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Technology Stocks : Orckit (ORCT) -- Ignore unavailable to you. Want to Upgrade?

To: srvhap who wrote (787)	10/30/1997 11:12:00 PM
From: savolainen	Respond to of 1998

q3 conference call/ earnings interesting info... think we can now explain the big orctf volumes early september and during the last week... word was out... volumes @ both times would correspond with two of izhak's highlights: september: shipping adsl over isdn modems to a european operator.... "(adsl over isdn) ... became a key factor in european market... showing big interest.. ...adsl over isdn is a key point ...why? ..first (adsl) customers are current isdn customers... they want to keep the isdn service at the same time...this is what we are providing to them .. we are the only co providing this solution...and it became a key factor to get to trials in europe..." this last week: inclusion in major North American adsl field trial (fujitsu/orctf).. my current guess is that this is GTE, although suppose it doesn't really matter... "...until now we (orctf) participated in lab trials (in usa), but they didn't include our equipment in field trials because our...equipment was european.... it took us 6 mo with fnc to adapt to american requirements... (now we) have been included in a key trial by major telecom co and now we know that this will enable us to participate in more field trials... Aside...Recently I ran into a comment (from May) by Barry Nalls, GTE's assistant vice president of business product management, that ".. new trial partners and equipment vendors will be added (to the trials) over the next few months"... S&T News - May 12, 1997 internettelephony.com more from conf call: $150,000 vdsl revenue sounded significant... major co's moving into field trials for vdsl (in field trials they pay... in lab trials they just borrow equipment and return)... and orctf is currently the only co with product (suitable for trials)... eps were +.01 even with lower revenues than last qtr... <g> (after a quick glance at the numbers think the positive earnings can be attributed mostly to an extra $657k in R&D grants...) lower revenues were attributed to a major customer's putting off orders to current quarter... apparently there is now a european tender out for 1,000,000 lines to be delivered in 98... orctf seems to be playing for the long term... will post more stuff from conference call after digestion... best wishes s

To: srvhap who wrote (787)	11/3/1997 9:14:00 PM
From: savolainen	Read Replies (1) \| Respond to of 1998

20-40% solution Have not been particularly thinking along these rather mundane lines, but... suppose at some point, to win tenders it will come down to the bottom line ... politics, connections etc no doubt will play their role in getting on the short list, and those xdsl co's who make it that far will probably all be able to deliver the technology... different bells and whistles, but... suppose all in all... at some point.. 8 mbps is 8 mbps... decisions then will shift to cost analysis... orctf's response is "silicon partners" from conference call: " dsl market... emphasis on low cost product....cost depends on the cost of the silicon.. silicon compose 20-40 % cost of product.... our answer is to sign partnership with partners..." would guess that cost of silicon would not be that big a deal for current trials @ 4-500 links with current dslam configurations, but with link counts of say a million and further dslam integration into line cards etc (more and more silicon less and less other) ...silicon costs would add up quickly... those who are buying from others would seem to be in the worst position... a better position would be those with preferred customer relationships ... even better would be those like orctf who have partnerships (equity investments)... and those in the best position would be those who own their own silicon supply outright... following this rather simplistic scenerio out ... Alcatel would seem to be in the driver's seat... (Deep pockets should probably be factored in... they are still in an enviable position...and factoring in winners to date... volume = lower cost.. alcatel still looks good) thinking about orctf positioning at first ... thought...well orctf was half way there (50% partnership share in silcon)... but orctf and fujitsu have two relationships... adsl silicon... and dsl equipment for n. america... putting the two together ... would think they would be in the same position as ala... between them... they would own their silicon supply... (and fujitsu's pockets are as deep as ala's... suppose the next 2-3 years will tell the tale of volume... and details of their joint business plan)... At least for the next two years, the technological silicon edge would still seem significant... power consumption/ chip count etc... orctf looking good... was pleasantly surprised when Tamir mentioned that "...current (orctf) chip now 1.5 watts... new chip much more integrated, and condensed and power will be reduced significantly..." if i'm reading this right, next generation fujitsu (orctf) adsl silicon will compare favorably with next generation ala adsl silicon... well under 1.5 watts vs under 2 watts... and chip count 1 vs 2... will not be surprised if ala is out first, say spring/summer 98 with fujitsu (orctf) @ summer/fall 98... although Tamir said adsl silicon is expected to "meet target for cost, schedule and product function... " he also stated "revenue at end of next year" from silicon partnerships... this could be conservative spin management etc, but ... seems like something slipped somewhere... On the brighter side, " chip in market in 1998... finished high level design and structure... and now in the stage of low level design..." Anyone out there who can explain what this means?.. best wishes s