BY DWIGHT DECKER
Chairman and Chief Executive Officer,
Conexant Systems Inc.,
Newport Beach, Calif.

The broadband revolution is complex, which makes market progress hard to predict. It's not uncommon for technological innovations to quickly capture industry and consumer attention only to stall during deployment before gathering steam again on the way to mainstream adoption. We are in the midst of a very painful interruption in an otherwise healthy, long-term telecommunications market expansion-the challenge is to weather the current slowdown without diminishing the capacity to compete as business picks up again.

There's no rule book for navigating today's high level of market volatility. No one knows if growth will resume during the second half of 2001, or if there is a second dip ahead. Prudent companies are acting in a predictable fashion by focusing efforts and redistributing resources to exploit their core competencies in the most promising market segments-segments where innovative products can truly make a difference.

For instance, as telcos seek to offer consumers bundled services and less costly DSL loop qualification and service deployment, chip suppliers like Mindspeed Technologies are offering solutions that include all necessary hardware and software, while building line-diagnostic capabilities right into DSL silicon. In the increasingly competitive wireless marketplace, companies like Conexant are creating complete digital cellular handset system solutions that cut development costs and help manufacturers speed products to market. We will continue to focus our resources on product initiatives that build on our core competencies and deliver tangible advantages while solving critical problems.

In the final analysis, an evolution from tremendous initial market growth to a more sustainable rate is not uncommon. There is clearly long-term demand for large, powerful networks that will support bandwidth-hungry applications such as digitized music, movies and software, and high-quality videoconferencing. The revolution will simply not happen as quickly as once believed, and it may follow deployment vectors we can't fully predict.

For now, companies must weather the downturn and prepare for a more measured growth path rather than last year's meteoric expansion.

It is now even more important to execute flawlessly on product developments targeting the most promising market segments. The implementation of a narrowed market focus coupled with crisp production execution will best position businesses for the coming market upturn.

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