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

To: pat mudge who wrote (2933)	10/10/2000 12:46:25 PM
From: OWN STOCK	Read Replies (2) \| Respond to of 3951

All: Muddy firsthand evidence of Telecom spending: AT&T Broadband (check the name) is digging up the street next to my house, installing fiber in massive orange colored rolls...they now own TCI cable. It's raining cats and dogs today in SiVal...muddy out there with all the digging. So the move is to broadband services, and telecom companies without the bandwidth will just plain die. Bandwidth takes hardware, and a lot of it. Hardware is not free. Component ASPs are dropping a tiny bit not due to lack of sales, but because of it....called the learning curve...aka volume discounts. So revenues and margins of optical component makers will increase for sure....you can bank on it. Does this mean the optical component stocks will rise? Who can say, but it should...if oil does not kill the market as a whole... So the message is there is a sea change coming in Telecom....some of the old players will not survive it...that will make the market nervous as hexx...watching dinosaurs die makes some small mammals run for cover...others will rush in and get a bite of fresh meat! Where are you in the food chain? Long JDSU/SDL! -Own

To: pat mudge who wrote (2933)	10/10/2000 1:43:25 PM
From: Wyätt Gwyön	Respond to of 3951

essentially a prisoner’s dilemma. If every carrier elects to slow down capital spending (ignoring customer requests for new services, by the way), then all of the carriers will be better off than the current hyper competitive environment. However, if even a single carrier breaks rank, all hell breaks loose This reminds me a bit of the new pumpheads at gas stations...you know, with the built-in credit-card reader so you don't have to go inside. Now what good does this do for the gas station? The customers don't go inside, so they don't have as many impulse buys in the quick-mart when they pay their bills. I know I used to buy munchies or drinks a lot when I had to go inside to pay, but rarely do I go inside now when I can handle the whole transaction at the pumphead. The poor gas station still has to keep a worker on site (at least for now), so this new development doesn't lower their labor costs. But does this added convenience increase their demand, the way a drive-thru window increases business for a Starbuck's? Prolly not--I don't buy any more gas than I used to. It is just more convenient to make the purchase. So who does this pumphead upgrade help? The equipment maker and the consumer, and that's about it. Does that mean the "carriers" can skip the expensive upgrade? Hardly not, unless they all conspired to skip it a la prisoner's dilemma (perhaps they do that in heavily regulated places like Oregon, where you can't pump your own gas anyway). So it is kind of a prisoners dilemma for the stations: if even one station has a credit card reader at the pumphead, all the business will go there. Now they seem ubiquitous, but a few years ago, during the transition phase when you would occasionally find a non-upgraded station, I know I would mercilessly drive away without buying gas--voting with my wallet in a fashion I'm sure was very common. Upshot was the station owners got the message and made the upgrade. One small convenience for consumers, one large paycheck for Wayne Division of Dresser Industries! The nice thing about the telecom world is that the upgrades happen all the time!!!