WIRELESS, SECURITY OPPORTUNITIES STAND OUT AGAINST BLEAK TECH LANDSCAPE
SAN JOSE -- Network security and management, wireless data and voice-over-IP were highlighted Fri. by Packet Design CEO Judy Estrin as bright spots in what panel of Silicon Valley executives agreed probably would be another rough year for communications technology. Participants differed over how long doldrums would last, with Estrin contending companies needed to adjust to more years of tough times, while Mayfield venture capitalist Yogen Dalal, and especially Semiconductor Industry Assn. Pres. George Scalise, sounded more upbeat notes. They spoke at outlook conference of Bay Area Council, business policy organization.
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Too much emphasis has been laid on one-time shocks with sharp but hopefully short-term effects, Estrin said, listing Internet bubble burst, 9/11 and corporate scandals. But other trends will depress tech activity longer term, she said. Telecom bust and scandals produced consolidation, which meant decreased competition and in turn less innovation, she said. Estrin said 9/11 and scandals had combined to traumatize everyone into severe risk aversion. And network and telecom equipment and many software applications in tandem had hit points in their product cycles where few companies felt compelled to do significant spending on upgrades, she said. She said that meant 2-3 tough years.
Besides growth technologies she highlighted, Estrin said, govt. and Asian markets present short-term opportunities as they catch up with more advanced technology customers. Further out, though, Internet’s next phase will fuel a new boom, she said. That would be based on embedded computing and transition from 1990s machine-to-machine connectivity to interpersonal connections via broadband and mobile services. But consumer side requires intellectual- property law reform because “entertainment to the home will really drive that curve” and content must become more readily available, Estrin said.
Scalise said semiconductor industry bottomed out last year and had started recovering. Second half saw year-over- year growth, rising to 20% in 4th quarter. Overall 2002 growth came in about 1.8%, he said, and over longer haul compound annual revenue growth next few years would be 8-10% vs. pre-2001 rates of 16%. Revenue growth will be 10-12% annually in PC industry, just under 10% in cellular telephony and much higher in wireless LANs, he said. Estrin challenged Scalise’s expectation of short-term PC growth.