Mike -
I'm not sure that one needs to select between xDSL stocks and cable
modem stocks, IMHO both will be successful in the marketplace because
neither industry (telco/cable) will cede the market to the other.
There are practical obstructions (not barriers) to the deployment of
both technologies, but these will be solved because of the $$ to be
made. Cable modems are currently ahead in deployment, but large
penetration will be limited by time and money required for plant
upgrades. There are a number of good xDSL stock plays with companies
with relatively small market caps that have large upside potential,
but there are not these types of plays in the cable modem world at the
current time, as far as I know. Most of the cable modem vendors are
either large companies (General Instrument, Scientific-Atlanta, Intel,
Hewlett-Packard, Zenith, Motorola, Bay Networks) or are privately
held (Hybrid Networks, COM21, Terayon).
In response to your later post, I share many of your concerns about
Amati's ability to command a large market cap in the future. They are
extremely well positioned, however, and it appears that they are in
control of their own destiny. It is up to them to continue to execute.
I agree that they have to sell end user or OEM equipment in order to
achieve much revenue, licensing fees just ain't gonna cut it. Do you,
or anyone else (Pat? Jim?) know about Amati's strategy for becoming
a high volume manufacturer? They could easily be swamped by USRX, MOT,
Hayes, ZOOM, etc... if they can't make the transition from system
engineering and development to efficient manufacturing.
Rob |
