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Technology Stocks : SDL, Inc. [Nasdaq: SDLI] -- Ignore unavailable to you. Want to Upgrade?

To: OWN STOCK who wrote (969)	3/15/2000 3:05:00 AM
From: pat mudge	Read Replies (1) \| Respond to of 3951

It doesn't matter who's fighting, when the battle heats up SDLI and JDSU are the winners: mercurycenter.com Posted at 9:21 p.m. PST Tuesday, March 14, 2000 `Horse race' on fiber optics speeds up Nortel counters Lucent with plan to buy Xros BY CHRIS O'BRIEN AND SARA ROBINSON Mercury News Staff Writers Nortel Networks agreed Tuesday to pay $3.25 billion for Xros Inc., a Sunnyvale company with 90 employees and a technology that directs voice and Internet traffic over fiber optic networks at lightning speeds. The purchase is the latest move in an increasingly expensive battle between Nortel and other networking companies trying to dominate the expanding market for fiber optic network equipment. While Nortel is the current leader, rival Lucent Technologies trumped it by recently unveiling an all-optical switch, long considered the holy grail of optical networking. With its purchase of Xros (pronounced ky-ros), which has developed such a switch, Nortel has struck back. ``It's going to be a good horse race here,' said Chris Nicoll, director of carrier and optical infrastructure analysis for Current Analysis, a market research firm. ``It benefits the market when you have good head-to-head competition. This is two of the heavyweights continuing to slug it out from a technology and solutions standpoint.' Traditionally, telephone and computer networks have transmitted information as electronic signals over copper lines. But these networks have had a hard time keeping up with the growth of the Internet and new communications services. To relieve the increasing bottleneck, companies are turning to fiber optics, which transmit information using beams of light which travel over thin strands of glass. Optical networks can carry far more information than copper networks at much greater speeds. More important, optical equipment doesn't need to be replaced as network traffic increases. The demand for optical equipment has created a frenzy among companies that build and sell networking gear. In the past year, Nortel, Lucent and Cisco Systems Inc. have spent billions developing new optical technologies and acquiring companies. But while optical equipment is slowing replacing traditional equipment, there are several parts of telecommunications networks that remain stubbornly wedded to electronic equipment. That includes switches, the giant computers which act like digital traffic cops. Today, switches convert information traveling in light waves into electronic form before directing it and then reconverting it back to light. Lucent's and Xros' optical switches, however, use a tightly packed array of tiny mirrors to direct optical traffic. This eliminates the need to convert data into electronic form, increasing traffic speed and reducing costs. Nortel has ample resources to finance its purchase of Xros thanks to its high-flying stock, which has quadrupled in price over the past year. The acquisition, which Nortel said will be completed in the next three months, still must be approved by Xros' shareholders. ``Nortel has been leading and is investing in continuing to lead the optical Internet,' said Greg Mumford, president of Nortel's optical networks unit. Greg Reznick, Xros' chief executive, said that once the sale is complete he plans to grow his Sunnyvale group significantly to meet the expected demand for his product. Nortel and Lucent each claims that it has the advantage in optical switching technology. Reznick said Xros switches can handle many more channels of traffic. Gary Bonham, a Lucent spokesman, noted that Lucent expects to have a product to market in September, while the Nortel switch won't be available until next year. ``Every company is going to tell you that their's is superior,' said Linn Hutcheson, an analyst for RHK, a marketing research firm. ``It's too early to tell.' In the meantime, analysts said, other equipment makers, such as Cisco, Sycamore Networks and Ciena Corp., will need to develop or acquire optical switching technology in order to remain competitive in the optical networking market. Cisco made several acquisitions in this area in the past year but lags behind Nortel and Lucent. ``Cisco needs to finally pull together its optical acquisitions and bring them together into one intelligent optical networking solution,' Nicoll said. Cisco shares fell Tuesday $4.44 to $131.75, Sycamore shares fell $7.70 to $142.56, Ciena dropped $13.13 to $134. Lucent shares rose 81 cents to $67.06 per share.

To: OWN STOCK who wrote (969)	3/15/2000 10:34:00 AM
From: pat mudge	Read Replies (1) \| Respond to of 3951

Intel announced it's buying GIGA. Interesting in that I discovered them at OFC after a discussion with a pre-IPO fiber optics CEO. I asked who sold all those capacitors and widgets that were in short supply and he said AMCC and GIGA. Of course the former has been discovered and I soon learned the latter is part of a large European conglomerate. If I understand it right, INTC has just made a fiber optics play. Pat