Of course, I can still hope Phase 4 is a patented soliton solution.
I haven't heard anything about JDSU and solitons...is there a basis for considering this likely as Phase IV? Given that Phases I through III were broad business strategies, I'd kind of expect IV to follow in that tradition and not just be a (yet-to-be-commercialized) lab technology. My thoughts were that JDSU moves further up the food chain (i.e., beyond modules to increasingly complex "super-modules", but perhaps retaining the "module" name for its political correctness [i.e., they don't want to be doing "systems" as that competes with customers, but what might happen when you take the integration metaphor far enough?]), or that perhaps they have a new focus on a hot emerging market like metro (you know--the new new thing). As for long haul, one would think a good part of the premium for SDLI is going to buy its lead in Raman, so if JDSU had a credible alternative strategy (inc. Raman) the merger might not have been so enticing.
Pat has mentioned Raman and AWGs, to which I would add SDL's expertise in 980 nm. We can imagine the DOJ will allow the merger to go through in some form, but the issue comes down to what the sacrificial lamb will be (this we can expect). In the case of ETEK, they just had to nix some exclusive-supply agreements without shedding off any businesses. With the SDL merger, the DOJ is more likely to ask for some operational divestitures. One of the questions is whether JDSU might give up its own 980 nm biz if that is what DOJ requires. We can only speculate at this point, but as the story unfolds, we should all get an education in the competitive landscape--first from the comments of JDSU customers which are expected by end-August as Pat mentioned; and later, as we (presumably) learn what kind of measures the DOJ will require for merger approval; and finally, as we learn whether JDSU will accept those measures. If they agree to sell or otherwise compromise their own 980 nm business, I think that says a lot about what they see in SDL.
BTW, I would guess this is the last merger of substance (market cap-wise) that JDSU does which is accretive. After SDL is gone, there will be a bunch of small companies carrying ridiculous market caps on small revs with little or no profit. Wait, it's already like that... |
