Sal,
<<The modem business will grow more commoditized>>
This has already been happening. Fortunately, inspite of increased competition and decreasing prices USRX has been able to increase margins and earnings. Earnings have increased for several reasons. First, although there has been pricing pressure on consumer modems, USRX has INCREASED market share, therefore largely mitigating the decrease in ASP. Second, consumer modems are becoming less of factor for USRX each quarter. The product mix continues to shift towards higher end products. As you point out, of course, these too have competition but USRX has already demonstrated that it can compete here very well also.
USRX is a leading edge technology company as evidenced by X2, most recently. As older technology beomes a commodity they announce new products. Everyone who follows the memory industry acknowledges that MU is a trailing edge technology company that has always lags behind the Koreans. When you are always playing catchup or cleanup you can't expect to have any control over pricing unless there is a worldwide shortage like there was in 1995.
If reference to your other request, please check you e-mail.
FF |
