Aware, Inc. - Hot or cold IPO? Message Board

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Technology Stocks : Aware, Inc. - Hot or cold IPO?

AWRE 2.160

-1.4%

Nov 28 9:30 AM EST

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To: Norman Klein who wrote (4280)	9/29/1998 10:52:00 AM
From: Bill	Read Replies (2) of 9236

Norman, thanks for your thoughtful response. I'll take another look at my market figures and penetration estimates for AWRE technology based on your belief that I'm underestimating. Two things pop out of this mornings' posts. One, that ADSL will roll out in Europe simultaneous with US deployment. And two, that ADSL will be used for business. I don't believe either will happen in a meaningful way. Europe is far behind the US in both business and household Internet penetration. The infrastructure is not built out yet. Rolling out ADSL to a mass market would surely overload the data backbones in most countries there because users would be elevated to higher bit rates from the existing 14.4 dial or 128 ISDN services they currently use. It would also cannibalize existing service rate structures resulting in lower revenue for service providers. US businesses have been buying HDSL-based T1 service for years with Pairgain and Adtran the leading suppliers. The RBOCs are not and will not IMO cannibalize this base in order to bring a low cost service like ADSL access to business users. In fact, the only suppliers of ADSL to business that I know of are CLECs like Northpoint and Covad who are trying desperately to co-locate CO with RBOCs. Still, I think businesses will gravitate toward 2B1Q encoding to reduce the incidence of spectrum interference and to gain symmetry for their web server applications. This means SDSL is likely the major business technology, not AWRE's DMT. This does not mean the home office won't connect with ADSL, but those figures are already included in my prior analysis. That said, AWRE could be an interesting stock to trade, long or short. Both you and Scrapps have built in an acquisition factor to your valuation model for it, which I believe is very risky. Anyway, I'll look over my market stats today to see if I've erred on the negative. Good luck. Bill Vaughn

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