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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Lynn who wrote (6444)	8/4/2000 4:31:27 PM
From: Kenneth E. Phillipps	Respond to of 14638

Cyras Systems Inc. Fri Aug 04 14:05:00 EDT 2000 New York, Aug 04, 2000 (123Jump via COMTEX) -- 123 Jump: So when Nortel (NYSE:NT) and Lucent (NYSE:LU) roll out there OC- 768 systems they are going to be in trouble? Steve Pearse: We will be there waiting for them. 123 Jump: Now, other companies in the space that may be publicly known, like Sirocco for example, how do they defer from what Cyras is doing? Steve Pearse: They differ in that I don't believe we will be seeing a product from them for a while. 123 Jump: I see, so you are shipping the product already? Steve Pearse: Yes. 123 Jump: Can you give us any detail as to how many customers you have at the moment? Steve Pearse: We haven't announced an update yet, but we did announce back in May that we had eighty million dollars of customer orders from, at that time, five customers, and that has grown. 123 Jump: That is very considerable. That's for the year so far? Steve Pearse: That's correct. 123 Jump:Incredible. This is really a space where a lot of analysts are going to be looking for the real growth now. What are the issues that you think are confronting you at this stage? Things that you have to keep in mind to stay ahead of everyone else - things like interoperability, scalability, reduced component size - what is it from your end? Steve Pearse: Well, we've looked at those issues. The only issue we have now is what everybody is facing, which is availability of parts and components. 123 Jump: Manufacturing capacity or actually buying those components from other suppliers? Steve Pearse: It's competing with others for the same components. There is an industry wide part shortage right now. So, what we are doing to hit that issue is we're buying next year's components now, so we don't have that issue going forward. 123 Jump: This component shortage that you are seeing on an industry-wide scale, is this having an upward pressure on the price of these components as well? Steve Pearse: Yes, it does some but it's not a factor to us. Our product is built so cost effectively and, again, when you look at the cost of a typical central office product or box there are two major components. One, how you get in and out of the box, in our case that is with lasers or transponders and there's tremendous competition in the industry there. The other cost is what's inside, it's a switch and that's where we have a huge advantage. That's why we are really crashing the price here because we reduced that switch into one little chip. 123 Jump: And that's the ASIC that you referred to earlier? Steve Pearse: Yes, our ASIC is capable of switching the equivalent of an OC-768, 768 STS1's. 123 Jump: So that's 40 gigabits per second - you are basically ready for the next generation of products that's coming? Steve Pearse: Absolutely. 123 Jump: The next thing that I wanted to address was really regarding this ASIC. There is a lot of talk in the industry over optical switching; it's a nascent market, which is poised to be a huge market. There are a lot of factors driving that and there are a lot of competing technologies - you have Agilent's (NYSE:A), bubble switch, JDSU's (NASDAQ:JDSU) thermo optical switch. How does your ASIC compare with some of those? Is it an all-optical switch? Is it opto-electric? Steve Pearse: Well, the network of tomorrow needs two kinds of switching. It needs optical switching and it needs electrical switching - you can never get away with having one or the other, you have to have both. 123 Jump: Why is that? Steve Pearse: Because if all you can do is switch colors of light, then those colors of light are practically empty. The problem here is, is that those pulses of light have to be, at some point, converted into electrical and the question is where do you convert that to electrical. Do you convert that right before it goes to a customer, say Intel Corporation (NASDAQ:INTC), in which case they are responsible to get that light filled up as best as they can and they are going to have a hard time doing that. The best place to get multiple customers and multiple services into a color of light is by the service provider. If you've got a 10 gig light wave system or a 40 gig light wave system you can put a tremendous amount of traffic on those colors of light but your network is efficient if you can get more data, more electrical sources, onto that color because you may have a 40 gig color of light and only have 10 megabits of data on that, so you've got a terribly engineered network then. CONTACT: For more information, contact 123Jump.com, Inc. 212-968-8700 Send comments or questions to: info@123jump.com Or, visit 123Jump.com at: 123jump.com All Rights Reserved. (c) Copyright: 2000 123jump.com, Inc.