ELIF@EZCHIP.COM
Joined: 30 Nov 2015
Posts: 2
|  Posted: Wed Dec 02, 2015 10:15 am Post subject: |  | | To the question of what happened? why I now see things differently?
My view is always a mix of looking at both the up and down sides.
It is true that various analyses are posting on this board, they mostly take the upside and ignore the downside.
I would like to provide you with two examples:
Sep 2000, George Gilder in the Gilder Technology report said:
"EZchip will reduce the router to a chip and put it everywhere" and predicted later that "EZchip is the next Intel".
Sep 2001, analyst Eric Mantion in an IN-STAT report said:
"Faster Than a Speeding Packet: Network Processors hit $7B in 2005".
15 years later George was partially right:
EZchip did reduce the router to a chip and put it everywhere.
And EZchip is as dominant in NPUs as Intel is in CPUs, but the NPU market unfortunately is very small.
But Eric Mantion was completely wrong:
The NPU market did not hit $7B in 2005, it only hit 5% of the forecast and with a 10 years delay, ~$350M in 2015.
In early 2012 I said, based on Infonetics report, that it is possible to quadruple revenues in the coming years due to growth in routing ports, EZchip's market share and increase in ASP.
Based on that ,in his next inning report from Feb 2012, Paul McWilliams increased his previous $250M revenue forecast for 2015 to $300M and said:
"The important point here is that it now appears there is reason to believe there is an upside to my $250M forecast for 2015"
It did not happen, routing ports did not grow as Infonetics forecasted, we lost Huawei so EZchip's market share did not increase, ASP increased as planned.
My point in the two examples above is that in every situation there is a risk/reward balance and while analysts tend to look at the reward, my responsibility is to look at both and make decisions based on both. When a huge decision, such as selling the company, is coming to a vote and I see many of you ignoring the risks, I feel that it is my duty to highlight the risks to you since a lot of your money is involved. And I am not downplaying NPS, It is an outstanding chip, but I simply understand the market, the customers and the risks better than anyone. |
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