<<PAIR, ASND, US ROBOTICS, COMS etc.>>
the last time i talked with ASND (a couple months ago) they were pretty mum about their DMT plans but confirmed that AWRE/ADI was their supplier of record.
USRX/COMS: going forward, do they contribute any revenue to AWRE? I thought the deal there was a purchase of intellectual property, not a licensing arrangement. that suggests a one-time payment and no royalty stream.
I'm skeptical about PAIR ever shipping an AWRE/ADU-based product. I've read reports that have had the CEO saying that the AWRE/ADI chipset was a hedge position and that they were waiting for CopperGold.
Then there's the issue of whether ASND and USRX can really be players in the rollout of ADSL services worldwide. These two companies have benefitted from the huge number of ISPs out there and well as the growing number of corporations creating dial-up services for their remote workers. I'd argue that ADSL will not roll out the same way and in fact will sweep away these two strongholds.
Telcos will dominate if not monopolize ADSL services to the home. Only the telcos can afford the high up-front costs, package the full set of value-add services that ADSL can support, and provide sufficient back-end switching and bandwidth, to support a broad market. some ISPs might find niches, but even today in the analog modem environment consolidation is squeezing ISPs out. Also, as U.S. West has already shown, telcos are not above using their monopoly powers to deny ISPs access to the 'dry copper' they would need to offer ADSL services.
The other ASND/COMS remote access stronghold, the corporate dial-up market, will disappear over time, replaced by Virtual Private Network technology running across the Internet. Why would corporations want to pay to buy and maintain private dial-up pools when remote workers can use the Internet as a virtual WAN, accessing the corporation securely over any Internet connection, presumably a telco-facilitated ADSL service. this is exactly how the GTE/Microsoft ADSL trials in Redmond, WA, are structured.
Given these trends, I believe that ADSL vendors who focus on selling (directly or through alliances) into a telco-dominated market will do better than those that bet on ISPs and corporations leading in the deployment of ADSL. Except for the DSC and PAIR deals (both still a bit vaporous), I think AWRE's partners are focused on the old paradigm.
So... even if the AWRE technology doesn't suck, I question whether they have the winning partnerships.
All of this is IMO, if that wasn't clear.
I realize this is inflammatory but I didn't write this to piss people off. i'd appreciate any reasoned and polite responses that focus on the ideas here and not personal attacks.
for full disclosure: I'm very long on AMTX, long on WSTL, and have traded AWRE in the past profitably. I am not short AWRE or any other stock (though RMBS and CIEN are looking mighty tempting).
mark |
