Rival Wants to Chip Into Rockwell Lead in the Modem Race
Like almost everyone else returning from the Comdex computer trade show last week, a small group of Rockwell employees boarding an Orange County-bound jet were carrying T-shirts and other trinkets they picked up at the show.
But the Rockwell group took particular delight in displaying T-shirts they had snatched from the U.S. Robotics booth. It was as if the Rockwell employees had captured an enemy’s flag, and in some ways, they had.
In the market for chips that power computer modems, Newport Beach-based Rockwell Semiconductor Systems is No. 1, and Skokie, Ill.-based U.S. Robotics is No. 2. The two companies are currently engaged in an intensifying battle for control of a new generation of modems that will enable computer users to download data and surf the Internet at 56 kilobits per second, twice the speed of today’s modems.
The stakes are high.
“We see 56-Kbps modems replacing the 100 million [slower] modems we have in the world within a decade, and most likely within five years,” said Richard Doherty, an analyst with The Envisioneering Group in Seaford, N.Y.
Rockwell has an advantage because of its 70% market share among Internet service providers, companies such as Earthlink, AT&T; or Irvine-based Network Intensive, that connect computer users to the Internet. U.S. Robotics has much of the remaining 30%.
But U.S. Robotics is hoping to capture new territory by being first to bring 56 Kbps to market. Rockwell won’t make its 56-Kbps chips available until early next year, but U.S. Robotics is already offering early versions of its new modems to Internet service providers, although consumers can’t get them yet.
There are limitations to the new technology. Consumers will only be able to receive data, not send it, at the higher speeds. And consumers also need to make sure their Internet Service Providers are using the new modems, otherwise they’ll be driving Ferraris in 28.8 mph traffic.
There is one other problem: Rockwell, U.S. Robotics and the handful of other modem companies have yet to agree on the protocols, signal levels and other specifications that will enable one brand of 56-Kbps modem to communicate with another. Michael Ziehl, a product manager at Rockwell, said it could be a year or more before a 56-Kbps modem standard is set. But neither Rockwell nor U.S. Robotics will wait for that to happen.
After all, the modem industry is expanding almost as rapidly as the Internet itself. And in the battle for 56-Kbps dominance, Rockwell and U.S. Robotics both hope to be holding a lot more than enemy T-shirts.
