Wrapping up our reports from last week’s Hambrecht & Quist LLC Technology Conference in San Francisco…
Netscape claims over 90% of Fortune 1000 firms use navigator
Netscape Communications Corp, basking in Dataquest Inc figures suggesting that it has 84% of the Internet browser market against just 7% for Microsoft Corp, told the conference that an even higher proportion, 92%, of Fortune 1000 companies use Navigator. Michael Homer, senior vice president of marketing, also said the Navigator 3.0 release set for June was likely to be followed by the release of a fourth version by the end of the year.
S3 to continue R&D spending
Multimedia chip developer S3 Inc expects only flat sequential revenues this quarter and is tightly controlling inventory of its older products. Chief executive Terry Holdt said the company would continue to spend on research and development to protect and move forward on its leadership position.
Cirrus chief financial officer looks for a return to growth
Cirrus Logic Inc’s new chief financial officer, Thomas Kelly, told reporters, We’re positioned as well as we can be going into 1997. We believe this action that we’ve taken in the fourth quarter is going to position us better for returning to the kinds of growth and operations the company has been used to in the past. He said new products such as its 64bit graphics accelerator chip, audio chip and a new 28.8Mbps baud modem should help it resume earnings growth. He said he expects the company’s graphics business to be sequentially up in the coming quarters, even though industry forecasts call for flat growth. He added that the graphics business makes up about a third of the company’s sales. He also said the company in the long term, will transition from being personal computercentric to making its products available for the consumer electronics industry too.
3Com claims its adapter business is growing faster than the market
Trying to allay fears that its largest product segment, local network adapters, could be experiencing slower growth because of the slowdown in personal computer sales, 3Com Corp’s executive vice president Bob Finocchio told the conference that the 3Com adapter business was growing at an annual rate of 35%, which is faster than the market is growing. Several factors are driving growth in adapters, including corporations moving to upgrade their networks to Fast Ethernet. Other factors are the increasing use of mobile desktops that need to be connected to networks, the emergence of network-ready personal computers, a growing retail business to connect home computers to networks, and the increasing volume of multimedia data that is traveling through networks these days.
Bay Networks expects rise in operating margins with new switch launch
Bay Networks Inc chief financial officer William Ruehle expects Bay operating margins to rise in coming quarters as the company rolls out new network switches and changes to a higher margin product mix. We will be able to get solidly in our 20% operating margin over the course of the next couple of quarters, Ruehle told the assembly. He told Reuters the company does not expect to see that 20% figure in its current fiscal fourth quarter. Last quarter, its operating margin slipped to 17.3% from the 20% target. Bay expects to unveil new switching devices next week, but its executives declined to talk about them.
AirTouch plans L.A. digital cellular service
Gloria Everett, vice president of wireless engineering and operations at AirTouch Communications Inc said that the company plans to begin operating its digital cellular telecommunications services in Los Angeles this month. She told the conference that AirTouch chose Code Division Multiple Access as a transmission standard for the Los Angeles service for about a dozen strategic reasons it delivers clearer voice and data transmissions, enables handsets to have longer battery life and requires AirTouch to build fewer cell sites,
which can reduce its capital costs. AirTouch retrofitted its Los Angeles system to digital from analog. PairGain Technologies Inc, which builds high bitrate data subscriber loop systems that speed transmission over existing telephone lines, plans to take the technology to the home market to generate a new revenue base for the company. Up to now, PairGain has primarily sold the products to telephone companies, but it is now testing repackaged products for home users, president Howard Flagg told the conference, adding that it is targeting telecommuters that connect home computers to the office, and is going after the growing number of users seeking highspeed Internet connections. The Internet clearly demands higher bandwidth, Flagg said. He told Reuter he is already testing home products with US West Inc and two other Bells..
Alliance warns of fall in gross margins
Alliance Semiconductor Corp warned the assembly that it expects gross margins to fall to the low- to mid- 30s in the near term, before recovering to 40% in the long term. Gross margin at the San Jose chipmaker was 51% in the year to March..
Geoworks says NEC alliance will allow realization of business plan
Geoworks Inc chief executive Gordon Mayer told the conference that the company’s alliance with NEC Corp and business from Pacific Telesis Group Inc, both announced last week, should enable Geoworks finally to realize its business model of deriving revenues from unit royalties and aftermarket upgrades. NEC is licensing Geos as the operating system for smart phones it expects to start selling in 1997. Geoworks licensees manufacturing handsets or smart phones using Geos include Nokia Oy, Toshiba Corp, HewlettPackard Co, Brother International Corp, Canon Business Machines and L M Ericsson Telefon AB.
