SAN JOSE, Calif. — Micro Linear Corp. said Tuesday (Oct. 8) that it is discontinuing its development activity on IEEE 802.11a wireless LAN chips, citing slow sales growth and excessive competition. The move indicates that the long-expected shakeout in a field that has more than 60 competitors developing products may have begun.
Micro Linear revealed its decision prior to announcing its preliminary third-quarter results; the stoppage is not expected to impact customers or revenues for 2002 or 2003. Although the company has a large portfolio of 802.11b W-LAN, Bluetooth and HomeRF devices, ranging from power amplifiers to baseband processors, it has not yet developed an 802.11a presence.
"We see the market for 802.11a products growing much slower than expected while at the same time becoming crowded with competitors, making this specific technology sector very competitive and incapable of delivering revenues consistent with Micro Linear's strategic objectives," said Tim Richardson, the company's president and chief executive officer.
Richardson said that Micro Linear will refocus its engineering efforts toward other wireless products "where the company has consistently demonstrated key competitive advantages and revenue growth."
The changes will result in the loss of 39 employees as the company redirects its engineering activities and reorganizes its sales, marketing, and applications departments, the company said. The company's fourth-quarter financial results are anticipated to include a charge of approximately $500,000 in connection with the restructuring.
For its third fiscal quarter, Micro Linear announced that it expects net revenues of approximately $9.1 million, compared to revenues of $8.9 million for the second quarter and revenues of $7.4 million for the third quarter of 2001. The company anticipates a third-quarter 2002 operating loss of approximately $900,000, and net income of approximately $3.2 million after recording the receipt of a $4.0 million tax refund. This compares with an operating loss of $1.2 million and a net loss of $1.2 million for the second quarter of 2002, and an operating loss of $3.2 million and a net loss of $2.8 million during the third quarter of 2001.
