Re: ""but Terayon acquired an Israeli cable telephony firm called Telegate that was already using Shlomo's S-CDMA." This implies Telegate product(s) will fill in where Terayon's have failed"
Notice, Telegat's product, using Shlomo's S-CDMA, is in fact the CDMA of a Terayon founder- Shlomo. Hence, your point seems illogical.
You've side-stepped my point by saying my statement was illogical. It may have appeared illogical because Gilder's saying Terayon has an S-CDMA solution that doesn't provide VoIP hardly leads one to think they'd buy another S-CDMA company to remedy the situation. The lack of logic isn't mine --- it's Gilders. His article indicates Zaki turned to "Schlomo's S-CDMA" because, as you subsequently explained, they didn't have a TDMA product. My question was and is, How does adding Telegate solve Rogers' need for VoIP? We've established the fact TDMA offers VoIP. We've also established the fact Rogers wants VoIP. AND we've established the fact Terayon turned to Telegate for that solution. All I'm asking is how does Telegate provide VoIP if it's also S-CDMA? What does it have that Terayon's proprietary S-CDMA doesn't? This doesn't have to be complex. A simple answer will do.
And what story is Gilder pitching? If CDMA, then how do you explain success in the face of being thrown out of Rogers?"
Thrown out of Rodgers? Care to reference that notion? I believe that is false too.
Kicked out was too harsh. However, I'm basing my comments on
1) Gilder's article where he says, "...Shaw's success caught the attention of the other great Canadian cable provider, Rogers (RG), which had been using Nortel cable modems from LAN City (Bay). Rogers turned to Terayon for help. Terayon struck two deals: one with Rogers cable for Terayon's cable modem system, and one with Rogers Communications for a joint venture to develop voice over cable technology. Almost immediately, according to Zaki, the Rogers voice partnership confirmed that VoIP for cable was not ready, particularly with TDMA. But Terayon acquired an Israeli cable telephony firm called Telegate that was already using Shlomo's S-CDMA..."
2) Terayon's last quarter's numbers which you so kindly helped me understand when you said, ". . .Cherrypicker is already beyond the initial development stage, it's in use and helping to cause Tern's revenues to soar, and their pro-forma profits to become .04 last Q vs an expected pro-forma loss of $.19.. . ."
3) Terayon's S-3 filed on January 25, 2000, indicating all was not well between TERN and Rogers:
On March 18, 1999, we entered into a Supply Agreement with Rogers Cablevision Limited ("Rogers Cablevision"), a subsidiary of RogersCommunications. Under the Supply Agreement, we agreed to make available to Rogers Cablevision our current TeraLink Gateway and TeraLink 1000 MasterController, and TeraPro Cable Modems and specified software. We also committedto certain product pricing and specifications. Under the terms of the SupplyAgreement, Rogers retains the right to return to us all product purchased untilwe meet certain conditions. Accordingly, we do not recognize revenue onshipments to Rogers Cablevision until the milestones specified in the SupplyAgreement have been achieved or Rogers Cablevision has waived the right toreturn the product. For the three month period ended December 31, 1999, we didnot met the milestones required by Rogers Cablevision in the Supply Agreementand Rogers Cablevision has not waived its right to return certain productpurchased. Accordingly, we cannot recognize revenue on the sales of product toRogers Cablevision for the three month period ending December 31, 1999 until ourproduct meets certain milestones as required in the Supply Agreement or RogersCablevision waives the right to return the product. There is no guarantee thatwe will be able to obtain the waiver of conditions from Rogers Cablevision torecognize revenue for the three month period ending December 31, 1999.Additionally, there is no guarantee that we will be able to achieve theconditions specified in the Supply Agreement or obtain waivers from RogersCablevision in future quarters.
and 4) a conversation with a former employee who indicated there was a strong chance Terayon's S-CDMA wouldn't be deployed by Rogers.
Now, putting all four together doesn't add up to being "kicked out," but it's clear Rogers wants a VoIP solution and that Terayon's current products aren't meeting those requirements.
