Charlie,
You are right to be be watching BOL for the reasons you suggest. I am concerned that Logan has been making apparently irrational decisions. The basis for that statement cuts across a number of issues but one example is the (1)timing and (2) magnitude and (3) character (tiered makes more sense from an incentive and customer good will point of view)of the pricing decision.
That said, the information I have suggests that BOL is not seeking to launch a bloody war. Its recent decision not to license is more of a reaction to VISX's radical and unexpected moves. If VISX gets good news from the PTO later this month or next, BOL will have a decision to make. I think what BOL really wants the LVC market for is to pad its bottom line and add some juice to its top line. Furthermore, even if it wanted to spray bullets, it isnt positioned yet. It has FDA approval for a relatively narrow range of applications. Though that narrow range of applications encompasses much of the segment that Logan is targeting with the price cut, the narrowness still is an issue for many of the service providers. BOL also isnt ready with service. It is outsourcing service now to a 3rd party. That presents greater execution risks.
Those points favor VISX and, I think, is what is behind the recent VISX moves. Logan is making a huge bet here. He still can count on competitive advantages (in service, range of applications, installed base). Over the near term, visibility is very low. I think this could go lower over the near term (depending on the timing and side of the PTO decision)and yet it could be at 45 a year from now. |
