Thread, some thoughts (JMHO) on what is happening within the telecom equipment sector.
Jay and others have pointed out that we should see consolidation in this industry going forward. The spending projections for next year is still very healthy. But the concern is the $ percentage rate - from 30% for 2000 to 29% for 2001, maybe slightly less per that Bernstein report. BTW, actual for 2000 is close to 32%. Anyhow, as carriers decide on platforms, technology, and providers, I don't expect volume to decline. Instead, the $ spent will come down as carriers give more biz to fewer providers and maximize volume pricing. With the providers increasing production, this should help their margins also due to similar volume pricing in manufacturing.
But the point of my note is that the market is in a "show me" stage. Those who cite any signs of slowdown will get slammed (CMTN, NT, WSTL, etc.). Those that cite continued growth and gains with marketshare will be rewarded (JDSU, GLW, etc.)
Just some thoughts...
Best to all. |
