So, what qualifies as discontinuous innovation? Well, I follow the guidelines set forth by marketing specialists like Geoffrey Moore. A discontinuous product needs to fundamentally change the way that users conduct their lives and interact with their environment.

Often, it is easier to define things by what they are not. Semiconductor products that combine multiple copies of the same function on one chip (horizontal integration) don't qualify as discontinuous innovators. Nor do vertically integrated solutions that merely cut cost.

To find discontinuous innovation in communications semiconductor products, one must look for chips either that combine existing functions in a new way or that introduce new ones. Today, perhaps the one example of the former is residential gateway chips being designed by Broadcom, Infineon, Ishoni, Texas Instruments, Virata and others. If they catch on with consumers, boxes built using those devices will offer broadband data service, home networking and instant provisioning of digital telephone service. As for the latter, tunable lasers and possibly Sonet transceivers with digital wrapper technology are the only examples.

Perhaps the lack of innovation can be blamed on weak financial markets that have made entrepreneurial ventures more risky.

Down the line, what kinds of products could offer discontinuous innovation and address user wants and needs? One possibility is a solution that delivers end-to-end quality of service on existing packet networks without forklift upgrades. Another is a solution that elegantly lets service providers and carriers deploy and manage next-generation services. A third option is a solution that bridges data networking and storage networking.

Let this be an open call to entrepreneurs to put their thinking caps on. Venture capitalists are reportedly flush with cash, the IPO market should reopen by the time products are ready for market, and, more important, the world craves "more cool stuff."

Jeremey Donovan is a Principal Analyst for Communications at Gartner Dataquest (jeremey.donovan@gartner.com).