Pat,
While Vertical Systems indeed published its report recently (my copy says September 30), the data used to determine market shares is CY1997 full year data. 1998 is only a projection. Dell'oro and Cahners INStat publish each quarter, about 3-4 weeks after Cisco announces. As such, the latest from these companies, published in August, is 6 months more current than Vertical Systems. IDC is further behind than Vertical System and is of little use.
In talking to all of these market research organizations, one thing is clear, NN makes it very difficult to get an accurate count, consistently over-reporting product sales to the market researches vs. the #s shown in official earnings releases. This is not unusual - Cisco is probably the worst culprit. (If you add up the product by product sales reported by DataQuest for Cisco, you get a revenue number 114% of actual reported revenues). NN includes Mainstreet 3600 chassies with frame relay cards in its frame relay switch revenues - so be it.
Generally, the industry considers Dell'oro's numbers to be the most accurate because she does the most digging to make sure there is no double counting, incorrectly categorized sales, etc.. Having worked closely with all of these vendors I would have to concur. In any case, its better than taking any of the vendors word for it.
As far as the 7 of 7 I cited, many of the contracts you list are incumbent relationships where NN has gained an advantage through a history of service and through the switching costs of changing network management systems. This does not mean that they are not attractive contracts, just that they were not won in a technical bake off. In particular, the SBC and C&W contracts will be quite large over time I suspect.
I also believe that the roster of clients Ascend has signed over the past year will deliver faster growth than those that NN has retained. But while I see Ascend as the best play in carrier ATM, NN is a clear number 2 with an attractive base of customers. Cisco is a distant #3.
LMDS. I guess I am somewhat guilty of skepticism about the near-term market opportunity in LMDS and have discounted it somewhat. While licence holders will begin deployment, the total $ spent will depend on these new carriers finding a large market, and I am not so sure. NN and Cisco have made much stronger moves toward this market than Ascend. If you see this as adding significant revenues over the next 18 months then NN would certainly look more attractive.
DWDM. Ascend was in fact the first to announce direct connectivity to DWDM and is now interoperable with Lucent, Ciena, Pirelli, NEC and Nortel, which together control over 95% of the market. Where NN comes out ahead is its interconnectivity with its own affiliate Cambrian, but metro area DWDM while an enormous opportunity, is a year away from major deployments. Ascend has long-haul DWDM connectivity working at Qwest, Frontier and Williams.
I agree with you completely that this market will be large enough for both Ascend and NN to prosper. Good luck. |
