With a little margin improvement, we could see an upside "surprise." What does everybody think?
I remember Michael Lehman, in the October concall, repeatedly hit on THIS reporting quarter being the quarter that analysts should focus on. If ever SUNW has needed to "surprise", this would be it.
I think that domestic margins are likely higher, if for no other reason than growth in services. There wasn't any significant price cutting this quarter, except for the midline, which has been trending lower for a long time. The impression is that low line and high end are both at capacity. It was notable on the low end that Sun upgraded the Ultra IIi models and didn't lower the price of existing machines a nickel. That would indicate that business is as good there as it is on the Ultra Enterprise side. This quarter should reflect the rather big push into the ISP market, and we should see notable storage revenue growth, I'd think.
I think too that 20%+ is going to particularly stand out this quarter, and highlight all the more, the great relative investment quality of SUNW, against widespread anemia elsewhere.
In any case, there should be a great forward story with Jini and Net Dynamics. I'm curious if they'll continue to suppress the AOL/Netscrape plans until M$ v. * has a ruling. Certainly there's a big giant crate of a business plan there.
-JCJ
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