Nortel has spun off its Netgear home and small office networking subsidiary to help it attract more outside investment.
The firm has already received a $15m injection of capital from financing firm, Pequot Capital Management, which it will use to bolster its research and development work and invest in startups developing hardware devices such as web radio appliances.
It plans to use the money to develop products that boost the speed of internal and external connections around the home from 10Mbps to 100Mbps.
Patrick Lo, Netgear's chief executive, said the company's independent status will enable it to attract more funding than if it remained a Nortel subsidiary. One if its prime competitors is 3Com's home networking division.
"It is easier to obtain capital if you're independent," he claimed, adding that the organisation's new status would enable it to better leapfrog 3Com in market share.
Netgear was originally set up four years ago by Bay Networks, which Nortel acquired about 18 months ago. It develops a range of home networking products, including adapter cards, modems, routers and switches.
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