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Technology Stocks : Westell WSTL -- Ignore unavailable to you. Want to Upgrade?

To: Smilodon who wrote (9302)	2/5/1998 2:19:00 PM
From: Trey McAtee	Respond to of 21342

archer-- dont ever apologize for offering a different and rational point of view. however, there are a few things i woudl contest. you seem to have placed far too much emphasis (as most on wall st. do) on IP. the simple fact is that for xDSL to take off at all, there has to be uniform standard. so, no one company is going to grab the absolute market. the TI/WSTL deal is much more than saving face. TI is pinning a lot on WSTL being a big volume customer, and they have a vested interest in making sure it succeeds. in addition, WSTL has a competitive advantage against ALA and PAIR since it doesnt have to maintain fabs. i may be out on a limb here, but i feel pretty confident that TXN can outprice ALA and PAIR on the chips, and not just on manufacturing. i think they can beat PAIR and ALA's COSTS on the SALES price to WSTL. IMHO, this gives WSTL a very good position when it comes to final pricing and margins. in high tech, margins are EVERYTHING. now, as for the big competitors, this really isnt a natural market for them. this isnt selling to a datanetwork division, this is selling into the customer side of the telco business. WSTL has some advantages here. now, i know this it is popular to think that large companies want to come in and start new divisions that compete with established players. i do not think that will happen. 3COM wanted into the modem and PDA business. they merged with USRX. i dont see any reason for them to start from scratch when they can buy complete. you do make a good point about the core business, which isnt really growing.but, from the last q it looks like they are improving margins, which is great news. in addition, the cost cutting measures will be helpful startign next q, so i think a lot of the estimates may be wrong. by the same token though, seamens said during a CC last year that he was not comfortable with estimates and that they needed to be revised upwards. maybe he really thought that at the time, but as of now it hasnt come through. there is a lot to work out with this company and i for one appreciate hearing another opinion. thanks for providing it. good luck to all, trey