E-Mailbag Monday: inSilicon, Netpliance, Bluetooth

What looks hot for the IPO market this week?

Reply: One that looks strong is inSilicon. The chip market has been
tough in the past few years, but this has changed recently. In fact, the
outlook for the chip market looks very bright. This, of course, means that
there will be rising demand for support services for chip makers. One
company that fits the bill is inSilicon.

The supergrowth of the Net means that digital devices need to be connected,
which means demand for communications standards. inSilicon develops modules
that allow for the quick implementation of communications technologies on
chips. In all, the company has about 400 customers.

inSilicon’s technology allows chip makers to develop their products faster
and at lower costs. What’s more, the chip makers can focus on their core
competencies.

The lead underwriter is Robertson Stephens and the proposed ticker symbol
is INSN.

Netpliance: Internet Lite

What’s your take on Netpliance?

Reply: The company had its IPO last week, raising about $144
million. As the name implies,
Netpliance (NPLI)
focuses on the Net appliance market. That is, Netpliance has a product
for consumers that makes it easy to access the Net and e-mail (the product
is called i-opener). i-opener costs $99 and the monthly service fee is $21.
In fact, the market for Net devices is expected to soar, going from $2.4
billion in 1999 to $17.8 billion in 2004.

Unfortunately, the Netpliance IPO was lackluster. The offering price was
$18 and the stock closed at $22-1/16 on its first day of trading. Actually,
I think Netpliance’s stock will continue to have difficulties. First of
all, investors are lukewarm with Internet consumer plays. It is far from
clear that the Netpliance device will become widely adopted. What’s more,
the marketing costs for consumer devices is extremely high. Also, the
competition will be intense. The big boys like Intel, Microsoft, Gateway,
AOL and many others want to dominate this market.

Getting Your Teeth into Bluetooth

What is Bluetooth all about?

Reply: Bluetooth is a new standard for wireless devices that allow
for short range radio links between mobile phones, mobile PCs and other
mobile devices. A consortium of companies developed it (like IBM, Toshiba,
Erriccson and Nokia). The idea behind Bluetooth is to make it much easier
to connect devices, which is no easy feat. Bluetooth technology is placed
on ultra sophisticated computer chips.

We will see some Bluetooth devices released this year. However, they will
not be ready for prime time. It will likely take several years for the
devices to become affordable.

Does the Netpliance lackluster IPO represent a buying opportunity? Discuss it here

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