Summary:

After being on the ropes for a long time, it seems Lucent Technologies might finally have some good news to share this week. The company hosts an analyst day on Thursday, and is most likely to talk up with wireless business. Incidentally, wireless now accounts for […]

After being on the ropes for a long time, it seems Lucent Technologies might finally have some good news to share this week. The company hosts an analyst day on Thursday, and is most likely to talk up with wireless business. Incidentally, wireless now accounts for nearly 50% of Lucent’s total $8 billion in sales. But this euphoria might be short lived. Over past three quarters, Lucent has been posting better than expected results because of strong orders from Verizon, which has been rolling out a massive EV-DO network for a nationwide launch. By mid 2005, the orders from VZ are going to slow and Lucent would have to look for another sugar daddy!

Will the combine AT&T Wireless & Cingular be that Mr. Big Pockets? Albert Lin of independent American Technology Research believes so, and thinks that the combined entity would be a “must hold on to” customer. In order to counter, Verizon, and perhaps Sprint’s EV-DO offerings and Nextel’s megaband solutions, Cingular would eventually have to move to UMTS’s most virile form, HSDPA – High Speed Downlink Packet Access. Lin doesn’t expect this decision to happen up until 2006, and that means some anxious months for Lucent. Sure there are some minor customers such as Sprint, China Unicom, Hutch’s 3, O2, Orange and some carriers in India. But they may not be enough to keep the Lucent machine humming. Perhaps that is why Thursday will be a day to watch as far as Lucent is concerned.

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By Om Malik

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