Thanks for the Fool post, H.N.
In fact, this systems business generates more than 66% of profits at U.S. Robotics according to analysts -- meaning that even if the company makes nothing in its modem operations, it still is poised to earn around $3 per share next year in a business growing at greater than 25% annually.
Got to love that comment. (Don't you agree, Fred!)
U.S. Robotics also is best poised to benefit from the expansion of AMERICA ONLINE'S NYSE: AOL) network infrastructure, although for the third of the network that BBN (NYSE: BBN) is building they are using Ascend's Pipeline product.
Never did think much of BBN's taste.
For both companies, it remains unanswered whether or not this 56K downstream technology will work in the field. U.S. Robotics has issued some pretty positive information about tests, but independent efforts suggest that the actual ability to connect with 56K is limited in many regions of the country due to the poor quality of the Regional Bell infrastructure. On the flip side, it is unclear whether or not actually working is key to mass consumer adoption. Regardless, the battle to the death is pretty fascinating.
Independent efforts? That's a laugh. It reminds me of the end of Raiders of the Lost Ark. Indiana Jones wants to know where the Ark is, and the goverment suits tell him that "top men" are working on it. Jones looks back at them and asks "Who?"
Exactly how do these, uh, independent "researchers" go about determining the effectiveness of 56k in the absence of 56k technology hardware? Crystal balls? |
