Conexant Systems to Unveil First Programmable Cable Modem Chip

Broadcom, meet the competition.

Today, Conexant Systems Inc. of Newport Beach will unveil the industry’s first programmable cable modem chip, which manufacturers say will cut the cost of building modems by 25% and give them an easier way to upgrade their devices.

Conexant’s chips let modem makers use software to add new features to the modem without forcing customers to swap out the old chip or buy a new modem.

The two-way chip set can be upgraded with software, but these programs will be determined by individual modem manufacturers. By using the Conexant chip, analysts say, cable operators would be able to offer customers the chance to try out new features--such as telephone service over the Internet--and not force the public to go out and buy a new modem or new chips.

“This is a leapfrog product,” said Dwight Decker, chief executive of Conexant.

It also is the same type of upgrading solution that Conexant, when it was still owned by Rockwell International Corp., used for its line of speedy 56K telephone modems.

Though analysts praise Conexant for its chip design, they warn that the company could face trouble because technical standards for some cable modem functions still have not been established.

“Any time there are questions about standards, you’re going to see some uncertainty” among consumers, said Will Strauss, an industry analyst with the high-tech research group Forward Concepts in Tempe, Ariz.

“No one will deny that Conexant’s new chip is very advanced. But the cable modem industry is showing some of the early earmarks of the battle over 56K modems.”

The battle between Rockwell and U.S. Robotics Corp. over conflicting 56K modem chips ended up hurting both companies, as consumers opted to wait instead of buying into either technology. The result was a nearly crippling price war that failed to boost sluggish sales.

Until recently, the cable modem market was a small but promising sector. Last year, manufacturers shipped 500,000 in the United States. In 1999, analysts predict, that number will grow to 800,000.

To date, Broadcom Corp. has dominated this market because it was the first out of the gate with a full chip set for modems and set-top boxes. That edge helped the Irvine-based firm seal a strong deal to supply chips to a slew of manufacturers including giant General Instrument Corp.

“Our stuff is out there, certified and working. [Conexant’s] isn’t,” said Henry T. Nicholas III, president and chief executive of Broadcom.

Referring to Conexant’s past reliance on software upgrades--and the trouble it caused--in its modem chips, Nicholas added: “I really do admire their marketing department, which is taking their biggest technological flaw and turning it into a feature.”

Yet analysts say Broadcom’s dominance will be tested by today’s announcement, as well as similar moves anticipated from rivals Analog Devices Inc. and Intel Corp.

Broadcom insists its chip technology is superior.

“We already have built-in programmability [in our chip sets],” Nicholas said. “We understand the features you’d want to upgrade to.”

P.J. Huffstutter covers high technology for The Times. She can be reached at (714) 966-7830 and at p.j.huffstutter@latimes.com.