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To: Moonray who wrote (23151)	10/23/1998 10:45:00 AM
From: miklosh	Respond to of 45548

Smart devices to outsell home PCs by 2001 - report NEW YORK, Oct 22 (Reuters) - Growing popularity for devices that free users from desktop computers means that by 2001 these smart appliances will outsell consumer desktop PCs in the United States, a recent industry report shows. Research by International Data Corp. indicates U.S. unit shipments of information appliances ranging from handheld computers and game machines to Internet-connected televisions and video telephones will outnumber those of consumer desktop personal computers by 17 percent in 2001. With the average cost of these devices below $500, rather than the $1000-plus cost of PCs, total dollar sales of the smart gadgets are unlikely to pass that of PCs, according to the report's author, Sean Kaldor. But with consumers wanting to get all their information from one screen and carry their computers in their pockets, Kaldor sees the appliances ripe for mass market appeal. The hottest items in this market are Internet-smart hand-held devices like 3Com Corp.'s (Nasdaq:COMS - news) Palm Pilots and devices running on Microsoft Corp.'s (Nasdaq:MSFT - news) Windows CE software, the report said. The notebook-sized devices with fold-away screens and keyboards are the most popular information appliance, representing about a third of all sales. IDC expects these hand-held devices to continue to be the most popular smart appliance in 2002. In NetTV, the United States' TCI Group Inc. (Nasdaq:TCOMA - news), the cable unit of Tele-Communications Inc., is looking to get into the service market, Kaldor said. European players in this field include, Cable & Wireless Plc. (quote from Yahoo! UK & Ireland: CW.L), Canal Plus and BSkyB Corp., whose main shareholder is media magnate Rupert Murdoch's News Corp. Dominating the market for Internet gaming devices are Japans' Sega Enterprises Ltd. , Sony Corp. and Nintendo Co Ltd. . These companies have such a hold on this category they leave little room for vendors like Tiger Electronics, the report said. Kaldor raised a red flag on information appliances such as low-cost, consumer network computers that provide Internet access and applications. He said this idea has been killed by low cost PCs -- already down to $699 -- and NetTVs that cost $200 or $300. Kaldor is also less keen on screenphones which have had initial success but face competition from NetTV. Nortel Networks (Toronto:NTL.TO - news) and Alcatel Alsthom (NYSE:ALA - news) make phones that provide video images and voice services. Kaldor said the industry has been waiting for new phones from both companies. He said their current screenphones are expensive at around $700 or $800 each. He sees NetTvs winning this market because of their superior screen resolution, screen size and more manageable price tag. In 1998 IDC expects a total of 5.8 million information appliances to be shipped worldwide, generating dollar sales of $2.2 billion. The Framingham, Mass. research company sees that figure rising 76 percent annually between 1998 and 2002. By 2002 shipments are expected to have risen to 55.7 million units creating annual global sales of $15 billion.

To: Moonray who wrote (23151)	10/23/1998 1:07:00 PM
From: joe	Respond to of 45548

INTERVIEW - Lucent does not see slowdown October 23, 1998 6:34 AM EDT By Jessica Hall NEW YORK, Oct 22 (Reuters) - Lucent Technologies Inc. <LU.N > said it does not expect demand for telecommunications equipment to slow, despite concerns among its competitors that phone companies may curtail spending on network equipment. "We have not seen a slowdown," Lucent's Chief Financial Officer Donald Peterson said Thursday in an interview after the company posted its fourth quarter earnings. "We see the market growing (revenues) at about 14 to 15 percent. That's a long-term growth rate, but we feel that's generally indicative of what the market did in 1998 and what we expect it to do in 1999," Peterson said. Lucent, the Murray Hill, N.J.-based telecommunications equipment giant, said it expects to continue to grow at a faster rate than the overall market. Earlier Thursday, Lucent reported better-than-expected fourth-quarter profits and a 16 percent rise in revenues, driven by strong growth in sales of communications equipment for phone companies and large businesses. Gross profit margins also improved to 47.1 percent from 44.1 percent in the year-ago quarter, reflecting a more favorable mix of products and services as well as improved management of costs, the company said. Peterson said he expects Lucent's future margins to be above the historic target of 43 percent, but he could not say whether margins would be as high as the levels seen during the fourth quarter. "I think you'll see margins higher than our long-term target (of 43 percent) for a while, but this is a market in which you have to be very cautious in price, so I'm not ready yet to say these (fourth quarter) margins are what we should get used to," he said. Lucent's strong quarterly results and marketshare gains countered the recent earnings warnings from competitors such as Canada's Northern Telecom <NTL.TO >, France's Alcatel <ALA.N > and CIENA Corp. <CIEN.O >. Lucent expects to grow as the overall communications equipment market grows and as it grabs marketshare from rivals. "We look to be taking share in all of the markets we address," including the United States, Europe, Asia and Latin America, Peterson said. "International marketplace has historically been a very loyal marketplace. We've been making gains slowly...and once we get in, I think we will be able to retain those relationships and expand on them in the future," he said. Lucent sees its future sales coming from both traditional phone companies, as well as new upstarts such as competitive local exchange carriers. "The big dollars will predictably come from the larger network operators. But all (market segments) going to be very, very important," Peterson said. Lucent Thursday landed a $2 billion contract to build a network for WinStar Communications Inc.'s wireless communications network, one of Lucent's largest contracts with a CLEC. Lucent has made several, small acquisitions over the past year, and it expects to make additional purchases in the future. The company would be open to deals in a variety of sizes and market segments, Peterson said. "Each of our business units has an option to bring forward acquisition components to their overall business strategy so I suspect we will be making accusations in a wide set of business spaces," he said. Lucent, recently free from a two-year restriction against certain merger accounting techniques, is seen making a multibillion dollar acquisition to bolster its presence in the data networking market, analysts said. But Peterson said the new accounting flexibility is just one factor in consider a deal. "How we account for something would not take a bad deal and make it a good deal. But it could make a good deal a little sweeter," he said. REUTERS