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Technology Stocks : Newbridge Networks

NN 13.98

+0.9%

Nov 26 3:59 PM EST

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To: zbyslaw owczarczyk who wrote (14035)	10/28/1999 4:27:00 PM
From: Doug	Read Replies (1) of 18016

Z.O: I appreciate that you are a visionary Futurist but I do not have the same talent you have to see into dark space. However I do concentrate on current market forces. The Industry has 2 clients. The Enterprise Class and the Consumer. The Enterprise class is not going to spend more on its Communication Billing unless it sees a return for that Investment. The GDP growth rate is 3.5% which means Communication Billing growth is likely to be close to that level. The other client is the Consumer. Currently the Consumer market is divided into 2 sectors viz Wireles and Wire. The former has great potential for 2 reasons. Half the world cannot afford Wire Networks and prefer Wireless. It also offers great convenience. The growth of the Cable/DSL Mkt is slower mainly because only 10% of Internet users are willing to pay $40+ for a faster connection. Ofcourse we have more Networks than before. Has the increase resulted in a greater return for the Provider.? The nearest parallel I can give you is in the Aircraft Industry. Sure we have more planes and more travel. But look at the Airline stocks and the Boeings today. The only one who benefited is the Consumer. At the moment, the main Eqpt suppliers have an increasing order Book. Nevertheless they are unable to dictate prices. The market which is currently still that of a Seller is changing to a BUYER's one. This means that the Buyer will have a greater say regarding Margins. To counter act that, the Industry has been consolidating. Consumers must be thankful that the Govt ensures that the Consolidation will not go too far. I am not too concerned with the details of NN's gear. All I know is that they now have competition from others with bigger R&D bucks to make a better Mouse trap downstream.

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