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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Bindusagar Reddy who wrote (53577)	9/2/1998 1:25:00 AM
From: Tim Luke	Read Replies (1) \| Respond to of 61433

because i'm a short term momentum player, so calling a stocks movement for a weekly time frame is what i do best. heck if you want to know about a long i say just by dell and forget about the rest. but if want a good day or position play give me a call.

To: Bindusagar Reddy who wrote (53577)	9/2/1998 2:57:00 AM
From: djane	Read Replies (1) \| Respond to of 61433

Nortel (Northern Telecom) Accelerates ''Attack Plan'' with Expanded Capabilities PR Newswire - September 01, 1998 08:09 Merger Means Customers Win With Industry's Broadest Portfolio of Network Solutions TORONTO, Sept. 1 /CNW-PRN/ - John Roth, vice-chairman and chief executive officer of Nortel (Northern Telecom) (NYSE: NT/TSE: NTL), and Dave House, the corporation's new president, today unveiled a new networking powerhouse, as a result of the largest merger in the history of data communications. Roth and House spoke to more than 80,000 employees on a live video broadcast reaching 150 countries. Using a Nortel Passport frame-cell backbone network, it was one of the largest live closed-circuit broadcasts ever. ''This merger is a giant step in accelerating the execution of Nortel's global strategy of delivering an unparalleled breadth of network technologies and solutions to our diversified and growing base of customers throughout the world,'' said Roth and House, who are sharing the newly created Office of the CEO. ''We are now unique in the industry -- we have the capability to supply not only a complete line of wireless and wireline solutions, but also end-to-end, IP-optimized solutions for wireline and wireless service providers, and enterprise customers.'' Roth outlined his priorities for the new Nortel, telling employees that his top objective is to maintain the momentum of the merger, which was approved by Bay shareholders at a special meeting August 28, the final legal hurdle in a two-and-a-half month process that also included approval from North American and European regulatory bodies. ''This has been a merger in real time,'' said Roth. ''It's gratifying that we were able to complete it so quickly. The priority now is to move forward aggressively to successfully capitalize on the merger for the benefit of our customers.'' In describing how the merger fits with Nortel's strategic direction, Roth explained that it represents a ''continuation and acceleration of our game plan.'' ''With the merger and the associated organizational changes we're announcing today,'' he said, ''we've significantly stepped up and strengthened our attack plan, which is focused on delivering customer value in the converging telephony and internet marketplace. The new Nortel is aggressively moving forward with a powerful and expanded arsenal of network solutions for our service-provider and enterprise customers.'' He added: ''As part of our strategy we've been building strong capabilities far beyond our traditional strengths in digital switching -- for example, the development of across-the-board capabilities in wireless infrastructure solutions and top-of-class optical fiber transmission systems. Our merger with Bay broadens our competencies even further. The new Nortel now has nearly 15,000 employees with market-hardened packet-networking expertise. We are the clear leader when it comes to this critical competency of the future.'' House noted that given today's diverse customer network requirements, Nortel is the first company to offer both enterprises and service providers across-the-board expertise in every major communications technology, including Internet Protocol (IP), frame-relay, Asynchronous Transfer Mode (ATM), circuit-switching, broadband and narrowband wireless, and high-speed optical networking. ''This is a new class of company for a new class of network,'' he said. ''As our customers make the transition with data networks and IP, our task is to keep them competitive by unifying the different technologies and solutions. Our intention is to provide the best of all worlds -- to enable customers to operate legacy and emerging networks and technologies as if they were one seamless network.'' Unified Networks House described how the merger of Nortel and Bay Networks marks the launch of the new company's initiative to build the ''Unified Networks'' of the future. ''Unified Networks will allow businesses to reap the benefits of electronic commerce and the new digital economy spawned by the Internet,'' he said, explaining that today's electronic business world will be able to have secure, reliable, and scalable multimedia networks using diverse IP and telephony technologies. The new Nortel is uniquely equipped to deliver these solutions. A special combination is required -- the carrier-class resilience of traditional telecommunications networks and the flexibility and cost-effectiveness of data networks, all complemented