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

To: JohnG who wrote (11096)	11/24/1999 4:21:00 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 54805

John, Merlin's been trying to post this, but his computer hasn't been cooperating. On behalf of the world's craftiest carpetologist: >>>>>>>>>>> JohnG, Happy Thanksgiving to you and all the Gang. I'll be outta here eating turkey (a two-legged variant of animals we don't normally discuss here) in Chatanooga. Won't be back until Saturday nite. Thanks for all the help w/ CREE, CTXS and GMST. I'm still begging unclewest for patience, not having read anything about CREE. You probably owe him the thanks for that. Is LUMM a threat to JDSU, the component king? Dunno enough about either to have an informed opinion. Catch me in the right mood though and I'll be happy to give you my uninformed opinion. :) Happy Thanksgiving, all! --Mike Buckley

To: JohnG who wrote (11096)	11/24/1999 5:18:00 PM
From: Whistler30	Respond to of 54805

JohnG; No one really knows the answer to this question. Over the last several weeks sentiment regarding LUMM seems to have evolved from outright scepticism to cautious concern. Meanwhile the stock has appreciated dramatically to where it now has a market cap of 600 million and no prospect of earnings for probably two years - many seem to believe it is too good to believe and ready for a Bre-X style fall. And yet the prospect of DWDM on a chip is intriguing enough to keep me (as a JDSU investor) closely watching the potential competition. Here's a take on LUMM from one of the best informed JDSU posters I know of (from the Motley Fool Boards): Stocksure, I think that the big thing LUMM has going for it (provided it's claims are true) are capacity and consistency in building. If a machine can make them then it is simply a matter or running the machine longer/faster or getting more machines. If the process is labour intensive then to boost capacity you must hire more people, then train them. If the purchase of OCLI goes ahead then JDSU will have internal DWDM filters. (I believe that the filter is the expensive part but I'm hardly an expert.) As the $15k for a DWDM, that seems rather steep. How many channels? What spacing? Standard or hermetic package? I'm being difficult but you might as well make sure you're comparing apples to apples (as opposed to comparing an apple to an orchard). One big item going against LUMM is that the customer would probably prefer to buy a finished module, regardless of the cost. Why? Consider Nortel. From every indication I've seen they are quite happy to avoid hardware completely and stick to programming. Cisco is not that different. Why again? Software is easy to duplicate and it costs almost nothing to make if you have the expertise at your disposal. So... why make hardware? You need to make the hardware so that the software will have something to run on. LUMM may have a neat idea, and maybe it works. Personally, I'll keep my money elsewhere. Tall Fool Victor Whistler