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Technology Stocks : Efficient Networks Inc - (Nasdaq- EFNT) -- Ignore unavailable to you. Want to Upgrade?

To: neverenough who wrote (245)	8/11/1999 11:01:00 AM
From: Brasco One	Read Replies (2) \| Respond to of 675

<!> because it looks bad.<!> you need help.

To: neverenough who wrote (245)	8/11/1999 1:05:00 PM
From: John Manecke	Read Replies (3) \| Respond to of 675

How about some detailed analysis? Some clarifications and hopefully some valuable questions: EFNT as box maker: they are a "box maker" - their product is referred to in the industry as a box. It has goes-into's and goes-out-of's. A DSL line goes in, and Ethernet connection goes out. What happens in between is a "black box" like many other pieces of network equipment. Check out the Black Box Online (http://www.blackbox.com) if you still don't understand the term. Why is this significant? EFNT is primarily a hardware play. They just make and sell boxes. Their revenue growth depends on growing demand for their boxes. This means they are tied to those rolling out DSL services, which is why partnerships are so important. Just like Intel's revenue goes down when PC sales are down, EFNT will do bad if DSL installations slow. The reason I hold EFNT is I am convinced the rate of DSL installs will continue to grow. As such, provided EFNT has partnerships with companies generating those DSL installations, their revenues will grow accordingly. As for looks: I have a Speadstream 5250 sitting right next to me. Aesthetically, it looks fine. A little stylized for a piece of network equipment, but since it's targeted for home use, no problem. I believe the post referred to "looks" of the internals. I haven't popped mine open to check it out, but plan to after all this. I assume major DSL providers did their own engineering analysis of the internals before they selected EFNT to provide their equipment. DSL partners and hardware compatibility: since the DSL modem must work with the DSL switch at the telco central office, customers aren't choosing their DSL modem, it is selected by their LEC (Bell Atlantic, US West, Covad, Northpoint, etc.). The LEC selects a modem primarily because it works with their switch and is easy to deploy. EFNT's products work with many of the major switches. They are also very easy to deploy. The Speadstream 5250 has 3 plugs: power, DSL, and Ethernet. There is no configuration required during the install. These facts make it easy for LEC's to select EFNT's products. As stated earlier, a red flag would go up if carriers started moving away from EFNT to competitor's products or selected competing products outright. At present that doesn't appear to be the case. Here are pieces of information on EFNT I'm looking for and using to make decisions: - list of LEC's that deploy EFNT products to their DSL customers and rate of subscriber growth for these carriers. This directly drives demand for EFNT modems. - details of EFTN's distribution relationships with carriers. Do carriers commit to a certain number of modems, are modems ordered by carriers as needed, etc. This will indicate how changes in DSL subscriber growth impact EFNT. - DSL switch providers whose products work with EFNT modems. The installed base for each of these providers and projected growth. This indicates future demand for EFNT modems. Large roll outs of switches that don't work with EFNT modems is definitely a red flag. - EFNT's ability to meet growing demand for modems from suppliers. If installations are held up because EFNT can't deliver modems, that would cause LEC's to seek additional sources of modems. I don't have much of the information listed above, but that's where I plan to focus my research. If anyone can contribute details I know I would appreciate it. Of course I also welcome "looks bad" and "POS" comments, but I just don't get that much value from them. John Disclosre: I own shares of EFNT, bought at 35, plan to hold long term and may buy more in the future.