by world-class service and support that only the new Nortel can deliver. ''Delivering Unified Networks requires a new class of company,'' House said. ''And the new Nortel is the only one in that class. It has a decade of field-proven IP and routing technology in mission-critical environments, unequalled channels to market, and the global capability to deliver unprecedented network design, support, and service. We're the only company with the breadth of product portfolio and technological expertise in the areas of corporate data networks, public data networks, corporate telephony networks, and public telephony networks.'' Customer-Focused Organization To reflect Nortel's focus on customers in the enterprise data, enterprise telephony, carrier data, and carrier telephony market segments, Roth and House announced the following realignment of the company's structure: - For the carrier data customer segment, Nortel is establishing a new Line of Business (LOB) called Carrier Packet Networks. This LOB will provide carriers and service providers globally with tailored solutions that encompass Nortel's industry-leading, high-capacity optical fiber transmission systems; high-end switched-routing platforms; frame-relay and ATM switching fabrics that feed into optical networks; and the incorporation of Dense Wavelength Division Multiplexing (DWDM) capabilities. The data-networking products and technology drawn from Bay Networks, Aptis Communications, Inc., and Avici Systems, Inc., are also being integrated into this business unit. Clarence Chandran, formerly president of Public Carrier Networks, becomes president of Carrier Packet Networks. The new organization, with employees located throughout North and South America, Europe, and Asia, will be headquartered in Billerica, MA, a suburb of Boston. - For the enterprise data networks customer segment, Nortel's Enterprise Data Networks LOB is being merged into the operations of Bay Networks to provide enterprise customers with a complete line of data networking products and services. This LOB, called Bay Networks, will be headquartered in Santa Clara, CA. Dave House becomes president and CEO of this organization in addition to his broader responsibilities as president of Nortel. - For the carrier telephony customer segment, a realigned Carrier Networks business unit has been formed to deliver Nortel's DMS family of digital switching systems and other carrier telephony solutions. Ian Craig, formerly president of Broadband Networks, becomes president of this LOB. Craig's responsibilities also include manufacturing operations for both Carrier Networks and Carrier Packet Networks, which are being consolidated under Chahram Bolouri, vice president, global operations. Similarly, Eric Ross, vice president, global services, will have expanded responsibilities for customers of both Carrier Networks and Carrier Packet Networks, with the goal of offering customers unified service for hybrid networks using both packet-switched and circuit-switched technology. - In serving and supporting the wireless carrier and enterprise voice customer segments, Nortel's LOBs have not changed. Matt Desch remains president of Wireless Networks, and James Long remains president of Enterprise Networks, which includes the company's PBX, key systems, and call center solutions. Both business units are headquartered in Richardson, TX. - Because customers today in each of these market segments are no longer making purchasing decisions based solely on the best technology, but also on factors such as market awareness and customer preference, the new Nortel is placing increased emphasis on its global corporate marketing. The company has appointed Bill Conner, previously president of Nortel's Enterprise Data Networks LOB, to the newly created position of executive vice president of marketing. Conner is responsible for providing strategic leadership around Nortel's global marketing, communications, and branding initiatives. Advertising Campaign The company today also launched a new global advertising campaign to familiarize customers with Nortel's new class of networks, new approach, and new capabilities. The campaign, which kicked off with major ads in leading newspapers and with web banners appearing on business and technology sites, will continue throughout September and beyond. Nortel works with customers worldwide to design, build, and deliver telecommunications and IP-optimized networks. Customers include public and private enterprises and institutions; Internet service providers; local, long-distance, cellular and PCS communications companies, cable television carriers, and utilities. Nortel's common shares are listed on the New York, Toronto, Montreal, Vancouver, and London stock exchanges. Nortel had 1997 revenues of US$15.5 billion and Bay Networks, a wholly owned subsidiary of Nortel, had revenues of US$2.4 billion during its most recent fiscal year. The combined company's workforce totals approximately 80,000 employees worldwide. SOURCE Northern Telecom Limited /CONTACT: Robert J. O'Brien, Nortel, 905-863-6250, rjobrien(at)nortel.com; Or visit Nortel's web-site at www.nortel.com; Nortel's press releases are also available through CNO-Call by fax at 800-758-5804, ext. 122158 or at prnewswire.com /Company News On-Call: prnewswire.com or fax at 800-758-5804, ext. 122158/ /Web-site: nortel.com (NTL. NT) Headlines Previous Story Next Story NTL. NT %TLS V%PRN P%PRN

