Broadcom Develops Third-Generation Bluetooth Chip; REDSonic Teams With MIPS
If you invested in Broadcom Corp. and Conexant Systems Inc. over the last 12 months, you know the term “telecom slowdown.” But you may begin to hear the term “telecom boom” next year.
That’s how it seems after Sanford Bernstein analyst Paul Sagawa, a longtime telecom bear, issued a research note suggesting that we could see a rebound in telecom carriers’ spending on new equipment,which is made with chips and gear from many of our local companies,by the end of next year.
Even though Sagawa says that telecom carriers will tighten their purse strings by 16% through 2001 and by a further 21% in 2002, he says their spending will actually grow in the fourth quarter next year over this year’s numbers.
Of course, saying that next year’s fourth quarter will be better than the current one is like saying Pete Sampras could beat me in a tennis match,it would be an easy match-up. But the degree to which the telcos have slashed their spending is unusual and there’s going to come a point where they’re going to have to invest for the future, Sagawa says.
“The kind of bloodletting that we’ve seen is more than sufficient to get the carriers back on track in terms of their cash flow,” Sagawa said in his report. And Sagawa is joined by other analysts who have pinched their criticism of telecom industry companies. In July, well-known Lucent bear Steve Levy of Lehman Brothers issued a buy rating, reversing his long-held position on the stock.
If local OC demand is a microcosm of the entire industry, demand for network space could jump in the coming year, forcing telecom companies to invest in their networks. For instance, Pacific Bell, a subsidiary of SBC Communications Inc., is increasing its capacity for more subscribers to its high speed DSL service and its competitors, such as Verizon Communications, are following suit.
Any spending by the telcos will show up early in the results of companies like Broadcom and Conexant, which make the chips that sit inside the gear that goes into the phone networks. With both companies slated to report earnings next month, it’s time to hide and watch.
Broadcom Unveils Bluetooth Chip
Until then, Broadcom is making more inroads into Bluetooth, the erstwhile wireless standard. The company just unveiled a new Bluetooth-enabled chip for third-generation cellular phones,the latest phones expected to come out in a year.
Bluetooth is a feature added to wireless communication devices that allows them to “talk” to personal area networks without having to plug them in. For instance, a Bluetooth-enabled handheld computer could update information when brought into an area, such as an office, that had a Bluetooth-enabled personal network.
Broadcom’s new chip is the latest member of the chipmaker’s Bluetooth products and one of the first that will work in phones that feature both 3G and CDMA,the current,frequencies. “This Bluetooth radio demonstrates Broadcom’s continuing ability to deliver high-performance data communications products to our OEM customers,” said Scott Bibaud, director of marketing for Broadcom’s Bluetooth products.
REDSonic Goes With MIPS
Upstart software maker REDSonic Inc., a maker of software based on the free operating systems Linux, recently joined a program that will allow users of an MIPS Technology Inc. branded circuit board to develop programs using REDSonic’s tools. The program will allow programmers to develop programs for the MIPS board more rapidly and give REDSonic an outlet for its products.
“REDSonic’s support for MIPS based processors in our tool offering satiates an important segment of our customer base,” said Kevin Tobin, REDSonic’s director of sales. “The future for product development demands accelerated time-to market solutions with reduced development and run-time costs.”
REDSonic’s participation in the new program is the most recent move by the young software company, which is looking to land another $10 million in funding.
The company’s $4 million first round was completed last year, and investors included venture capital firms and technology companies in Taiwan and Singapore, but none from the U.S. The company hopes to change that in the next round, saying it is actively courting U.S. corporate and private investors to fund its expansion to markets in Asia. The company’s decision to join the MIPS program could help solidify attention from potential investors.
Asita Joins Consortium
Virtual private networks,a group of computers that pass secure information back and forth over the Internet via public lines,have never been that secure. One OC company aims to change that.
Irvine’s Asita Technologies, a maker of gear the keeps those networks safe, has joined an industry group called Virtual Private Network Consortium (VPNC) to throw its two cents into a battle that will determine the standard VPN language. The group counts industry giants 3Com Corp., Microsoft Inc., Nokia Corp. and Cisco Systems Inc.
“Asita is committed to the VPNC’s mission of increasing interoperability among VPN products and promoting a better understanding of VPN technologies,” said Bob Bova, executive vice president of Asita Technologies. “We look forward to working with other VPNC members to enhance VPN interoperability for the benefit of our customers and to accelerate the global adoption of VPNs.”
