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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: StockHawk who wrote (8984)	10/27/1999 4:40:00 PM
From: RoseCampion	Read Replies (2) \| Respond to of 54805

Rose, I have no doubt that Chiron makes a good machine - it is popular in Columbia where much pioneering Lasik work was done, StockHawk, I was not thinking of little Columbia, but Canada, Europe, and Asia, which are far bigger markets. but I haven't seen anything that would lead me to think doctors will change to Chiron. Many have invested in VISX machinery and training and switching cost are high (these machines cost half a mil) I'm not saying that docs who've made a big investment in VISX equipment are going to dump it and get something else, even if it's better or even if it's cheaper. I _do_ say that in GG terms, the mere fact that a clinic invests in an expensive laser and some training does not come _close_ to giving VISX a lock on some sort of nascent vision correction "standard". Expensive machinery != gorilla status. The cost of "switching" to another brand of equipment, or to choosing another laser as a additional piece of gear when a VISX is already in house, is actually minimal - compare this to what we _really_ mean by "high cost of switching" when we talk about something like a wireless operator with an entire CDMA build-out (base stations, towers, and every single subscriber's phone) switching to some other RF technology. Or a software developer rewriting all his code to work on something other than a Windows/x86 architecture. _That's_ high cost of switching. Again, speaking from a GG perspective, VISX is at most a King with a host of strong princes (Summit, Nidek, B&L) nipping at its heels. And some _extremely_ disruptive innovations (KERA's Intacs, intercorneal lenses, corneaoplasty) that are potentially cheaper, safer, and more predictable, starting to rear their heads. (You think a 20/20 hatchet job on cellphones frying user's brains is bad for business? Wait until the sensationalist media start running lots of "LASIK horror stories" pieces with tearful interviews full of folk with really messed-up eyes after botched surgery. I'm not saying those cases are representative [they aren't] or that the coverage will be fair and accurate - but I am betting dollars to doughnuts that we'll see a bunch of those stories in the six months, if they haven't started already.) As for the royalty issue, if you have credible sources that dispute the reality of the royalty , please post it here and prove Forbes, wrong. I will look for sources. In the meantime, I would present what is to me highly convincing anecdotal evidence: in Vancouver, Canada, just north of me in Seattle, the going price for LASIK at any number of clinics is $999US, all-inclusive. That's the price for both eyes. The clinics there are using both Nidek and Chiron gear. There's no way they could be doing the procedures for that price, paying half of it to VISX, and still be making a profit. I have to presume that none of these clinics (and anyone else performing LASIK in Canada) is paying the $250/eye "Pillar Point" fee to VISX. Again, it's important to note that I'm looking at the world-wide picture here, not the legal situation in the US alone, which is not necessarily typical or applicable in other countries. -Rose- PS: I do not have, nor have I ever had, _any_ position in _any_ vision-correction-related stock - I merely have a professional and personal interest in the field as a whole.