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Another $100 56-kbps modem here

Diamond Multimedia joins the act as vendors continue to price products aggressively to gain share in the cutthroat modem market.

Diamond Multimedia (DIMD) has begun shipping a standards-compliant 56-kbps modem for $99.95, as vendors continue to price products aggressively to gain share in the cutthroat modem market.

Diamond will be one of the first K56flex-based modem vendors to release a v.90 modem. 3Com announced last month that it will introduce a 56-kbps modem that is backwards-compliant with its x2 technology.

The new "v.90" standard was agreed upon by the International Telecommunications Union last month. The long-awaited industry consensus is expected to help spur sales of 56-kbps modems.

Previously, consumers and Internet Service Providers (ISPs) had to choose between modems supporting 3Com's x2 technology or K56flex modems supported by Lucent and Rockwell. The new v.90 standard eliminates this problem.

Diamond says it will offer standards-based 56-kbps modems with a $100 price point throughout 1998.

"We generally choose to go [aggressively] on product prices as we turn new technology onto shelves," says Mike Reed, director of product marketing for Diamond. "We've grown in market share to 10 percent in packaged modems [through the first quarter of 1998], and this will accelerate our presence," he claims.

Analysts say that is the correct strategy if Diamond is to be a competitive force in the 56-kbps modem market.

"Diamond is not the premier modem vendor, and as a result of that they have to have a lower cost strategy," said Forrester Research analyst Maribel Lopez. "They don't really have a choice. They can't be a price leader, but they could be a price follower."

The Diamond SupraExpress 56I internal modem for PCs is shipping now for $99.95. The SupraExpress 56I Sp and 56e external modems for PCs will begin shipping later this month for $119.95 and $129.95, respectively. For Macs, Diamond will offer the Supra Express 56e for $129.95 later this month, and the SupraExpress 56e for $149.95 in April.

Diamond said that the new SupraExpress modems will connect at speeds above 50 kbps with ISPs using equipment made by Ascend, which has historically supported the K56flex technology, and 3Com.

Free downloads of v.90 code will be available by the end of March on Diamond's Web site for current owners of Diamond SupraExpress 56 modems.

In related news, 3Com says it is making software upgrades to the new v.90 standard available for older 33.6-kbps and x2 modems available on its Web site today.