Next week thousands of communications technology fans will descend upon
Atlanta for the annual SuperComm conference (June 4-7) — an event whose
past is rich with new product announcements from the companies who develop
infrastructure for the complete range of service providers in the New
Economy.
In previewing the event, some analysts from Goldman Sachs (GS) said the
amount of new products will not be the event’s key because of the slowdown
in demand across the high-tech industry. Instead, what some people will be
looking for are specific innovations in hot-button issues such as optical
switching. Never mind the fact that carrier spending is down and that those
with legacy equipment may be left holding out their infrastructure-filled
hands to Qwest, Verizon, and other service providers who want the latest
equipment that companies like Ciena have to offer. Interest in optical
switching is at an all-time high, GS said.
Specifically, Goldman Sachs said interest remains great in the
optical-electrical-optical (OEO) layer, which allows for increased
functionality at the important electrical layer. GS said Ciena is the
runaway leader with 15 customers and myriad shipments. Analysts for the
research firm said they will be watching Sycamore’s movement in this stark
terrain as the company is tweaking its key ASIC for the switching fabric,
which would make the company only the second outfit to serve STS-1, or 51.8
megabytes-per-second (Mbps).
In the background for all of this are the larger, more perennial firms, such
as France’s Alcatel and Canada’s Nortel, neither of which can yet compete
with Ciena, Sycamore, or even Tellium, but who are clearly interested in
making waves in optical switching. GS said it expects Alcatel and Nortel to
showcase new products at SuperComm 2001. Still, there are no guarantees that
the optical sector will heat up soon — possibly not until some time in
2002, according to a recent report released by Morgan Stanley Wednesday.
Analyst Alkesh Shah dropped JDS Uniphase, Nortel Networks and Sycamore
Networks to “neutral” from “outperform.” Interestingly, all of those stocks
were off Wednesday.
While these larger companies may show off product developments or unveil
freshly-inked contracts, there may be other interesting happenings on the
periphery of the event. For one, Federal Communications Commission Chairman
Michael Powell, recently in the limelight for his comments on antitrust
matters among phone carriers, will engage the crowd at 9 a.m. June 5 with an
address on communications regulation moving forward — a grossly important
issue what with the status of 2.5G, 3G and other wireless networking
standards still up in the air.
A law school graduate, Powell presided as the chief of staff for the
antitrust division in the U.S. Department of Justice before joining the FCC.
He last made waves May 7 when he vowed to punish potential violators of fair
competition laws by inflating fines from $1.2 million to $10 million in
situations where phone carriers treat rivals unfairly.
On the technological standard side, the HomeRF Working Group will
demonstrate its revamped HomeRF 2.0 wireless standard at SuperComm 2001 on
the heels of successful presentations at the Connections 2001 show in
Seattle and Networld+Interop in Las Vegas. HomeRF 2.0 runs at 10 mbps.
While Proxim and a few other firms (Compaq Computer, Motorola, Siemens) tout
HomeRF, others are not so excited about the wireless standard and opt for a
rival protocol known as Wi-Fi, or 802.11b, which runs at 11 mbps. Intel
Corp. abandoned HomeRF in March for 802.11b much to the disappointment of HomeRF
supporters.
A recent Merrill Lynch study noted that Toshiba, Dell, IBM and Compaq are
promoting 802.11b-enabled laptops while Handspring has been talking about
including 802.11b wireless capability into its personal digital assistants
(PDAs).
What are some of the reasons Merrill Lynch believes Wi-Fi will prevail over HomeRF
and Bluetooth? Wi-Fi is currently interoperable, it is already
cost-effective and becoming more so, and it is as fast as the majority of
desktop connections.
Ultimately, GS said it was unsure of how SuperComm will be received.
“Attendance at SuperComm could be down this year from the overheated peak
experienced in 2000, and certainly the tone of most carriers and equipment
vendors will be muted versus last year,” GS concluded. What the event will
do is spell out the challenges that lie ahead for this sector.
