Intel to offer DSL modems, makes pact with Cisco

Intel said yesterday it plans to start selling DSL (digital subscriber line) modems later this year. The move is part of an effort to increase the bandwidth available to homes and small businesses, which in turn should drive demand for Intel's higher performance processors, one analyst said.

Intel also announced a technology licensing agreement with Cisco Systems which will allow the chip maker to develop and market a line of ADSL (Asymmetrical Digital Subscriber Line) modems compatible with Cisco's central office DSL equipment.

DSL is a networking technology that allows for faster connection speeds over standard telephone lines than the analog modems used by most homes and small businesses -- as much as 25 times faster in some cases, according to Intel. Agreement among industry players on standards for DSL is expected to make the technology increasingly popular in the next few years.

Intel is already involved in a number of initiatives aimed at increasing Internet bandwidth, including work in various standards bodies and investments in broadband firms and technologies. Moving into the high-speed modem business is one more way for the company to drive demand for its faster processors, one analyst said.

"Anything that increases the need for faster processors and faster modems and forces you to get rid of your old PC is good for Intel and good for the industry as a whole," said Brad Baldwin, director of the remote access group with IDC.

Just last month the International Telecommunications Union formally approved a standard for DSL called G.Lite, which is supposed to make it easier and more affordable for end users to install DSL on their PCs.

However, IDC remains conservative about its predictions for DSL growth, in part because of lingering issues regarding technology standards and regulations, Baldwin said. IDC predicts that about 15 million analog modems will ship in 1999, compared to fewer than 700,000 DSL modems. DSL shipments will likely increase by 150 per cent in 2000, but will still lag analog sales in 2003, Baldwin said.

The first Intel ADSL broadband products are expected to start shipping later this year, and will be available through local telecommunications providers, Intel said. No pricing information was given.

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