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Coaxsys enlists layoffs, puts 'TVnet' product line on the block

Wed, 09/20/2006 - 8:35am
Jeff Baumgartner, CED

Coaxsys Inc. is shedding its primary product line and operating in the wake of a big layoff, but the Los Gatos, Calif.-based networking equipment firm remains in business, company officials said Wednesday afternoon.

Coaxsys Chairman & CEO John Morelli, who contacted CED after a story posted in this space earlier in the day claimed that the company had shut its doors, confirmed that Coaxsys is exiting the Ethernet-over-coax business and is in sale discussions for its "TVnet" product line.

Multiple people familiar with the situation said Coaxsys had handed out pink slips on the afternoon of Friday, Sept. 15, after financial backers decided to pull the plug.

Morelli confirmed that a layoff occurred at the company, but dodged repeated questions about how many people were laid off and exactly how many people remain there. Coaxsys VP of Sales Gregory Boe also was present on the call.

"That's a question we are not prepared to answer. We have enough people here to run a company," Morelli said, when asked how many employees remained at Coaxsys. He said the company continues to take and fill orders, and has a working inventory of products.

He suggested that news of Coaxsys' demise was incorrect and the product of a "slanderous e-mail" sent by a former employee of the company.

Coaxsys' flagship product is TVnet, a platform that uses proprietary technology to distribute IP video signals over existing coaxial lines in the home. It touted a theoretical maximum PHY throughput of 100 Mbps. In recent years, the company has entered distribution deals, vendor integrations or deployments with companies such as Alloptic, Amino CommunicationsPower & Tel Supply Co., and Hargray Communications.

"Their technology worked, and it worked great," one Coaxsys partner noted, adding that the company's proprietary approach has been its "Achilles Heel."

Coaxsys' exit from the Ethernet-over-coax market should open the window of opportunity even wider for set-top and gateway makers that leverage advanced, standards-based home networking schemes such as HomePlug AV, Multimedia over Coax Alliance, and HomePNA 3.0.

Morelli noted that Coaxsys plans to refocus on a "groundbreaking" technology involving high-definition video.

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