Dial-up denizens discover cable

The cable modem industry took another step into the mainstream last week.

Fast on the heels of U.S. Robotics, Hayes Microcomputer Products announced it is shipping its Hayes Ultra cable system, including an encoder and software controller at the headend, and telco-return modems priced at $179 each in bulk quantities.

"We believe that the immediate market is for one-way access because two-way is proving to be too expensive," said Sebastian Pereira, cable modem product group manager. "The concept of two-way cable modems is great, but the architecture and applications are still a ways away.

Hayes sees the cable modem market as an extension of its existing modem technology.

"That's the rationale behind our going into the cable modem business," Pereira said. "We've taken on the philosophy that whatever the access technology, whether it's dial-up or [digital subscriber line] or cable modems, we will be there.

The cable industry's insistence on the two-way model discouraged Hayes from coming out with a product until now, he said.

One analyst believes the newcomers' presence bodes well for the cable modem.

"This clearly suggests that people think the cable modem market is a lot bigger than some had forecast," said Gary Kim, principal at Itibiti Ventures, Littleton, Colo. Hayes and U.S. Robotics would have stayed away from the market if they were not convinced that cable modems are a big item because both companies manufacture in large volumes, he said.

A recently developed cable modem standard ensures that large vendors can safely begin producing in those volumes, Kim said.