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I am, however, a skeptic. I think this popular hardware-is-back” narrative needs closer scrutiny.

807-080-524-212_Datasheet PDF

I am, however, a skeptic. I think this popular hardware-is-back” narrative needs closer scrutiny.

Watch us.

— Junko Yoshida, Global Co-Editor-In-Chief, AspenCore Media, Chief International Correspondent, EE Times

807-080-524-212_Datasheet PDF

PALO ALTO, Calif. — Executives from Agilent Technologies Inc. blamed the company's financial woes on several factors, especially very weak” sales and losses in its flagship test and measurement business.

As reported, Agilent on Monday posted a smaller-than-expected loss in its fiscal third quarter, but it also announced plans to cut 4,000 jobs, or 9% of its workforce, to restore profitability as soon as possible” (see Aug. 20 story ).

The Palo Alto-based supplier of test systems, semiconductors, and instruments also reported a 33% sequential drop in total revenues to $1.8 billion in the fiscal third quarter, ended July 31, compared to $2.7 billion in the prior quarter. It lost $219 million, or $0.48 per diluted share, compared to a net income of $155 million, or $0.34 per diluted share, last year.

807-080-524-212_Datasheet PDF

Dragging the company down in the quarter was its test and measurement business. In total, this segment reported a loss of $151 million in the third quarter, compared to a profit of $122 million in the like period a year ago.

In this segment, the company also reported sales of $1.115 billion in the quarter, a 26% drop over the like period a year ago. Orders were $753 million in the quarter, a 57% decline from a year ago.

807-080-524-212_Datasheet PDF

Within Agilent's test and measurement sector, the company makes instruments, automatic test equipment (ATE), and other products. During the quarter, the company's ATE business appears to have suffered the most. Other ATE suppliers–including Advantest, Credence, LTX, Teradyne, and others–are also suffering due to the current downturn in the test business.

There is still some demand for chip testers, but ATE vendors will be confined to technology buys” for at least the next few quarters,” said Ned Barnholt, president and CEO of Agilent, in a conference call to analysts on Monday.

The situation here is not unique to wireless LAN,” Hogan said. There's always a great deal more talk than walk in the beginning. Clearly, Zero-IF, CMOS, or quasi-CMOS solutions are going to be a good piece of gear when they're ready for prime time and can ship in volume.

There are really only three suppliers of 2.4GHz radios today [Intersil, Philips, and RF Micro Devices], and if you want to believe those press releases [from Atheros and Resonext], within six months they're going to have ready the most aggressive architecture, Zero-IF, using the most aggressive process, CMOS, and at a 5GHz rate,” Hogan said. But if you look at history in general, the promises of early entrants are always out ahead of the deliverables.”

WLAN is clearly gaining momentum, partly at the expense of other technologies like Bluetooth, according to Will Strauss, an analyst at Forward Concepts Co., Tempe, Ariz. 802.11b, he said, will continue to make up the bulk of actual shipments for the next year or two.

802.11b is where the market is now, and 802.11a is plowing new ground, but it will be slow growing as the infrastructure builds,” Strauss said. You can certainly argue that Atheros and Resonext have put a stake in the ground and will be positioned to be players as the 5GHz band opens up.”

Intersil controls 80% of the 802.11b market, and plans to have samples of 802.11a devices based on a silicon germanium process by the end of the year, said Jim Zyren, director of strategic marketing for wireless networking at the Irvine, Calif., company.


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