MRV Communications (MRVC) opinions? Message Board

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Technology Stocks : MRV Communications (MRVC) opinions?

MRVC 9.975

-0.1%

Aug 15 5:00 PM EST

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To: cmg who wrote (14955)	8/9/1999 10:45:00 PM
From: Sector Investor	Read Replies (2) of 42804

<<How again is mrvc attacking this market?>> Nbase-Xyplex has the world's only hardware router with Linux Software. This allows a completely "open" system - anyone can tailor or enhance any way they want to. They can make it work with ANY vendor's security software for example. Customer's have the maximum flexibility, options and choices. From the way they are playing this up, there will probably be other Linux based products coming out as well. CSCO has to defend it's proprietary IOS so it is not about to do much here, other than try to tweek IOS a bit. The bottom line is MRVC has a good chance to differentiate themselves - and differentiation means they can have higher margins and keep them high for quite a while, because if people want an Open System router, we are "it" for now. Remember also that a base or "typical" price here is $300,000. Let's see: even a 50% margin (I bet it is higher) is $150,000 profit. After fixed overhead costs are accounted for (the rest of MRVC's sales do that) each 1 cent on EPS is about $270,000, so sales of TWO LINUX ROUTERS should add a penny to EPS. How many do you think Nbase-Xyplex can sell? The answer could be "lots". Please check my math, but I think you'll see why we are all excited about this.

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