Extending its reach further beyond the telecommunications equipment industry, Lucent Technologies Inc. announced a new set of products yesterday that transmit digital information using Internet technology rather than older network systems.
The announcement pushed Lucent's share price up $2.125 to $71.875 on the New York Stock Exchange.
One of the main trends in the high-technology industry is the convergence of voice and data networks. Companies, including Lucent and Northern Telecom of Canada which have thrived as builders of traditional telephone systems, are expanding into the torrid business of data networking. Conversely, data networking giants including Cisco Systems Inc. are developing technologies to transmit voice conversations over advanced data networks.
Many analysts and industry executives believe that networks built around Internet technology can be more efficient than older networks, for both voice and data traffic. While traditional networks in essence force different streams of information to stay within their own digital lanes, networks based on Internet technology allow packets of information to switch lanes in search of faster paths to their destinations.
"If there has been a question mark raised in people's minds over the past several years, it's been, 'Can Lucent get with the new program, get with the set of revolutionary changes that are happening in the industry?' " said Carleton Fiorina, president of the Lucent unit that sells products to big communications carriers. "What this announcement says is, 'Yes, we get it.' "
Lucent announced two sets of products yesterday. One uses Internet technology to essentially replicate an advanced local telephone switch, allowing carriers to combine data and voice traffic. Northern Telecom, Lucent's main rival, announced a similar product last week.
"Lucent probably has a broader product line with this announcement and Nortel are really the only people who are close," said Michael Arellano, an analyst with Degas Communications Group, a high-technology consulting firm in New York.
The second product announced by Lucent is meant to route Internet information between different points at high speeds and appears aimed at competitors such as Cisco. Lucent said its new product could transmit 2.5 gigabits of information, or the equivalent of about 70 volumes of an encyclopedia, per second.
Cisco says it will begin shipping a 2.5 gigabit Internet switch in the third quarter. Fiorina said Lucent's new Internet products would become generally available in the third quarter or early in the fourth quarter.
Pub Date: 5/28/98