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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: Bridge Player who wrote (14962)8/10/1999 9:56:00 AM
From: Sector Investor  Read Replies (1) of 42804
 
As I see it, a key here is product differentiation.

Before, in the low-end Ethernet switch niche, where they were interface poor, they had almost nothing to differentiate them except price. When COMS and CSCO moved down to the low end of the market they got hurt on margins.

However, look at their NEW products.

MetroFusion is a unique concept right now.

Aranea 1 looks to be one of the top core routers in the world when it comes out of beta - and noone has the broad range of connectivity (for example GE is missing in the other competitors, and Noam said their was an ATM advantage too).

AcceleRouter has a huge market opportunity, and MRVC looks to have a strong entry - and CSCO doesn't.

Linux Router is the first of it's kind.

Fiber Driver is still unique too.

Wireless traffic driver only has LU as a competitor (not to belittle LU in any way).

Differentiated products can carry higher margins for longer times.

I don't know what MRVC plans here, but they know they have to raise them, and they know they have differentiation now. I would think they would set 60% margins and work from there. If they have a lower cost structure they would still have very attractive prices. But who knows?
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