Raymond, This is a potion of a post I recieved from walkingshadow. It refers to TERN/CMTO and BRCM. The reference to CDMA over cable is what interested me. By way of the settlement ($17M this qtr.) with Stanford Technology, did'nt BRCM aquire the rights to a form of CDMA over cable. COM21 modems were just selected by ATHM. This should help BRCM, no? D.H.
_________________________________________________________________
TERN certainly wears the crown in the cable modem kingdom. Recently annointed by George Gilder, TERN has had a famous ascent from relative obscurity. Praised for its S-CDMA technology, TERN is known for its ability to provide reliable communication over noisy old cable loops. In fact, it has been invited (along with BRCM) to co-author DOCSIS 1.2, incorporating its S-CDMA technology into the standard. TERN also develops its own modem chipset, which is pretty unique.
Currently, there is a great disparity in valuation between the two companies. TERN has ridden a nice wave of PR, commended on its technical prowess by critics in the industry. This has resulted in TERN being priced at a high premium to CMTO. In my opinion, this is because of its S-CDMA technology, and the co-authorship with DOCSIS 1.2.
On the other hand, CMTO has endured some major setbacks, which has eroded its stock price from a high of 35 in April, to its current price of about 18. In May, Mark Laubach resigned as Chief Technical Officer. This event caused the stock to tank. Just as it began to build up steam again, news of the fact that CMTO failed to achieve DOCSIS certification dropped the share price like a stone. Things have not been easy lately for CMTO shareholders.
Some people point to these facts, and assert that TERN has a lock on the market. They develop and manufacture their own chipset. CMTO uses chips provided by BRCM. The withdrawal of the CTO, coupled with the failure to achieve DOCSIS certification create a perception that maybe CMTO does not have the same level of technical expertise. I wonder.
The numbers cut through the market's perception, however, and tell a different story. Let's take a look at the 2nd quarter details:
Financials:
_____________________________________________________________________
_________________________________________________________________ |
