To: CJ Quantumwell who wrote (1185 ) 1/31/1998 11:12:00 AM From: bill c. Read Replies (3) | Respond to
CJ: I'm not in the optical transport business, but I do find this interesting. Thanks for the list of components that I need to research. Here is Alex. Brown's view:...We were impressed with the level of enthusiasm and confidence expressed on the Lucent conference call yesterday. The announcement and technical details of the OLS clearly deserve attention. However, it is our belief that building a DWDM system of this magnitude is complex and involves a great deal of integration beyond bundling together a variety of separate components. Many of the issues with a system such as this do not become clear until extensive field trials have been performed. The product is not in pilot production and a year-end delivery seems aggressive to us. We also have concerns over whether waveguides are the right approach. But more importantly, the optics game is not a game simply of counting channel densities and arguing over obscure rare earth materials. Far more important is the ability of a vendor to produce commercial quantities at acceptable margins. Systems of 100-200+ channels have been produced over the last decade in research labs as have optical crossconnects. But no commercial systems of such magnitude have yet been delivered in quantity. We consider Lucent to be one of the premier optical technology companies in the world, and Lucent is the prime competitor to Ciena. If Lucent can deliver OLS with the announced specs on time, this could be a negative development for Ciena. However, where we have seen Ciena succeed in the past is in the Company's ability to deliver product meeting customer specific applications in high volume with very attractive margins. We believe this capability to be unique in the industry. Producing lab systems is one thing whereas delivering over half a billion dollars of product to two very satisfied, world leading carriers is quite another.
