Convergence Not the Way to Go: Xircom

SINGAPORE (05/10/2000) - While other players in the industry express the need for devices to converge, touting the marriages of devices such as that of mobile phones and the Internet, and PCs and mobile phones, at least one company firmly believes that not all devices should be integrated.

Dirk Gates, chairman, president and chief executive officer (CEO), Xircom Inc., argues that amalgamating devices into a single product will see the industry being dragged backwards rather than forward.

"We are not a believer of convergence," said Gates. "We don't buy it."

"Especially with Bluetooth, why do I need (to build) everything in one single device? Bluetooth can help achieve interoperability between devices," he said.

He noted that when companies start building devices such as smart mobile phones with bigger screen panels to make Web browsing more user-friendly, "you start to grow the phone in the wrong direction", where the initial intention was to make handphones small and mobile.

Xircom is placing its bets on "unconscious carry" devices such as Rex, where they are so portable that users do not have to stop to think if they should put them in their pockets for the day, Gates explained. Research firm International Data Corp. (IDC), predicts that the pocket information companion market will enjoy a more than 75 percent compound annual growth rate from 1998 to 2002.

Rex slips into a Type II PC Card slot on any notebook, from which users can download and synchronize PC organizer data. Rex currently has an installed based of more than 250,000 units worldwide, drawing in US$16 million in revenue last fiscal year (ended March 1999), Gates said, adding that Xircom is confident that the emergence of new wireless technology such as Bluetooth will see the revival of Rex.

Xircom has plans to pump up Rex with a range of new capabilities, such as adding Web functionality where users can download content from the Internet, he said. Rex will also have Bluetooth capabilities so users can synchronize their data via mobile phones, eliminating the need for cumbersome cables, he added.

Gates noted that technology options are increasing, where new features are expanding customization capabilities. He noted that there is also a growth in "specialized devices" such as Internet appliances, MP3 players, and personal TV servers.

As users gain more mobility with the strong emergence of handheld devices and handphones, the need to provide personalized devices is heightened, he noted.

"Technology that don't allow (for personalization) will fade because the trend now is to offer build-to-order, personalized products," he said.

And it is in keeping with this that Xircom will continue to beef up its number of technology options, Gates said, noting that the idea behind its RealPort2 series, for example, was to provide users with a wider choice. Xircom's RealPort2 PC cards allow notebook users to mix-and-match from a range of access technologies such as 56K bit-per-second modem, GSM (global system for mobile communications), and DSL (digital subscriber line), and combine the cards together for a customized solution.

The company plans to further extend its RealPort2 product offerings this year, and will add technologies such as 802.11 and Bluetooth, Gates said.

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