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

To: Mike Buckley who wrote (17474)	2/8/2000 1:25:00 AM
From: Ruffian	Respond to of 54805

Siebel Systems Manages Sales Business Summary: (Courtesy Of CBS Marketwatch/Ask Research) Siebel Systems, Inc designs, develops, markets and supports enterprise-class sales, marketing and customer service information software systems. For the 9 months ended 9/30/99, revenues rose 84% to $493.8M. Net income rose from $23M to $77.2M. Revenues reflect an increase in the number of licenses of Siebel applications sold to new and existing customers. Earnings also reflect a higher gross profit and the absence of $13.5M merger related cost. *Earnings Announcement: For the 3 months ended 12/31/1999, revenues were 267,985; after tax earnings were 44,987. (Thousands) Commentary: Even the Federal Reserve will grudgingly admit that productivity has changed the business landscape, allowing fewer people to do more work. The combination of the Internet and automation software, are key parts of the new paradigm. In the current business climate, anything that can increase productivity by using the Internet is likely to do well. But Siebel Systems' software applications seem to have just about all a business needs to keep track of e-business. The company just announced a partnership with i2 Technologies (NNM:ITWO), which will complement Siebel's already dominant position in e-business. According to the company's press release, "customer information that is captured in Siebel e-Business Applications in the field, in call centers, through resellers, or over the Web can be used to drive i2's intelligent personalization and fulfillment solutions. The integration of i2's Internet Fulfillment Server with Siebel e-Business Applications should provide the capabilities to help businesses with consistent and reliable order fulfillment over the Internet. " Shares of SEBL broke out to new highs on the news, while i2 shares rose 16% on the news. Trading Ideas

To: Mike Buckley who wrote (17474)	2/8/2000 9:21:00 AM
From: slacker711	Read Replies (1) \| Respond to of 54805

Evidence of the tornado....CDG posted their breakdown of CDMA sub growth for the fourth quarter. cdg.org Slacker

To: Mike Buckley who wrote (17474)	2/8/2000 10:12:00 AM
From: FLSTF97	Read Replies (2) \| Respond to of 54805

RE Cree Creeping Chasm Crossing (now that's a pure alliteration!) Mike I wish to offer some of my thoughts on this subject and some of your comments. The question to answer might be, "Which niche market is the head pin and has the product penetrated that niche?" An answer of "Yes" implies that the chasm has been crossed. An answer of "No" implies that it hasn't happened yet. I think we can assume that LEDs are the head pin and they are clearly selling them into that market segment. But I also think that Cree needs to more than penetrate that market: they must obtain a commanding presence in this market. In other words they need to become at least the king in this area for us(well me anyway)to feel that the chasm crossing is secure. Although Cree claims that they are the leading supplier, I've to date not found corroborating independent confirmation of that. Clearly Nichia, Vishay, Agilent, and Infineon also sell blue leds. Uniroyal thinks they will be selling them soon also. Excepting the latter, these firms are much larger than CREE with more resources. Cree is still securing the beach head, albeit they apparently have a better arsenal at their disposal. I'm not convinced that this battle is a forgone conclusion; however,it may well be by the end of the year if CREE's new volume gives them superior pricing power. 100% Solution I think that we can assume that all car manufacturers and cell phone manufacturers demand a complete product and aren't going to risk a recall on something like a light source. Furthermore the qualification procedures for vehicles are unbelievably stringent since the environment is so harsh. If the LED's weren't "ready for prime time" they would not have been adopted on a widely distributed vehicle like VW. Even though I'm not ready to claim that CREE is securely across the chasm (unclewest sorta like that RAMBUS thing, but better in CREE's case) it may be interesting to discuss what constitutes a tornado.{Remember true GG is buying a basket of the enablers as the tornado begins: this isn't software its semiconductors). First let's assume we don't care about a substrate(SiC wafer) tornado. Why? Because that will only spawn a local tornado in a vertical market. The substrate itself does not constitute the whole solution for any of the interesting applications. It is a whole solution only for those fabs (or C3) looking for a specific kind of raw material. One of the key concepts in the bowling alley is that you get to knock down other pins because the buyers can access references to your success in another niche.In other words the ability of customers to reference one another sets the boundary of the market expanse (this is more fully defined in Crossing the Chasm for those interested). So a logical progression is from Blue Leds to Lasing Blue Leds, right? Wrong! The folks at Philips, Plextor or other CD storage device manufacturers could care less about the backlighting on a car. This pin is far removed from the head pin. Indeed I see it as a head pin itself for another frame (that is market segment: data storage/ transmission) The more logical adjacent pins would constitute other backlighting applications (eg.cell phones, games, pda)or other applications in the auto industry. The cell phone (Nokia and Panasonic) and game(Sony) pins seem to be dropping. If I see that they are successful in having a power transistor (a completely different whole solution enabled by the same technology) adopted for an automotive application, then I'm ready to declare a spare and fire up the tornado siren. On Page 151 RFM, It states that continuity at the customer end of the value chain plus discontinuity on the supplier's end of the value chain creates the Tornado. This set of conditions exists (even though it likely has not crossed the chasm.) The car still looks like a car except the owner doesn't have to spend hours pulling the dashboard apart to replace an 12 cent bulb as often. The cell phone still works, but it now makes a fashion statement with it's cool backlighting. So if the beach head is secured, the conditions for spawning a tornado exist. On page 152 they list the test questions of the value chain to judge the likelihood of tornado formation. If we can take as a given that an opportunity exist for a mass market, I'll address the other questions referencing only the devices. The value chain questions are: ...what conditions are holding it back? Are these constraining conditions likely to be removed? If so, when is the last remaining constraint likely to be removed and by whom? Three elements are holding the tornado back. First for released and qualified parts (Essentially that means only Blue-Green LEDS) Inability to deliver enough good product to customers is the only apparent constraint. This is likely to be first removed by CREE by the end of the year ...unless YOY volume increases in excess of 12x. Second element is for released parts in qualification The qualification procedure is the constraint. Assuming the devices in Qual meet the price/performance needs of the customers this constraint is likely to fall within 6-9 months. For LED's in qualification CREE appears to have as good a chance as anybody. For power devices we have to consider Nitres, Westinghouse, and ABB as being in the mix. Westinghouse released a device several years ago, but I can't find any new(less than 2 years old) references to it. Nitres announced a record setting high power high frequency transistor in Jan at a tech symposium. Cree released products last July and Dec. I'm not sure of ABB's device release. The constraint removal timing is uncertain here, but it also gives us something to look for as it will likely determine the "who" part of the question. Third for Lab Products (Blue Laser in CREE's case, Other High temp/power/frequency devices) The constraints are likely processing and material science. This is anybody's guess as to who or when. It will likely be a steady stream of "breakthroughs" in this area that keeps the tornado going. I would think that if CREE can take and maintain an early lead, it has a good chance to prevail, but should CREE stumble, the far greater resources of some of the competition may shift the balance of power. In short, I think CREE will provide a very interesting experiment in GG over the next 12 months. FATBOY