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Technology Stocks : Boca research - Reawakening?
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To: Stu who wrote (378)4/3/1997 3:30:00 AM
From: beenay25   of 640
 
Inventory levels must be watched with all vendors. I hear that USR is the most exposed with 28.8 and 33.6 product in distribution (about 4 months worth). Is all of that product upgradable to 56K? At what price is USR exposed at? Are they going to price protect or stock rotate? These are the business issues the buyers face. They are very aware of the constant changes and watch inventory levels before they stuff shelves with new technology.

As far as Rockwell product not selling because it's Rockwell doesn't fly with me. There is very little Flex stuff in the pipeline and 33.6 on down is ITU standards stuff so why should a consumer care? A buyer doesn't care... It's all a price and speed to them. I do agree that connecting to something is important of course and that's were USR has the advantage, but only at the 56K level. A snapshot of the current market shows that most of the product selling is low cost 33.6 modems not 56K. Boca, Diamond, Zoom, etc. all sell this product.

Yes, 56K is of most importance to all of these vendors because it will help spur a new round of sales much like Pentiums helped lift the PC makers out of the doldrums but, again, aging inventories of product that is so 6 months ago must be addressed. I'm sure USR doesn't want that sold product back.

As far as how Diamond relates to Boca - Diamond is now going through the transition that Creative went though after the world of multimedia kits collapsed. These MM kits had very high ASPs and therefore generated outstanding revenues. That's all gone now and it's adjustment time. Boca never got into this multimedia kit world.

This whole 56K phenom has screwed with 1-2 quarters revenue of every manufacturer. Potential customers are confused and do the deer in the headlights thing. I agree with David... the standard will get the market back to good old competition with the products and not who's connecting or not.
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