Based on what was said by Lucent and Nortel, there will be a marked slowdown in circuit-switch-based spending and increased spending in IP-based systems. So even if over-all spending eases, the part that matters to JDSU and SDLI will expand.
Hi Pat, I think your statement may be a bit of a stretch. Does it really matter what NT or LU say? How about what the carriers are saying? WCOM, Williams, T, and FON are all saying the same thing. Cap-ex will be slowing next year. Those are 4 big names all speaking in unison. And that goes along with all the CLECs who may not just be slowing, but reallllllly slowing. Circuit-switched gear has been slowing for a year. Hence, the lingering LU problems. I think what all the carriers are saying is just what they are saying, cap-ex will be slowing. I don't think any of them explicitly stated that IP and optical will be excluded from the slowdown. Maybe I'm wrong about this, but I don't think so.
Quite the opposite. Being a components' maker makes these guys forward indicators as their products are designed into systems long before they're put in the field.
This wouldn't even be true if by chance the equipment makers (NT, CCO, ALA, etc) were J-I-T manufacturers of this gear. On the contrary, this gear has quite long lead times to build and test. Hence the very large inventories required by the likes of NT. Hence the necessity to have continued buying components past the point of a slight glut in the build/test/sell/install cycle. The component guys are very much lagging indicators.
Gary |
