UPDATE 1-Option plans capital increase, more cost cuts

* Plans move from commoditised hardware

* Plans 20 mln euro capital hike, 20 mln euro in cost cuts

* Q3 revenues lower than expected, down 41 pct yr/yr

* Shares hit six-month low

(Adds details, background, shares, analyst comment)

BRUSSELS, Oct 29 (Reuters) - Belgian wireless Internet device maker Option (OPIN.BR) unveiled plans for a capital increase and further cost cuts on Thursday after reporting lower than expected third-quarter revenue.

The shares, suspended in early trading, dived on resumption to a six-month low of 1.13 euros and were 11.9 percent lower at 1.26 euros by 1040 GMT.

Option, which makes cards, USB sticks and embedded modems that allow laptop users to surf the Internet at high speeds, has struggled to cope with a market that has shifted to high volumes and low margins.

It said it would seek to move from commoditised hardware by offering services and integrated solutions to device manufacturers and telecom network operators.

Option, once the darling of the stock market, said it aimed to reduce annual operating expenses by 20 million euros ($29.48 million) in 2010. It had already reduced quarterly operating costs by 35 percent in the year to date.

This would include the lay-off of 55 staff at its headquarters in Belgium, further outsourcing to China and streamlined sales and marketing. A one-off restructuring charge of 7 million euros would be booked in the fourth quarter.

It would also be launching a 20 million euro capital increase, without giving further details.

"The revenues are frighteningly low. The only positive I can see is an improvement of the gross margin, but it is not enough to counter the decline of revenues," said Bart Jooris, analyst at BNP Paribas Fortis.

"The capital increase plan will not be enough if the revenues do not go up again."

Revenue in the July-September period fell 40.8 percent to 35.7 million euros ($52.61 million) from 60.3 million a year earlier and against the average forecast of 50 million euros in a Reuters poll of five analysts.

Earnings before interest and tax (EBIT) was a loss of 6.7 million euros, slightly better than expected. ($1=.6785 Euro) (Reporting by Philip Blenkinsop and Antonia van de Velde; editing by Simon Jessop)