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Technology Stocks : COM21 (CMTO)

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To: Charlie Smith who wrote (423)	5/25/1999 12:11:00 PM
From: pat mudge	Read Replies (1) of 2347

Charlie -- Help me understand the pricing pressure issue. As I see it, 1) pressures are only on DOCSIS products, 2) CMTO's sales are 98% non-DOCSIS 3) pressures were laid out in the 10Q several weeks ago and therefore not new information and 4) gross margins on these DOCSIS products are estimated to be in the 1% area. In other words, the company may see gross margins slip 1% in the area representing 2% of their total business. In the certification arena, at the recent annual meeting, CMTO's VP in charge of DOCSIS told me they've fixed all issues that kept them from passing last time. So I don't see how this could be an issue. Especially considering the fact they're already shipping "DOCSIS compatible" products. As you can see, I'm trying to figure out the rationale of the market. If it's the FCC discussions with AOL, et al, then we should see some abatement when they end today. Welcome your counter-points. Pat

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