To: Bindusagar Reddy who wrote (53577)	9/2/1998 3:00:00 AM
From: djane	Respond to of 61433

SmartMoney. NETWORK BARGAINS? smartmoney.com IT IS emblematic of this manic-depressive market that shares of Cisco Systems (CSCO), one of the premier companies of our time, were tossed around like some obsolete circuit board. On Monday, Cisco's stock plunged 12 5/8 to 81 7/8 only to rebound 8 1/8 on Tuesday to end the day at 90. That's around what Cisco was trading at in late June -- which is fitting, because not much has changed for Cisco in the last two months or so though the gyrations of the market would lead you to believe otherwise. The question now facing investors, as columnist Jersey Gilbert points out, isn't Russia or even Japan, but whether the recent market selloff and a raft of economic statistics indicates a coming recession in the U.S. What you think is likely to happen will influence your investment decisions over the course of the next few months. A recession would obviously trigger a slowdown in spending by corporate America on the networking equipment that has been flying out of Cisco's warehouses over the past several quarters. But a market correction in the midst of a continuing economic expansion would be, as pundit Abby Cohen believes, a buying opportunity. Cisco and the other stocks in the communications universe, such as Lucent Technologies (LU), have been some of the worst offenders in terms of unreasonably high premiums this year, and Monday's bloodbath was perhaps just punishment for trailing price-to-earnings ratios of 60 and 93, respectively, for two companies with 30% secular growth rates. But according to analysts, the premium prices these companies have enjoyed all year are a result of the especially strong spending this year by businesses, and by telephone companies such as Sprint (FON), which are upgrading their networks with asynchronous transfer mode and Ethernet gear. Chris Stix, networking analyst with SG Cowen & Co., agrees the fundamental health of the networking industry and of information technology (or IT) spending is still strong. "The fundamentals are strong this fall, not for every player, but in general they're good." Stix points to the fast Ethernet cycle as a very strong area of IT spending -- especially with the move from 10 megabits per second Ethernet switching to flexible 10 and 100mbps switching -- as well as new layer 3 switches, which he expects will be popular with customers. Musing on the concern over slowing spending, he notes that the Chicago purchasing managers index was down Monday, but he says that measure has little to do with networking. "That's a typical rust-belt spending indicator; it has nothing to do with networking." Analysts were quick to talk up their favorites amid the gloom. Eric Buck with Donaldson, Lufkin & Jenrette likes the two cable box suppliers who are selling digital Internet receivers for your television to TCI (TCOMA), namely General Instrument (GIC) and Scientific Atlanta (SFA). Buck also likes ADC Telecommunications (ADCT) and Tellabs (TLAB). George Kelley with Morgan Stanley is looking for companies with good earnings visibility that will bounce back when the market reaches a bottom. "We say, let's pick the good companies and wait for some sentiment that says we're at a bottom, and then we're going to have a field day," says Kelley. Paul Weinstein, an analyst at CS First Boston, calls 3Com (COMS) "the best turnaround" story, based on the fact that the company seems to have fixed problems that had prevented it from turning out product in a timely fashion. 3Com has dropped 23% in the past week and it is almost 60% off its 52-week high of 56. "Now we've got a modem standard," Weinstein says of the truce brokered between Rockwell (ROK) and 3Com's U.S. Robotics unit, both of which produce 56 kilobit per second modems. "That's going to help stabilize [modem] pricing, which is going to help operating margins," Weinstein says. "And expectations are so low at this point [for 3Com], if you improve operating margins, it's going to drive the stock higher." Reason to look forward to the third quarter, perhaps. Chipmaker Broadcom (BRCM) gets two votes from the analyst community as the company with perhaps the most exciting story to tell in networking -- after Cisco, of course. The company went public this past April at 62, a 158% jump from its offer price of 24. At today's price of 54, it's still double that IPO price, of course, and 83 times this year's projected earnings of 65 cents a share. Broadcom is developing chips not only for cable modems, but also for high-speed digital phone technology, dubbed digital subscriber