Well, somebody has to tell the truth, so it might as well be...me. UNPH started going down in sympathy with other telco stocks when ADCT cracked. If you think back to posts I've made months and months ago, people were bringing up Harmonic Lightwaves, Galileo Corp (GAEO) and a couple of other companies always being jumpy that they were about to blow UNPH off the map. Well, what has happened? GAEO continues to drift, HLIT stumbles, and on the fundamentals, UNPH just continues execute their business plan. Lucent made a splashy product announcement today that knocked Ciena on its butt for an hour today, and no doubt, word leaked out yesterday the the announcement was coming. excuse my spelling here, but the Ciena product used UNPH lithium niobate modulators wheras the Lucent product uses internally produced modulators based on a different technology. UNPH stock got hit because people jumped to the conclusion that Lucent's new product would obliterate Ciena and therefore, the customer that accounts for 13% of UNPH's revenue in FY '99 will disappear. Is this true. No. Today, at the Montgomery conference, Ciena presented and discussed the impact. Does any sane person believe that Ciena's engineers have been at Club Med, Turqoise for the past 9 months drinking pina coladas? Fact is, ATT would be ill-advised to have one supplier, and will therefore keep Ciena as a suppler, but also use Lucent. Important to note are what are believed by most photonics engineers to be the limitations of Lucent's modulator technology vs. lithium niobate modulators. As the need for bandwith increases with time, most of the Nobel Prize winning physicists that I play bridge with tell me that the next generation (after Lucent's big spash today)devices will actually require a switch to the more advanced UNPH modulators. Keep in mind that modulator demand incerases as # channels in wave division multiplexing systems increases. In a curious sense, the faster the pace of innovation in this area, the quicker the need for lithium niobate modulators will grow, since that will quicken the end of the era of electroabsorption based modulators. So, if you think through the situation, it may become apparant that the stock actually has gone down...on potentially good news. Holders may also want to consider that optoelectronics is growing so fast, that to focus on this one particular application of the enabling macrotechnology called photonics is rather short-sighted. UNPH has made some very intelligent acquisitions, taking a long range viewpoint, which is correct in my estimation, that optoelectronics will become pervasive in a magnitude to where 7-10 years from now, people will ask, "what's UWDM"? This should be possible as additional areas for the application of photonics emerge from the lab and enter the everyday marketplace. IBM thinks copper based microprocessors are going to be fast? end of story
humbly your truth seeking sage,
David S. |
