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Technology Stocks : Wind River going up, up, up!
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To: Michael Gaudet who wrote (8001)6/23/2000 9:56:00 AM
From: Allen Benn  Read Replies (2) of 10309
 
Wow, what a timely article!

I interpret the article to say there will be 9 million DSL lines in North America by 2004, and 4.5 million in Asia by the end of next year. This suggests that Asia alone will exceed 10 or 15 million by through 2003. Throw in Europe and the 23 million could be ballpark for 2003.

The article indicates DSL is getting off the ground faster than I thought. This implies the back-of-the-envelope numbers I came up with might be improved by jacking up the current numbers and lowering the growth rate to compensate -- unless the 23 million is an understatement, given the global interest in DSL.

The article also implies that services layered on top of DSL are expanding much faster than I would have expected. The effect of these services pressures would be to increase WIND's ASP perhaps faster than I casually assumed. On the other hand, I would expect commodity pricing to increase pressure all the way upstream to the software suppliers along with everyone else.

The point is that each of the 45 analysts in that room will apply their own starting conditions, growth rates, changes in market share and ASP, having heard what WIND has to say about their role and future plans for the market segment. I suspect the range of estimates will vary across the map, but I would also expect every single one of them to result in significant rapidly growing revenue for WIND. That's the real value of lily pond stories for established market segments and associated metrics. They enable analysts to do their job as they see fit.

Allen
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