At the Optical Fiber Conference on Monday, IBM (NYSE: IBM) researchers unveiled a prototype optical chipset that they claim will allow high-definition movies -- which currently can take 30 minutes or more to download -- to be transferred in a single second.
The technology is still 18 to 30 months from reaching the market, but advances like these made IBM my selection as the best blue chip of 2007, as well as the best tech stock of the year.
The new chip's clock speed has been estimated at 160 gigabits, or 160 billion bits of information. Beyond allowing users to download Will Ferrell's latest movie in a blink of an eye, the technology also offers a peek into an exciting new era of high-speed connectivity.
Everything from communications and computing to entertainment and modern medicine could be radically transformed. Digital data would no longer hit the bottleneck of copper wires. Among other things, this means digital X-rays could be zapped directly to a doctor's hand-held screen; oil engineers could review seismic analysis of promising oilfields on a real-time basis; and home entertainment networks would seamlessly and efficiently transfer movies and music among televisions, computers, and hand-held devices.
In the short term, these optical chipsets are likely to find a home in supercomputers, as well as the thousands of microprocessors that companies such as Google (Nasdaq: GOOG), Yahoo! (Nasdaq: YHOO), and Microsoft (Nasdaq: MSFT) are using at their massive data server farms. The new chip will greatly reduce the amount of energy needed to both power and air-condition these energy-draining systems.
IBM is not alone in the field. I have written about Intel's (Nasdaq: INTC) work in the field of silicon photonics, but today's demonstration suggests that IBM's advance is not just a lab-room curiosity. It is a functioning technology that could be contributing products and profits in the next two to three years.
Such a timeline may be a little long for short-term investors, but for those with a more patient outlook, today's news offers further evidence that IBM's prospects are not an optical illusion: The company is a solid, long-term investment.
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Fool contributor Jack Uldrich owns stock in both Intel and IBM. The Fool has a strict disclosure policy.
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