line, while it currently cleans up in the Ethernet networking market. "Broadcom has the best fundamentals, in terms of multiple markets that are all going in the right direction. It's such an electric company," says Kelley. He notes that Morgan Stanley considered Broadcom too expensive at its offering price, but that he started a recommendation three weeks ago at 58 and thinks it's a steal any lower than that. "If you believe in the Internet and in cable modems, this is the company for you," he says. Smaller stocks such as MRV Communications (MRVC) and Xylan (XYLN) are somewhat more of a wild card, say networking analysts. "Smaller stocks are more of a challenge," says Stix, "because they tend to have more retail holdings." Unlike Cisco, Xylan and MRV are falling despite having fallen at points throughout the year. Nonetheless, Kelley is one of those who is bullish on the specific fundamentals of Xylan. "They've got a nice business, good visibility, good partners. It's just really cheap," at today's price of 15 1/4, or just under 15 times next year's projected earnings per share of $1.12. "And, it's got a 10 million share short position," says Kelley. "I think when this stock rebounds, the shorts in it are going to say 'Look, it doesn't get much better than 15,' and they'll rush to cover their positions, says Kelley. Though it's not a networking equipment stock, Kelley recommends Aspect Telecom (ASPT), a maker of computer telephony software that allows corporations to set up call centers. "Earnings visibility is excellent with this company. Management knows most of what's going to happen in the next couple of quarters," says Kelley, meaning capital spending surprises should be minimal for Aspect. Of course there's another factor to keep in mind and that's the dividend discount. The dividend discount principle says that in a market with record low inflation and robust growth, still true of the U.S. economy at this moment, the payoff from the bond market is going to be relatively low relative to the risks of investing in that market. This means there's going to be a natural premium attached to individual equities that can be expected to offer a much greater payoff. It's another way of saying that if there are no visible signs of drastic economic slowdown, the market will ultimately return to prizing companies for their strong fundamentals. We'd expect companies like Cisco to have that kind of invulnerable premium, at some level, while companies such as Intel, under a cloud right now regarding its long-term profitability, ought to enjoy less of a premium P/E. Cowen's Stix agrees the premiums are still very high, but he thinks the fundamentals at Cisco are so strong that the company deserves it. He also thinks the selloff of Ascend Communications (ASND), down 57% in the past week and trading Monday at 29 times this year's projected earnings of $1.20 per share, is excessive. "With Ascend, the correction's way too large at this point. I certainly think it's got 50% [to grow] from here." Ascend was up 2% today at 36. Morgan Stanley's Kelley still thinks many of the hottest stocks are cheap. He thinks MMC Networks (MMCN) has the momentum in silicon switches, being a young company with a stronger focus than larger, more established chipmakers. "They're working 16 hours a day," Kelley says of MMC. "While some of their competitors are working far less. They've got those stock options to incentivize them." Perhaps there was less of an incentive yesterday. MMC was trading down 16% yesterday, to 16.75, still 60 times this year's expected earnings of 28 cents per share, and 418 times last year's earnings of 4 cents per share. Kelley thinks the upside on Broadcom means its premium is also reasonable. "The market will assign this company a very high P/E," because investors know it's impossible to calibrate the real future earnings potential, Kelley says of Broadcom. Given that the growth is expected to be so high going forward, he says, "the P/E that looks like it's 60 really is probably only 40 times" future earnings. Even for companies with the strongest fundamentals, there's enough cushion left in the stocks' valuations that it's difficult to call a bottom just yet and easy to be worried about a further drop should signs of recession materialize. "There isn't anything in terms of core asset value that you could point to," with respect to many networking stocks, says DLJ's Buck. "In order to say, 'Hey, these guys can't sell below that [price].' At least not until these stocks go much lower down than they are today." -- By Tiernan Ray << STOCK UPDATE ARCHIVE

To: Bindusagar Reddy who wrote (53577)	9/2/1998 3:03:00 AM
From: djane	Read Replies (1) \| Respond to of 61433