"Thrown out of 1.2 and Adv PHY at CableLabs isn't exactly "poised for success.""
Again, this "thrown out" reference is apparently just false, as Cablelabs clearly has extended an invitation in.
Current specifications do not include Terayon's S-CDMA. So, yes, Terayon has, indeed, been thrown out of current specs. The outcome regarding future specifications is uncertain. Terayon's S-3 states;
In November 1998, CableLabs selected us to co-author a technicalspecification for DOCSIS 1.2, an enhanced version of the DOCSIS cable modemstandard based in part on our S-CDMA technology. Since then, CableLabs has reaffirmed its intention to add advanced upstream physical layer (PH) capabilities to the DOCSIS specifications as enhancements; however, CableLabs has modified its plans for how the specifications will be created. In September, 1999, CableLabs indicated that it wants to proceed with the advancedPHY work on two parallel tracks: one for the inclusion of our S-CDMA technology,as proposed by Terayon; and, one for the inclusion of Advanced TDMA technology,as proposed by other companies. CableLabs wants work to proceed in parallel on these two complementary technologies, but the intention remains to include both as operating modes in a future version of the DOCSIS specification, consistent with the original plans for DOCSIS 1.2. As part of the new plan to add advancedPHY capabilities to DOCSIS, CableLabs has dropped reference to what was formerlycalled DOCSIS 1.2, the name given in November to the specification that includes advanced PHY.
CableLabs has requested that we submit a prototype of a DOCSIS system that incorporates an S-CDMA advanced PHY capability for testing. CableLabs has stated that if the testing of this prototype reveals that the S-CDMA advancedPHY works as claimed, and if the costs for adding S-CDMA to DOCSIS products are in line with estimates, then it is highly likely that it will add S-CDMA advanced PHY capabilities to a future version of the DOCSIS specification.There can be no guarantee that the prototype we submit to CableLabs willdemonstrate the level of performance that CableLabs seeks, or, that even if itdoes meet performance expectations that CableLabs will incorporate thetechnology into a future version of DOCSIS specifications. In addition, ifCableLabs does proceed to include S-CDMA in a future DOCSIS specification, therecan be no guarantee that the DOCSIS S-CDMA specification will be the same as thespecification we incorporated in the prototype submitted for tests. . .
This is patently clear any inclusion of S-CDMA would be at some future date based on the success of prototypes Terayon has proposed to submit later this year. For now, Terayon is not included in any specifications. If "thrown out" sounds too strong, I welcome a more appropriate phrase.
Is this a string of non-sequitors? For the above paragraph to make any sense, we need clarity on how wireless CDMA and cable-based S-CDMA differ. And when using "more" and "greater" and "far superior," we need to know what's being compared."
Non-sequitors? No. If I read it correctly and I think I do, MORE is compared to flexibility in TDMA. GREATER is compared to capacity in TDMA. FAR SUPERIOR is compared to noise immunity in TDMA. I thought these comparisons were pretty clear and don't understand why you don't. What's more, this all appears to be correct, from what I've seen.
I'll be more precise, In what way is CDMA more flexible than TDMA? In what way is CDMA's capacity greater than TDMA? And under what conditions is CDMA superior to TDMA regarding noise immunity? I submit the jury's come back and pronounced TDMA the better technology. Until CableLabs determines otherwise, I rest my case.
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To sum it up, I find writings on this thread to be far more irresponsible than anything Mr. Gilder is likely to ever write.
I sense your frustration. I'm doing my best to back up my claims with quotes from published documents and information from reliable sources. If it's any comfort, I've written to the head of CableLabs DOCSIS testing to ask for clarification on current specifications. If I get a reply, I'll post here. If there's any way to get further clarification regarding Terayon's status at Rogers and Shaw, I welcome guidance. I certainly wouldn't mind making a few phone calls.
I hope you're not upset at my attempt to understand Gilder's claims. I don't think you can deny there were several places where his meaning was unclear. The beauty of these public forms is that we can carry on these types of debates and hopefully encourage everyone involved in the investment community to speak and write clearly and honestly.
Regards,
Pat |
