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Technology Stocks : Ciena (CIEN)
CIEN 188.78+1.0%4:00 PM EST
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To: Gary Korn who wrote (1780)3/22/1998 11:59:00 AM
From: Sam Citron  Read Replies (1) of 12623
 
Gary,

Yes, it is strange that is how it was phrased. But I think that Avalon's point was that a 16-fold ramp-up in supply may be a bit much to digest all at once. Supply does create its own demand in this business, but not until appropriate adjustments are made through the pricing mechanism. Since telecom is both an oligolopy and a very regulated business, these adjustments can take time. Until cable modems achieve much higher penetration rates and the net is filled with multimedia "sticky bites", I don't see the need for such huge capacity in the near term (5.9 cent per minute long distance telephone charges notwithstanding). It all comes down to the "last mile" bottleneck. Yes, DWDM sure beats the cost of installing new fiber. It is powerful stuff. But how much do we really need NOW? And with the integrated operations of Lucent and their Bell Labs research powerhouse, how is Ciena positioned to compete in the future?

SC
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