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To: BDR who wrote (37004)	12/24/2000 4:01:01 PM
From: John Lacelle	Respond to of 54805

Dale, I think CMGI was perhaps the greatest case of mania we have seen in this bull market. I pity the people who have been buried by its collapse. -John

To: BDR who wrote (37004)	12/25/2000 12:41:47 AM
From: BDR	Respond to of 54805

Something to read when everyone gets back to work on Tuesday. Kevin Kalkhoven on the opportunities ahead in 2005: lightreading.com Light Reading: What exactly are these "themes" you're talking about? Kevin Kalkhoven: It's our vision of the technologies that will be important in 2005, and it falls into three parts. The first is, obviously we're still going to have optical components, but they're going to go through the same kinds of generations that the electronics media went through, from discrete components to printed circuit boards, to solid-state devices. Today, the component technology is still back in that discrete, bulk-optics phase. And so we are looking at technologies that will provide greater degrees of integration and thereby higher levels of automation in the manufacturing process, and lower costs. And we believe, from the components side, that's going to be key. On the end-user side, that last-mile and last-inch solution is another area we think is very very key. Today, the vast users of data are still the corporations. If you look at 2005, the potential for vast increases in data capacity come not just from the commercial users, but also from individual consumers, worldwide. And clearly, that's not going to come from them all having PCs. Increasingly, we believe it will be coming from appliances, PDAs, and variations on cellular phones, and all the rest of that. In order to be able to achieve that expansion, we need new appliances, and new appliances in turn need new semiconductor technology and new display technology, because, fundamentally, battery technology isn't going to change very much. So we need high-resolution, color display systems with very low power consumption, and we need greater degrees of integration in the semiconductor devices within these, all aimed at better performance and lower power consumption. The third theme revolves around the wireless side itself -- we need the 2.5- and 3-G cellular systems; we need them in greater degrees of abundance. We need buildings that are wired for RF [radio frequency]. One of the things that's kind of neat about LGC Wireless is it's RF and fiber optics, so you can wire an airport, or a building, and get very good reception inside it, at high speed. That's sort of the whole [thematic] point, which is all about how do you get more and greater capacity to the individual user. When you work back from that, what we've got is a situation where we need greater capacity in the last-mile solutions, and that's going to be a combination of the ADSL, cable, wireless, and coarse WDM -- coarse WDM because it provides sufficient capacity at low costs. [editor's note: KPL has also invested in a CWDM startup -- see Blaze Networks Gets $40 Million ] Working back from the last mile are the metro networks, and working back from that are the main trunk nets. So we kinda know how to increase capacity on the trunk routes; we kinda know how to do it on the metro. The interesting things are really in the access and sort of "campus" markets. (edit) Light Reading: Let's go back to your point about the need for greater integration of optical components. At a recent J.P. Morgan & Co. conference [see Packaging the Optical Future ], all the vendors agreed that greater integration was important. And everybody also said that, technically, it's not that easy to do. Kalkhoven: They're absolutely right. And that's what makes it fun and interesting. Light Reading: So what should investors or potential partners look for? What are the signs of a smart components company? Kevin Kalkhoven: All of this is relatively linear. The one great thing about photonics is that you can make one of anything. And most people can make five of something. The real issue with photonics, is how do you make 10,000 of them a month? We can even see today how to be able to do far greater levels of integration than we currently achieve. But right now the industry can only make one of them. We may not have even got to the five of them yet, and we're a long way from the 10,000 of them a month.