Rockwell to Offer Chips for Digital Cell Phones

COSTA MESA —  Rockwell International Corp., a major provider of computer modem chips, said Monday that it will enter the market for digital cellular telephone chip sets, a step that could increase competition and force down prices in the fast-growing digital cellular arena.

Digital cellular phones were slow to take root in North America but are expected to spread swiftly, replacing the analog cellular phones now used more frequently.

Rockwell is offering a highly adaptable kit for digital phone makers that will cut engineering costs and reduce the time it takes to bring a product to market, said Richard Doherty, director of research at the Envisioneering Group, a market research firm in Seaford, N.Y.

He said his company expects competition by Rockwell and other chip-set makers to cut the cost of digital phones in half in the next year or so. Rockwell, he said, could “go from being invisible in this market to accounting for 20% to 30% of the worldwide chips within 18 months.”

Separately, Rockwell’s semiconductor systems unit said it has sealed an exclusive licensing deal with PairGain Technologies Inc. in an effort to bolster its position in the high-speed modem market.

Under the two-year agreement, Rockwell’s Newport Beach semiconductor unit will use PairGain’s Falcon chip for digital subscriber line products, predominately modems that use standard phone lines to deliver high-speed data communications.

The chip is able to send and receive data and video across a copper telephone line at substantially faster rates than traditional phone modems. The quicker transmission levels will help improve consumers’ access to data-heavy Internet applications, such as video-conferencing, officials said.

Rockwell staff said they will pay licensing and royalty fees to Tustin-based PairGain. Both companies declined to discuss financial details of the deal.