I just listened to the CC replay. I no expert in this technology, but these are my impressions.
Generally, it seemed very positive, but not without issues. I have a problem, as I assume most other do, understanding Gideon Ben-Efraim. This makes it difficult to take in everything he said.
I believe the biggest issue is the problem of reducing cost of equipment. It appears to me that they are behind schedule from the tone of Q&A. Currently, they say subscriber units are costing $5,000 and hubs range from $50 to $250K with an average of $125. Moving to diecast parts will decrease costs, but again questions suggested they should have already done this. Getting NEC as a subscriber unit producer is expected to reduce costs by $500. They spoke of a goal of reducing costs by 25% per year which has turned out to be a "robust" figure.
In Gideon Ben-Efraim statement, he said many things. Some suggested he didn't say enough, but actually he named many companies and projects. He talked a lot about deployment in Europe. Other things mentioned.
- Perhaps a new OEM partner?
- They have 40 trials, but could have more. They only select companies that have a Kiretsu quality which will mean they all have great multiple deployment potential.
- 40 trials, all of which are certain to deploy. Expect 2 to 3 per quarter to move into service. Currently 8 of 40 in service.
- Moving from lab to first stage customer test in 38 gig in 3 to 4 weeks. Also moving 38 gig to a couple of key customers in Latin America.
Questions from Merril Lynch, Dean Rauscher, and CSFB, all very respectable firms. How many small cap companies like this have a hard time getting companies to follow their progress.
Michael Ching of ML asked about Diginet. Was this meant to tell the world they had a new customer, or a genuine question?
Seems to me that if I heard correctly that they are working to develop a new OEM relationship, that this would be very big news. Certainly, he said the Lucent relationship was very strong.
Also, despite writting off the PTP equipment, they really expected they would sell it eventually.
So, NTRO is getting pounded today as though they missed their number. Could be worse, and it is a generally negative day. I don't really like to see this reaction. I wonder if they could have done anything better? Question is how have the analysts taken the information in form of upgrades/downgrades? I would guess they have to lower some expectations.
Regards,
Mark
PS Looking on the bright side, I was very happy when Netro went to $45. Now that it's going back to $45 I'm not so pleased, but then I'm still in very positive territory. I guess the long term is still very positive. I just wonder if I've missed out in some way when I look at Adaptive. This company seems to have done something stock-wise that has been better. What's it going to take for Netro to do the same? |
