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Technology Stocks : Harmonic Lightwaves (HLIT) -- Ignore unavailable to you. Want to Upgrade?

To: gdichaz who wrote (2827)	6/25/1999 11:39:00 AM
From: Eric Jacobson	Read Replies (1) \| Respond to of 4134

Chaz, for the best explanation, go to Harmonic's webpage at harmonicinc.com and click on What's New and take a look at the May 25 press release. Here's a clip: >By allowing up to eight separate blocks of return information on a single fiber, DWDM dramatically increases the bandwidth capability of the return path. This bandwidth will allow operators to provide Internet access, video-on-demand and other two-way services. Additionally, network architectures that use DWDM return directly from the node can be more cost-effective than many architectures used today.< Here's how I understand it works. Basically, a cableco can install a Powerblazer node to serve, say, 500 homes. This node provides the basic 2-way services, as well as DWDM on the downstream path. As usage increases on the downstream end, not only does DWDM increase the system capacity, but also the cableco can easily subdivide the Powerblazer node to serve 250 homes. Eventually, this is expected to go down to 125 or even as few as 50 homes. So the downstream path is basically covered. Currently, very few demands are placed on the return path. In fact, a couple of years ago some system upgrades went without even upgrading the return path. Instead, the return path went through the telephone lines. That was bad for HLIT and the stock went below $10. Now, the thinking has changed. Basically, people like Mike Armstrong realize truly 2-way interactive services like video conferencing will place a strain on the return path. So now HLIT has come up with a way to dramatically increase the capacity of the return path by placing DWDM at the node. Plus, it's a modular design so it can just be plugged into the Powerblazer node whenever the cableco decides it wants/needs the upgrade. So even if a cableco doesn't want/need DWDM at the node today, they are more likely to install HLIT's Powerblazer node today rather than another manufacturer's node if they think they may want the flexibility to add DWDM at a later date. I guess for some time it was difficult to get DWDM to work at the node due to temperature problems. So the magic HLIT is working is not only that they've figured out a way to get DWDM to work at the node, but that they can leverage this advancement to increase the attractiveness of the basic node itself since the DWDM component is a modular, plug in design.