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Technology Stocks : SDLI - JDSU transition -- Ignore unavailable to you. Want to Upgrade?

To: FlameMe who wrote (202)	2/16/2001 10:21:16 AM
From: pat mudge	Respond to of 3294

I'm glad Cramer's finally decided to distinguish between voice and data --- old SONET vs DWDM --- but he's speaking out of both sides of his mouth at the end of the article. If this is a good market for DWDM system players then it's a good market for the guys who provide the components. You can't have ONIS, CIEN, NUFO, etc. being successful without JDSU being equally or more so. In Nadig's crystal ball, the winners are those companies who exist solely to increase the efficiency of the network: his short list consists of Sonus Networks (SONS:Nasdaq - news - boards), (AVNX:Nasdaq - news - boards), ONI Systems (ONIS:Nasdaq - news - boards), New Focus (NUFO:Nasdaq - news - boards), Avici (AVCI:Nasdaq - news - boards) and Corvis (CORV:Nasdaq - news - boards). And yes, Ciena (CIEN:Nasdaq - news - boards). There are some scary, small-company-big-dream names in there, and that's what you'd expect. These are companies with minimal legacy business -- for better and for worse, they are all about the future. Every move towards the next generation is incremental business to them. How about a big diversified component supplier like JDS Uniphase (JDSU:Nasdaq - news - boards)? Nadig is concerned that a move toward efficiency shrinks the component market in the short term, so Uniphase could be hurt. After all, in some sense the whole point of efficiency is to use fewer commodity components, if you can get away with it. One response from Uniphase might be to acquire a next-gen component maker like New Focus, now that they've closed on their SDL acquisition -- but that would be tough on the short term, too. But in the long term, Uniphase should benefit. When the investments in network efficiency bring down the unit cost of bandwidth, whole new markets will open up and the spending spigots will have to open again to meet the increased demand. That dynamic has described the boom-and-bust business in high tech products for decades. So today, be smart -- not afraid. Not all networkers are created equal. If they all get marked down equally, you've got an opportunity.