has shipped a total of 250,000 cable modems, which transfer computer data at very fast rates over cable operators' networks. About 80,000 units were shipped in 1997, meaning Motorola is on track to quadruple sales of the product this year. Cable operators are racing to deploy cable modems in order to develop a new line of business that can take advantage of upgraded networks. Through two consortiums -- AtHome Corp. and a joint venture of MediaOne Group Inc. and Time Warner Inc. -- the operators are offering high-speed Internet access over cable modems to customers for $35 to $45 a month. Telephone companies are starting to offer a rival service called digital subscriber line, but generally at lower speeds or higher prices. Motorola had previously kept its sales numbers private, but decided to publicize its sales "now that the market is heating up," said Randy Battat, senior vice president of Motorola and head of the company's recently-formed Internet and networking group. Motorola's openness may stem from changes within the cable modem industry, which now includes competitors such as Bay Networks Inc. and 3Com Corp., but is set to see vastly more competition next year, when production standards turn cable modems into both a retail consumer product and commodity chips. "The standards will drive the industry," Mr. Battat said. Standards are especially important to personal-computer makers, who plan to offer models next year that are equipped with cable-modem chips, as well as with competing modems from phone companies for digital subscriber line. Cable operators also plan to include cable-modem chips in the next generation of digital set-top boxes for television. "Motorola will be competing with a lot of consumer-electronics companies next year -- something like 30 players," said Michael Harris, an analyst with Kinetic Strategies Inc. of Phoenix. He called Motorola's 1998 sales figures "enough to put them at the top of the list -- Bay expects to do 200,000 units in all of 1998." A spokesman for Bay Networks Inc. said the company has shipped 225,000 cable modems since mid-1995. Bay Networks has shipped about 105,000 units in the first half of the year, he said, and would likely ship 90,000 units in the third quarter. At about $350 per cable modem, the sales won't make a substantial difference to Motorola, which has about $30 billion in annual sales. But the market is expected to grow rapidly: Mr. Harris projected that overall sales of cable modems should reach 500,000 this year, 1.1 million in 1999, and three million in 2001. DSL subscribers will number about 1.2 million by 2001, according to Telechoice Inc., a Boston research company.