Because the chips are now upgradable, the life of a networking device grows from a mere 12 to 18 months to three to five years, he said. Dave Husak, C-Port's chief technology officer, agrees, pointing out a typical problem in the old days. Husak has a grander vision of how the new generation of chips will affect the networking market. He believes it will soon resemble the desktop PC market, where Microsoft and Intel reign with third-party vendors developing the software. Husak envisions a time when a Dell-like model would work, where a networking vendor can sell directly and build to a customer's specific needs.
Analysts say it's possible in the long term.
In the meantime, the chipmakers are now fighting to sign up vendors to support their chip and software platform, Freeman said. The new chips will result in networking hardware vendors earning less money from hardware, and more money from services, such as software upgrades, Donovan said. Eventually three or four chipmakers will sell the majority of the world's communications chips. Lucent Technologies and Intel will be two of the companies, with Texas Instruments , Motorola , Conexant and Broadcom fighting for the other spots, he said. Most of the start-ups will eventually be bought out by the larger players, with a few staying independent, he said.