M, my objection was the manner in which Leuthy threw a bucketfull of facts at the readers with a bunch of "mays" and "shoulds" and other qualifiers as to how the specified item could affect Ascend's stock.
Citing a specific Shiva product as having market acceptance and possibly winning orders away from Ascend just isn't useful if we don't have important facts like its price point, the comparable Ascend product it's competing against and the ASND price, areas of the product's superiority over the Ascend item and so on.
Last year Chrysler brought out a new design mini van for its various divisions. Aside from enhanced appearance the van had a driver's side sliding door option - no other maker had one, and the Chrysler products sold like hotcakes in part because of that. That's a measurable, definable market advantage. That's the kind of comparison required to sustain the supposition that Ascend will lose market share but we did not get that, just a lot of stuff about the variety of new products from various mfrs coming into the market place and that they would no doubt affect Ascend negatively.
Intuitively we could suppose that that's true but that presupposes that Ascend is going to stand still and there's nothing in their record that suggests that. Ascend represents a rapidly moving target - just ask Shiva and Cisco and others if that's not the case.
With the market itself growing wildly just in Ascend's traditional areas even if Ascend lost a few percentages points of share it would continue to do extremely well. And there's the matter of Ascend moving into areas where others dominate, now that it has technologies (purchased on the outside, not from their own R & D) to do that - and they are doing exactly that, just as Ejabat indicated when they did the conference call on the NetStar acquisition.
Yes, Leuthy did do a lot of research and he is to be commended for it. It is the conglomeration of that research and the manner in which it was presented as overwhelming evidence that Ascend will have a tough time on its hands in 1997 and therefore it'll likely fall as a result; that's a conclusion I cannot agree with because the mass of facts isn't defined into how they individually affect Ascend's specific products and markets.
Perhaps it's helpful to say that in 1967 Israel was surrounded by opposing nations with armies many times larger than its own, with tank corps in opposition that dwarfed their own numbers, badly outnumbered in fighters and bombers, etc. and all logic would have indicated a terrible defeat based on sheer numbers. Well, you know the outcome of the 6 Day War. Israel was tightly focussed, had superior command and control, was audacious and knew the ground extremely well. It is not too far-fetched to make the simile here except that Ascend is well out in front with its technologies and customer base.
As for Ipsilon, is it shipping its Giga-switch device? The GRF400 has an order backlog and will be shipping in volume by the end of Q1 or early Q2. It certainly is arguable that the Ipsilon products is "better". More to the point, Ascend is not a 1 trick pony and has an effective sales and distribution infrastructure in place.
Dee Jay |
