Virata's new chip offers DSL or 56-kbps modem functionality combined with networking capabilities.
Virata's new "Beryllium" digital subscriber line (DSL) chip could provide a low-cost means for PC vendors to offer systems that hook up to an increasing array of multimegabit networking and Internet services such as DSL technologies, which are being made available to businesses and consumers.
The Virata chip combines three features: a high-speed DSL connection, a standard 56-kpbs dial-up modem, and Ethernet networking. In most cases these features are offered separately.
"You are going to see more solutions along this vein where you have dial-up and DSL modems on the same [add-in] card," noted Beth Gage, director at telecom research firm TeleChoice.
Such chipsets help service providers offer dial-up service in case of DSL service outage, and laptops could use DSL or Ethernet connections at the main office, then use the dial-up modem when workers are on road, she said.
Virata's new chip should prove to be popular with vendors because they could use one inexpensive chip in systems destined for many different geographies and uses.
Vendors already are planning on offering DSL modems in some models this year. But for now, the availability of high speed DSL cable or even 56-kbps network access hinges on a user's location.
A PC vendor's customers, even sometimes those residing in the same city, may not all have access to DSL service, for instance. Instead of having to hold two different systems in inventory for customers, vendors could use Virata's chip in all of their systems, providing greater economies of scale for DSL users. The ability to include DSL capabilities in more PCs will be one factor that helps spark demand for service.
Another factor that will spark demand--consumer friendly DSL "Lite" modems, which are expected to hit the markets in 1999. The industry is working on a standard for so-called G.lite modems that would ensure all modems can speak with each other.
These modems would offer download speeds of up to 1.5 Mbps (many times faster than standard dial-up modems), in addition to reducing the cost and hassle of DSL service by eliminating the need for a telephone company to install a piece of equipment called the "splitter." Virata said its Beryllium chip will incorporate the G.lite technology.
Ken Krechmer, editor of Communications Standards Review, said the standard is likely to be adopted by October. Modem standards will help propel adoption of DSL modems in the U.S. market to around 1 million subscribers by the year 2000, according to estimates from TeleChoice.
With increased demand on the horizon, Virata won't be alone in the market for combination DSL/dial-up modem chipsets, although it is the first company to say it will offer Ethernet networking in addition to modem functions.
Texas Instruments, Rockwell, Lucent, Broadcom and others are expected to offer similar chips as the market for DSL modems grows.
"There won't be one single clear winner [in the DSL chipset market] for at least for the next couple of years," said Gage.
Virata said it expects to ship the sample versions of the chips in the summer of 1999, which is when analysts expect demand for G.lite modems to ramp up. Virata expects to price the chip at under $35 each in large quantities.