Lucent Integrates Data and Voice Networks with Switching Enhancement Tuesday September 1, 3:12 pm Eastern Time Company Press Release SOURCE: Lucent Technologies 5ESS(R) AnyMedia(TM) Switch evolves to include ATM/IP capabilities LISLE, Ill., Sept. 1 /PRNewswire/ -- Service providers' quest to converge their data and voice networks just got easier with a new switching enhancement from Lucent Technologies announced today. Now communication service providers can offer the latest data services while building on their vast investment in equipment for the public telephone network. With this latest switch evolution, Lucent's 5ESS(R) AnyMedia(TM) Switch, which currently connects more than one hundred million lines to the public network, combines voice networks with data networks. Service providers can offer data services from the highly reliable switching systems they already manage and maintain, generating new revenue and bundling voice and data services, without the expense or trouble of introducing brand new network elements. Lucent's new switch module, called the AnyMedia(TM) MultiService Module, or MSM, is integrated in the 5ESS Switch, allowing it to connect to data networks such as those based on Asynchronous Transfer Mode (ATM) or Internet Protocol (IP). With the MSM, providers can offer data services including modem pooling, voice over the Internet or ATM, Internet access, xDSL, frame relay, or private line data-all bundled with full featured, reliable voice services. ''To meet today's revolution to data services, we've created an evolution of our 5ESS Switch,'' said Frank D'Amelio, vice president of product management and marketing for Lucent's Switching and Access Solutions group. ''By constantly enhancing the switch, we're helping service providers prepare for the future while protecting their investments.'' The voice-over-ATM feature can lower network costs by putting voice traffic onto the service provider's ATM backbone data network. The MSM's modem pooling feature allows the numerous and unpredictable calls to Internet service providers (ISPs) today to terminate on the 5ESS Switch, rather than the ISPs' facilities. These are attractive features for service providers to offer to their customers because they generate revenue using existing and highly reliable equipment. The 5ESS Switch is the industry's most reliable switch and has set new industry performance benchmarks according to analysis of the most recent Federal Communications Commission quality report. The MSM also enables service providers to offer data aggregation, which is attractive to large customers because it simplifies switch interfaces. Rather than having two separate pipes from the switch-one for voice and one for data-only one large pipe is needed. Another feature is data network interworking, which allows circuit and IP/ATM networks to work together seamlessly. This is necessary since voice networks move traffic in circuits and data networks move traffic in packets. With the MSM, the 5ESS Switch now becomes a bridge between voice and data networks, efficiently moving voice traffic and voice-related services over networks designed for data. This integrated switch module avoids ''front-ending'' the switch with an additional box that must be managed separately. Having only one network to maintain is much more cost-efficient and less risky for service providers than adding multiple network elements. Lucent's MSM simplifies voice-data convergence by moving many small pipes into a few large pipes, which lessens trunk demands, reduces operations and training costs, and overall, decreases total cost of ownership. This simplified approach relieves congestion on the trunk side of the switch, a problem in many networks today. The MSM is built to industry standards, with open interfaces, and will be available in the U.S. in the fourth quarter, 1998, and outside the U.S. in 1999. The MSM reflects advances in Lucent research and development as well as Lucent incorporating technology from recent data networking acquisitions. For example, its ATM switching function is provided by MultiService Switch 1000 (MX 1000) technology, which was developed by Bell Labs. Its modem pooling feature is based on Portmaster(TM) 4 technology, which became part of Lucent's data networking portfolio via the acquisition of Livingston Enterprises in December 1997. Similarly, the MSM's ability to adapt Time Division Multiplexing (TDM) into ATM and its ATM access concentration are provided via the PathStar(TM) Access Concentrator 120, which comes to Lucent via the acquisition of Yurie Systems in May of this year. These technology assets will be fully integrated into the 5ESS Switch and managed via a single operations, administration, management and provisioning system. Lucent Technologies, headquartered in Murray Hill, New Jersey, designs, builds and delivers a wide range of public and private networks, communications systems and software, data networking systems, business telephone systems and microelectronics components. Bell Laboratories is the research and development arm for the company. For more information on Lucent Technologies, visit the company's web site at lucent.com. SOURCE: Lucent Technologies More Quotes and News: Lucent Technologies Inc (NYSE:LU - news) Related News Categories: networking, telecom Help Copyright c 1998 PRNewswire. All rights reserved.

