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Technology Stocks : Westell WSTL -- Ignore unavailable to you. Want to Upgrade?

To: steve s who wrote (16860)	8/16/1999 12:52:00 AM
From: Trey McAtee	Read Replies (1) \| Respond to of 21342

steve-- we went through this when CPQ started rolling out the units with the built in LU chipset. its a huge threat to WSTLs LT modem business, however in the short term it is probably meaningless. however, it does dramatically alter WSTLs ability to make any money off modems. let me explain... new PCs are incorporating the modems from the factory. in some cases (mostly for cost reasons) the chipset is being incorporated into the mainboard. now, WSTL could link up with an OEM, but the margins are going to be lousy and WSTL would be in direct competition with TXN. where TXN can sell the chips ready to solder in, WSTL would have to buy the chips, put them on a card and ship to the OEMs. well played, TXN. so that leaves WSTL with the current market, PCs that are out there now. here is the problem, within 1-2 years a large number of those PC are going to be replaced... with new ones that have the modems built in. see the problem? good luck to all, trey