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To: cfoe who wrote (60429)	1/6/2000 10:12:00 PM
From: justin55	Read Replies (2) \| Respond to of 152472

According to today's press release, the earnings shortfall was due to "Lucent's inability to keep up with demand for wave division multiplexing products, which expand the capacity of fiber optic networks, and demand for fiber optics and optical networking equipment. Some customers also decided to wait for Lucent to churn out more powerful optical network equipment instead of buying current products that are quickly becoming obsolete. These more sophisticated products required more manufacturing time, capacity and staff training, which some sales. Lucent plans to make ``significant investments' to expand its manufacturing capacity, technical resources and staff, McGinn said. If I understand correctly, one can conclude: 1) market demand for optical networking equipment remains intact; LU just couldn't meet demand. 2) LU is upgrading to next-gen products (i.e., includes wireless network equipment), and got stuck with obsolete inventory in the transition. = eroding market share problem. shouldn' affect market fundamentals (as chairman graciously conceded).