Hugh
It's obvious that the "big
boys" with the exception of LU and CSCO (perhaps BAY) are having tremendous
difficulties executing. NN is such a loser, I wonder how long they'll be in business.
I appreciate your opinion. Just a couple of quick points. ASND (sahara) has had bigger fish to fry (CSCC). 3Com (Onstream), hey 3Com is just getting traction now....the Totalcontrol product line looks very good and they're doing a good job marketing it. Cisco on the other hand is just entering the market - so I'm puzzled that you believe Cisco is doing well in the ATM CPE space. NN and FORE...we agree, but unlike FORE I wouldn't underestimate NN's desire to get back on track. Mathews is a very aggressive individual. AND, don't forget about NT...
"YURI is priced out of market." I know you didn't think highly of Mr. Stix's
report, but he did cite that ADCT had tried to aggressively price their product to
capture market share, and failed. They have since backed off this strategy.
We did a quick but fairly thourogh evaluation of the products and price points in the ATM CPE market. YURI (at list price) is about 3 x the price of 3Com, ADC, and ASND...even more expensive than NT's Passport 30 - a true ATM switch!!! As for Cisco's first foray into ATM CPE - the 3810, it's priced at about 1/6th of a YURI platform albeit with fewer features. Question is, will YURI react to pricing erosion in this market or not. You're not saying that there will be no pricing erosion, are you? BTW: ADC product is so old it's not a surprise that they had problems maintaining their position. However, they just announced their second generation products.... hmmmmmmm
"No direct sales strategy (margin issue?)."
YURI needs to decide whether they will sell predominantly direct and build this model out or through OEM's. They appear to be taking the OEM approach. For OEM's to compete they'll need deeper discounts than YURI would typically offer end users. This will effect margins. The larger percentage of sales through OEMs, the slimmer the margins. Is this difficult to understand?
"LU is OEMing a number of access products - not just YURI's." I think you're
dead wrong on this one.
Nope, check into it. They've got Nuera, NT, and Cisco equipment. Perhaps other equipment as well.
"Splitrock. seems like a shell game to provide more comfort to investors." We've
all heard you say this ad infinitum. You have gone out of your way, including
distorting numbers Hey dude!... watch it!... This was an honest mistake I made once and admited to. Don't be a jerk. At least I admit it when I make a mistake...unlike some , to hammer this issue. Shipments from YURI to BAY and
ERICY that are destined to Splitrock are counted as Splitrock sales. YURI is
hiding nothing. I suggest you ask YURI directly about this issue, because your
suggestion of fraud is speculative and doesn't appear to be researched.
Yes indeedy... you folks like to talk about SpliltRock, so I continue to be pulled into it. Now, you really believe that YURI's OEM's report to YURI what percentage of products they've sold are going to SplitRock do you. Don't make me laugh.... I suggest you take a business 101 class - not telling where sales are going is not fraud. Oh, yeah, call YURI...they'll tell you who all their customers are and what percentage of sales go to each one... Don't be so naive. As was mentioned by a long on this thread weeks ago, YURI is in this game for the money. The money comes from investors and increased stock valuation. Having a large percentage of sales going to one customer helps to hold down this valuation. They will "hide" what they legally can. Up to now they have had to protect their interests by informing investors that sales are heavily weighted to one account. This is material. Spreading the sales to this one account to several OEM's is a way to avoid this issue. OEM's don't have to tell YURI where sales are going and YURI can end the practice of reporting sales for this one end user. This will definitely help valuations.
HUGH, as for my being long... I am, but I try to look at all the issues both bad and good. YURI has a good franchise which they could do some great things with. Question is, will they execute given the market. My comments are intended to suggest that they currently are not. Given the status quo they'll have another couple of good quarters then that'll be it..unless they make some changes now...changes which I've also mentioned too many times. The other alternative is to sell the company before end of 98 because by this time next year the valuation will be below 20 - agian assuming they continue on the current path.
Good luck!
Gary |
