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

To: Jack Hartmann who wrote (3481)	11/13/2000 2:36:59 AM
From: pat mudge	Respond to of 3951

Jack -- The figures for CapX don't break out optical networking, except on the lower chart where they break down the spending into voice, data, wireless, and other. It's probably more helpful to look at the Deutsche Banc Alex Brown comments: Firstly, carrier capex. We believe that carriers will continue to focus on optical transport as the only economical means to handle the bandwidth demand, in addition to optics’ ability to provide immediate revenue benefit due to the ease of provisioning. In this regard, North American carrier capex focused on the optical transport segment is expected to grow approximately 38%rising to $29 billion in 2001 from $21 billion in 2000. However, overall North American carrier capex is projected to grow 21% in 2001 to $133 billion from $110 billion in 2000, according to RHK. The growth in the optical transport market is being lead by next generation optical networking/DWDM which is projected by RHK to grow 167% in 2000 and 63% in 2001 while SONET is projected to grow 43% and 30% over the same periods. We also feel that beyond DWDM transport there are significant opportunities emerging in the metro/optical edge and in core optical switching. According to Pioneer Consulting the Metro/Optical Edge market is expected grow to $8.3 billion in 2004 from $1.2 billion in 2000. And the core optical switching market is projected to grow $15 billion in Europe and North America by 2004 from approximately $544 million in 2000. This week's Barrons makes the same mistake of drawing misleading conclusions about fiber optics growth based on total CapX numbers. If General Motors stopped making a certain model car and analysts ignored all the new models coming out and concluded their sales were dropping, we'd say they'd lost their &^%$#@@ minds. I'm beginning to feel the same about communications analysts --- at least those quoted in the press. To carry the auto industry metaphor further, the newer models are so efficient and save their owners so much money, anyone selling only the older models will end up in bankruptcy if they don't switch over. The older models cost several magnitudes more to buy and maintain than the newer models, so as word gets out, it's Katy, bar the door. Granted, GM has to figure out how to balance slowing sales in one area with increased sales in another, but the guy who sells parts for the new models is sitting in the cat-bird seat. If GM can't get its act together, Ford will. Pat