The modem industry shake-up that accompanied the establishment of the Open 56K Forum, continued apace as Hayes Microcomputers acquired fellow modem maker Cardinal Technologies.
Vulcan Ventures, the venture capital arm owned by Paul Allen, co-founder of Microsoft, owns 75 per cent of Cardinal, and is now planning a separate programme of investment in Hayes. Cardinal is a proponent of X2 technology standards, the 56Kbps technology proposed by US Robotics in opposition to the 56K Forum, and Hayes says it plans to sell its acquisition's X2 modems in the immediate future, despite its own support for the rival 56K specification. It will sell the Cardinal devices at least until Christmas, when it anticipates K56Flex - the Forum's updated specification - becoming the de facto standard.
Currently, Cardinal claims around 10 per cent of the retail modem marketplace, and Hayes has 11 per cent. Chairman Dennis Hayes commented: ?The acquisition provides us with strength, breadth and economies of scale".
By pushing the X2 modems, Cardinal is encroaching into the backyard of USR, 3Com?s recent acquisition. (3Com, of course, is a 56K standard advocate, while USR backs X2). Hayes? marketing director, said: ?I don?t imagine they?re tickled about it but we (via Cardinal) have purchase orders that must be honoured.?
Hayes continues to support the K56 standard proposed by Lucent Technologies and Rockwell Semiconductor, and its motive for marketing X2 modems looks like an attempt to maximise a short window of opportunity, making off with as much market share as possible, particularly in the retail, small office and home office arenas.
Kerry Dimke reiterated: ?Hayes is endorsing K56 technology and we expect X2 will remain a proprietary technology.?
The acquisition of Cardinal opens up new channels for Hayes, but plant closures, possibly even redundancies, look likely. Hayes says some workers will be offered relocation to its Norcross, Virginia plant when Cardinal?s Lancaster plant closes.
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