Hi Steve:
There are two components to P-MP products: the hardware
(transmitters and receivers) and the wireless networking
software. I see P-Com as the leader in the first area,
while Hughes has extensive experience on the software
side.
We are getting soon to the point where I will need to make
a decision on P-Com. I expect that they will be reporting
an ugly loss this quarter, and the time to jump in would
be just after that. Going forward, I see 2 or 3 more
bad quarters, as PCMS and DMIC undercut one another
in the P-P market. Thanks to its acquisition of INVA,
DMIC has actually cheaper P-P products right now.
However, DMIC decided to punt on P-MP, and I expect
that this will cost them a lot in the long run. In
fact, I would not be terribly surprised if DMIC goes under
in 2 or 3 years. However, P-Com will need to withstand
a very nasty period until P-MP demand takes off.
Presumably, if P-Com runs into trouble, it will make a very
attractive acquisition candidate, just for its P-MP
products.
So, I will probably make a small bet on P-Com this week, but
I would advise caution. There are many cheap tech stocks
right now, so with a rather uncertain economy next year, the
best strategy is probably to be very diversified, just
in case some companies do not make it.
Best regards,
Bernard Levy |
