Considering this weekend's discussion of G&K and JDSU, thought the thread would enjoy this interview last month with the CEO of JDSU; if Lindy is right that Intel was not a gorilla, Gilder compared king JDSU to Intel...I've highlighted some phrases in bold
KEVIN N. KALKHOVEN - JDS UNIPHASE CORPORATION (JDSU)
CEO Interview - published 11/04/1999
CEO INTERVIEW: KEVIN KALKHOVEN, JDS UNIPHASE CORPORATION (JDSU)
THE WALL STREET TRANSCRIPT CORPORATION (HAU230)
KEVIN N. KALKHOVEN is co-chairman and CEO of JDS Uniphase Corporation.
Mr. Kalkhoven joined Uniphase in January 1992 and has been a member of
the board of directors since February 1992. Mr. Kalkhoven was
responsible for positioning Uniphase into the telecommunications
marketplace in 1994 and for the acquisitions of the world renown
research and manufacturing facilities: United Technologies Photonics,
IBM Laser Enterprise and Philips Optoelectronics. Under his management
Uniphase has become a recognized leader in the fiber optics components
industry for telecommunications and cable TV and was called by George
Gilder, 'The Intel of the Telecosm.' Prior to joining Uniphase, Mr.
Kalkhoven held executive positions at a variety of software companies.
He served as president and CEO of Demax Software and as president and
CEO of AIDA Corporation. Previously, he was vice president of marketing
for the European division of Comshare Corporation and group vice
president for the U.S. company.
SECTOR: communications equipment
TWST: Give us a brief overview of the JDS Uniphase Corporation?
Mr. Kalkhoven: JDS Uniphase was actually formed by the merger of JDS
FITEL in Canada and Uniphase Corporation of the United States, both of
which were leaders in their own fields of fiber- optic components for
the telecommunications and cable television industry. Uniphase was the
leader in what are called active components. These consist of the
semiconductor laser technology that is necessary to provide the light in
a fiberoptic network. JDS was the leader in what are called passive
components which is a technology that's necessary to guide and control
the light in a fiberoptic network. The combination of the two gave us
the broadest product range of technology in the industry and allowed us
to move one step further to the creation of what we call our module
strategy or the integration of these components into solutions for our
customers. As a company, we are 50% bigger than all our competitors
combined and growing 50% faster.
TWST: What are the most significant trends, developments or changes you
anticipate in your marketplace over the next several years?
Mr. Kalkhoven: Clearly, the trend is for more and more bandwidth. Our
customers are the telecommunications equipment manufacturers who in turn
have the network services providers as their customers, such as AT&T or
MCI WorldCom and others. The customers, of course, for the network guys
are you and I, and all of us are demanding more and more bandwidth,
whether it's in our cable television systems or our telecommunication
systems. So the biggest market trend is the demand for higher speed
bandwidth. We are moving from a computer-centric world to a bandwidth-
centric world. This trend means that the network services companies have
to provide more and more bandwidth to their customers which in turn
means they require more and more complex equipment from the
telecommunications equipment companies who in turn come to us as the
components companies and ask us to provide higher and higher speed
bandwidth. It's all one trend.
TWST: What are the greatest opportunities for JDS Uniphase over the next
several years?
Mr. Kalkhoven: Clearly, the opportunity is to be the market leader.
George Gilder described us as the 'Intel of the tele-coms' and that is
the opportunity we have which is to become the definitive supplier of
optics technology to the telecommunications equipment manufacturers.
TWST: Does anything keep you awake at night about the company? Any major
concerns?
Mr. Kalkhoven: Ramping up production. We're a billion dollar company
that's having to sort of double every year.
TWST: Any opportunities for improvement of JDS Uniphase? Any weaknesses
of the company?
Mr. Kalkhoven: We clearly need to provide greater levels of automation
and manufacturing for our customers. The industry is still pretty much
in its infancy. We have to have very high reliability devices that are
still on the edge of technology. So we are evolving through the same
kind of processes that the semiconductor industry did.
TWST: How do you think your R&D expenditures will change in the future
both in terms of amount and emphasis?
Mr. Kalkhoven: We allocate about 8% to 9% of our revenue dollar to R&D
and of course the main thing about that is when your company is doubling
in size every year, it means your R&D budgets are doubling in size every
year. So R&D budgets are increasing very rapidly and we're putting them
in to a combination of new optics technology and also manufacturing
technology to enable the cost to be driven down.
TWST: What are your sales and marketing approaches?
Mr. Kalkhoven: We basically have only about 120 customers worldwide. I
mean there just aren't that many telecommunications equipment
manufacturers, so our approach is very much one of account management
and designing. Our engineers typically will be degreed engineers or PhDs
working with our customers' engineers to design specific solutions.
TWST: How do you feel about your current stock price?
Mr. Kalkhoven: You know, I know a lot about optics. I don't know a lot
about Wall Street.
TWST: If you were sitting there now with a group of professional long-
term investors, what reasons would you give them to invest in JDS
Uniphase?
Mr. Kalkhoven: Simply that bandwidth is going to be...or the Telecosm as
it's sometimes called, is the next big, revolution in technology. In the
70s and 80s, we had the computer revolution, while in the 2000 and
beyond, it's the telecommunications revolution bringing it all closer
together, and clearly an example of that is the Internet. We are the
leading supplier of very complex fiberoptic technology to this industry
and we believe that it is going to be as significant or more important
in time than the silicon industry.
END INTERVIEW
So, if JDSU is a king, it looks like it might be even more kingly than Dell once was. As for entry points, how about now?
Jill |
