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

To: mauser96 who wrote (11648)	12/1/1999 11:04:00 AM
From: Uncle Frank	Read Replies (1) \| Respond to of 54805

Good morning, LL. One of our other untyped candidates is ntap, of recent Gilder Report fame. SSB just released a report on their prospects that the thread may find of interest. At the very least, I know Galahad will <g>: Message 12152781

To: mauser96 who wrote (11648)	12/1/1999 12:15:00 PM
From: Tom Ardnij	Read Replies (3) \| Respond to of 54805

Hi Lucius, Thanks for your post. I share your feelings about a very high hurdle rate for us to describe a company as a gorilla. That's why we have formated a stringent means of presenting a case before agreeing that a company is a gorilla. No one has presented the case on JDSU and I'm not prepared to do so yet. My concern, however is not the customer set. Rather, I'm having difficulty with barriers to entry. I'm currently researching that. I've gone back and reread my posts. I've used phrases including "simian like", simian genes, and "simian DNA" to describe how I feel about JDSU. In your post, you have actually hit on exactly why I feel that way. You said, >Intel succeeded because nobody initially knew it would be a huge market,it was there first, competitors were inept, and (most importantly), they were able to establish a brand." < Actually, what they really achieved by putting their microprossor in IBM compatible PC's was to gain a lock on the enabling technology for a new and exploding market. They indeed were not the only ones to do so. A small software company that had recently located in Seattle negotiated an agreement to provide the operating system for that same PC. This was a second enabling technology for an exploding market. Cisco of course established it's IOS as a standard enabling technology for routers. Other technology companies wrote to that standard and a new simian was born. More recently QCOM completed the lock on the enabling technology for CDMA and future wireless. They will shed their consumer products and only produce the enabling technologies. Like microcomputers, networking, and wireless; optical fiber is becoming a core building block of the information age. When I look at where the enabling technology lies, I don't look to the fiber manufacturers or those who lay the cable. It appears to me that the key enabling technology for DWDM lies with the active and passive optical components that make the process possible. In this regard both Lucent and Nortel are deferring to JDSU and their expertise to provide the enabling technology. JDSU is now twice as large a producer of these technologies as the sum total of their competitors. They are buying up value chain partners in Cisco fashion. The similarity of Nortel and Lucent to IBM in 1983 is not an accident. The trend towards modularity in the value chain that I described last night is very real. It's the only way to achieve the "time to market" required, as well as the customized solutions expected of the Nortels and Lucents. Its this enabling technology that causes me to use phrases including "simian like", "simian genes", and "simian DNA". As to whether such enabling technology is a royalty game or a gorilla game, I believe that it is indeed a classic gorilla game in much the same way that Intel, MSFT, CSCO, and QCOM games evolved. In any case, I am still researching all the building blocks. Thread, please share your comments with me. If I am completely off target, I'd appreciate your thoughts. Best Regards, Tom