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Technology Stocks : Ascend Communications (ASND)

ASND 210.01

+1.7%

Nov 26 3:59 PM EST

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To: scott maragioglio who wrote (22193)	11/9/1997 4:10:00 PM
From: Lee Martin	Read Replies (3) of 61433

<<Lee, Your right about the Cisco-Ascend pricing battle. Ascend has port density, This is the number one criteria from large remote access buyers. The TNT crushes the AS5300 in port density. >> IMHO ASND continues to be both the market leader and technology leader in each of its core businesses. I believe the tech. problems with the new 56k hardware are over and we will have an ITU standard early next year. Apparantly k56flex is now winning the modem war according to reports from COMS stating that the channel is stuffed with x2 hardware. All the ISP's report that their volume of traffic is increasing faster than planned and they are adding capacity. I still get a busy signal on AOL during peak demand hours and they just upgraded the POP to 56k and doubled the number of modems. They simply are not able to add capacity fast enough to keep up with demand. What's going to happen after XMAS when everybody decides to surf the net with their new sub-$1k PC from CPQ that contains a k56flex modem. Adding x2 cap. when all the big OEM boxmakers are installing k56flex won't help you gain customers until the ITU standard becomes a reality. If you're an ISP and you NEED to add k56flex capacity as fast as possible who are you going to call CSCO or ASND ? Ans. The hardware provider with the highest cap., most scalable equip. which is ASND. So demand for ASND's products should increase. My worry is that CSCO has MUCH greater resources than ASND and has a much broader line of products. Therefore even though their equip is not as good as ASND's, they can drop prices on a small portion of their product line to try to drive ASND out of business without a large impact on their own margins. IMHO ASND will eventually need to partner with someone with bigger pockets who competes with CSCO across its entire line, so when CSCO tries to start a price war in RAS, big brother can respond by slashing prices on its routers. A co. like LU that doesn't depend on networking equip. for its revenues could really put a whipping on CSCO. I'm sure ASND would be happy to be used as the paddle. Regards, Lee

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