To: Jill who wrote (2159 ) 9/19/2000 10:22:40 AM From: CAtechTrader Read Replies (1) | Respond to Jill, Re: TERN, sorry I was on the road over the weekend and yesterday. I am ready to start the TERN discussion we spoke of. TERN is like QCOM in many ways in that TERN has the CDMA technology for cable modems and cable delivery of bits of data....TERN also is in the position of having a technology that AT&T (Cable Unit) must ultimately capitulate to. TERN is the largest seller of cable modems in Canada (via Rogers Cable) and Japan. BRCM which designs competing, but non-cdma cable modem chips has a market cap of $50 bil vs. TERN's market cap of $2.66 bil, yet we would argue that in TERN/BRCM's key market, cable box tops, TERN has the superior product. Just like in wireless spectrum, there is lots of "noise" on cable coax systems...Lots of dropped packets occur on TDMA box systems because the data arrives out of time order and cannot be processed. This is a big part of the degradation of cable access systems once a number of users get on a system...a big problem for ATHOME...anyway TERN's CDMA reassembles the bits in order so a far more effective delivery system, faster with far fewer dropped packets...This is the big capital expenditure facing AT&T and most USA cable systems...they must upgrade to TERN's CDMA...in Canada and Japan the penetration of cable modem use is far greater than in the USA (Gilder Statistics) because there are far fewer problems and the speed is greater. Ultimately, the US Cable companies will have to get out their checkbooks or lose out to other forms of broadband. TERN is profitable and continues to surprise on the upside each quarter. TERN's stock price reflects FUD as well...talk of "fiber to the home" has hit the price. Even Gilder says Fiber to the Home is unlikely as being prohibitively expensive to deploy...at least in the next 2 decades (think of all the local hassles for right of way, etc)..Gilder thinks "Fiber to the neighborhood" is more likely...with the "last yards" to the home being via existing cable lines in the neighborhood. This plays right into TERN's strengths...why have fiber in the neighborhood only to slow down the delivery by a noisy TDMA system? Anyway, I throw this out to begin a discussion on the board..I believe TERN fits in with themes such as QCOM and RMBS on the porch. Cheers!
