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Politics : Formerly About Applied Materials

AMAT 252.25

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Nov 28 9:30 AM EST

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To: 16yearcycle who wrote (8387)	10/2/1997 1:19:00 PM
From: Kumar Nathan	of 70976

Eugene : OFF TOPIC Regarding your inquiry about ascend: I some two months ago thought that the next wave of new money will go into networking arena. I still believe that will be the case. But my timing was wrong. When you look at Dell, CPQ and Gateway, they all have bang buster qtr continuously. Dell alone is doing more than $2M worth of business each day through their web page. The important inference from that fact are the following: 1. Internet commerce is growing like cracy. 2. # of internet connections are doubling every 3 months 3. # of PCs selling is much brisker than ever. Let me go through point 3. Every computer you buy will have either a modem or an internet card. What does it tell you it tells me that ASND and 3 COM are going to benefit out of it. Every single PC users update their modem card almost every year. I did it recently. That market alone is huge. Every single IP provider is spending more than 30% of their revenue in updating their capital equipments. This tells me that ASND and CSCO are benefiting out of it. You ask your corporate IS people they will have at least a 500K worth of capital requirement to upgrade their networking stuff. All these facts zeros in on the potential demand from networking industry. PC sales are to grow very rapidly. More than 90% of the world population do not have a PC. For example; India has one of the high literacy rate but only .5% of the middle class have a PC. If you concentrate Indian Middle Class market space, that market alone is equivalent to current US, Europe, Japan & Australia put-to-gether and then multiply by 2. All of those guys need to be networked too. If you take China, then that is a much much bigger market than I discussed. These market are very emerging and information-hungry market. Therefore the future of networking and PCs are humongous. I definetly dont see any slowness for the next 5-10 years and beyond. I can go on and on. But coming to your specific enquiry about somebody acquiring ASND. It could be LU. The reason being that LU is vey ambitious. They grow by acquisition. If they acquire ASND, then overnight LU will become an networking powerhouse. If you combine Telecommunication equipment maker and Networking equipment maker, you got a huge synergy. It will be an immediate threat to CSCO. I think that is what everybody is anticipating. LU is actively in the networking arena, they have some deal with BAY and they have some negotiations with FORE. But acquiring any one of them will not turn them as networking powerhouse. But if they acquire ASND then they will be a powerhouse. I agree with you about the credibility of ASND management. They prove themselves as confusing and deceptive and they definitely on the wrong side of analysts. It will take a while to get back the credibility. I hope I make some sense. Regards Kumar.

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