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Technology Stocks : Natural Microsystems [NMSS] -- Ignore unavailable to you. Want to Upgrade?

To: Ron Kory who wrote (58)	6/6/1998 9:20:00 PM
From: Frank A. Coluccio	Read Replies (1) \| Respond to of 308

Ron, now you ask the tough questions. >>..for one thing small cap stocks...have performed horribly particularly technology... Secondly, companies like csco and lucent are moving rapidly into this area which raises the question how companies like NMSS, DLGC, VOCLF etc. will compete. And, third, as you mentioned, there are so many new entrants.<< Add to these factors that, if you think the market is commoditized today with only a couple of thousands of units installed, what will it be like when there are hundreds of thousands or millions of units in place? That might sound reassuring, i.e., the fact that millions of callers will be using VoIP, but it wont be solely over any particular kind of platform that we can predict now. Keping count and locations of these over time will get lost to entropy. It could be engrained over ADSL links, the end office switch architecture, avoiding adjunct devices entirely, or by way of cellular base station provisions, or any of the now non-voip/or non-VTOA (voice telephony over ATM... I'd better get used to saying that, too) platforms that service our day to day telephoning needs, in fact. And just in case this isn't enough to get you thinking about it, LU has recently announced that they will be entering this capability into their end office 5E switches in their next release. Also, up and down the supply chain, the negotiating effects are felt that are played out by the end user carrier organizations, where 'mils' make or break a deal between wholesalers and retailers of end-user services, not cents or dollars. And the competition, where voice pricing is concerned, is getting tighter, losing elasticity every day, along with the rubber band you referenced. All of this at some point translates to negative effects on first-link suppliers in the chain, who are selling early (first and second generation) technology. In other words, it ain't getting 'more' lucrative. These pricing pressures ocur to me at times when I attempt to rationalize a profitable future for any of the parties who are purely (as in pure play) in it for the VoIP component. And in this respect, I have to agree with you concerning the presence of the LUs, CSCOs and Bays in this sphere. This recalls to my mind Cisco's Chambers allusion to voice as being like ketchup on a McDonald's hamburger. It's free, he states (but it's really not free, he goes on to explain), if you have the other necessary services you are paying for, over which voice can 'ride' for free. I'm seeing it happen already. Regards, Frank Coluccio