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

To: stomper who wrote (18864)	2/28/2000 12:57:00 AM
From: chaz	Read Replies (2) \| Respond to of 54805

OK, here're my notions regarding ELON. First, I think it is a possible gorilla that could, depending upon competition, fall into a royalty game. If it does in fact become widely adopted by the building/architectural community, and more and more manufacturers build products to it's standards, then it would become a defacto standard, competitors would become chimps or monkeys. To become a royalty game, ELON needs a powerful competitor...is WIND a candidate for that status? Who else might be? Is adoption by Carrier a defining moment? Not IMO. Carrier is just one of a host of companies...and I really don't think any one building product manufacturer is large enough in and of itself to establish a defining moment. In any given building, no one company has such a large peice of the total construction cost to warrant this, certainly not Carrier, or Trane, or Honeywell...all large companies to be sure, but still not big enough. It's an opinion, perhaps a prejudice, but no one of them "rules" the other. If the entire HVAC industry adopts LonWorks, manufacturers, specifiers, builders, utilities...that's a different situation. In that case, you'd start looking for market share. How many buildings go up with it versus those without it. I'll say again, this is a price-sensitive field where every participant cuts costs because of the cheapo client who wants the lowest bid. Look instead, I suggest, for COMPANIES that are building new facilities. Walmart, Home Depot, Lowes, and for new manufacturing facilities where LonWorks is being included. In these situations, the CFO knows that every dollar saved in plant operation means the same as perhaps $80 in sales...when the bottom line is considered. In these places, LonWorks is (may be) looked upon as a cost saver...exactly the opposite of the cheapo client building a house, apartment complex, high rise condo, or similar. Probably the biggest client of them all is the Government. Has LonWorks been endorsed by the GAO? Have they been approached? Be interesting to find out. Chaz