To: D. K. G. who wrote (2 ) 9/1/2000 6:45:26 PM From: D. K. G. Read Replies (1) | Respond to of 131 Competition The metropolitan area and high-speed premises networks markets for optical subsystems and modules for optical communication network applications is highly competitive and subject to rapidly changing technology. We believe the primary competitive factors impacting our business are as follows: .cost-effective products that balance performance requirements with the cost of the product; .timeliness of new product introductions; .scope and responsiveness of service and technical support; .established reputation with key customers; .technical innovation; .quality and reliability of our products; .breadth of product offerings; .gaining design approval during our customers design cycle; .compatibility with emerging industry standards; .price characteristics; .ability to rapidly scale production for high volumes; and .data-rate, port density and other performance features. We have established a significant position in the metropolitan area and high- speed premises network markets by identifying and focusing on subsystems and modules for these markets. We believe that we have a unique combination of comprehensive product offerings, management and design expertise, market understanding and manufacturing capabilities that provide us with a competitive advantage in these markets. We compete primarily with Agilent Technologies, ExceLight Communications, Finisar, Infineon Technologies, IBM, Lucent Technologies, Luminent, Molex, Stratos Lightwave and Tyco International. Many of our current and potential competitors have significantly greater financial, technical, marketing, purchasing and other resources than we do. See "Risk factors -- Our markets are highly competitive, and our customers may choose to purchase our competitors' products rather than our products."