To: Bindusagar Reddy who wrote (53577)	9/2/1998 3:14:00 AM
From: djane	Read Replies (2) \| Respond to of 61433

Lashinsky tries to be Herb Greenberg once again... [ASND references] sjmercury.com Posted at 10:14 p.m. PDT Tuesday, September 1, 1998 Tech stocks' outlook varies Companies come in various shapes, size, degrees of risk. BY ADAM LASHINSKY Mercury News Staff Writer ASKING how ''tech stocks'' are doing is somewhat akin to inquiring about the weather in the Bay Area. Sure, it's late summer going on fall all over, but San Jose's dry heat bears little resemblance to San Francisco's cold, rolling fog. Similarly, Internet leader Yahoo Inc. (Nasdaq, YHOO) and top chip maker Intel Corp. (Nasdaq, INTC) -- headquartered nearly cheek-by-jowl in the heart of Silicon Valley -- bear about as much resemblance to each other as the climates in the two aforementioned cities. With that in mind -- and with the flip-flopping of all kinds of stocks in recent weeks -- it's a good time for a broad check on the ''tech sector'' to see where it's been and where it's going. Investment analysts seem to agree that ''tech'' is a great place to put one's money over the long haul. And the various sectors are interconnected, of course. Woes in semiconductor equipment are a direct result of the slowdown in chips, for example. But as the following partial review makes clear, technology companies come in such different shapes and sizes that investors must consider each group before deciding where and when to plunk down their money. COMMUNICATIONS: There are basically two kinds of communications equipment companies in and around Silicon Valley: Cisco Systems Inc. (Nasdaq, CSCO) and everyone else. All the companies in the sector supply various parts of the ''plumbing'' that run computer networks. The biggest difference between Cisco and its competitors, such as 3Com Corp. (Nasdaq, COMS), Bay Networks Inc. (Nasdaq, BAY) and Ascend Communications Inc. (Nasdaq, ASND), is that the others all have tripped over falling prices and difficult acquisitions and Cisco hasn't. ''It varies so much,'' says Paul J. Weinstein, who follows the sector for Credit Suisse First Boston Corp. in San Francisco. ''If you take Cisco out of the mix, they've all been struggling with lower price points.'' And that's led to slower growth rates and falling stocks. 3Com, for example has lost 27 percent of its value this year while the broad stock market, after Tuesday's bounce, is hovering around where it started. If the sector's stocks are good buys now, and Weinstein generally thinks they are, it's because investors have adjusted their perceptions of how quickly the growth will come. ''We're at a point where we went through this inflection where 50 percent growth became 15 percent growth,'' says Weinstein. ''Now people are much more grounded in reality. People's expectation have come down.'' Weinstein still has concerns. Larger economic woes won't spare networking stocks. And if network operators and phone companies slow the pace of conversion to new technologies, equipment companies will suffer. ''If there's one thing that's not going to change, it's the pace of acquisitions,'' adds Weinstein. And that makes any company with strong products a potential takeover candidate. Any company but Cisco, that is. INTERNET: No tech sector has attracted more investor interest than ''the Internet,'' that love-'em/hate-'em catch-all phrase that encompasses everything from new search-engine directory companies to software concerns specializing in the Web. What unites Internet companies in 1998 has been a lack of profits, explosive initial public offerings and valuations that are so different from those of companies in other industries that analysts have scrambled for new models to justify them. Over the past few days, though, Internet stocks have gotten their comeuppance, giving investors new opportunities to pick winners and losers. ''Generally speaking, the ones that will come back first are the ones that are profitable,'' says Steven R. Horen, who tracks the sector for NationsBanc Montgomery Securities Inc. in San Francisco. ''Having said that, if we have more down days, they will give up their gains. I have no doubt about that.'' For example, one of the first ''Internet'' stocks Horen noticed rebounding Tuesday was Intuit Inc. (Nasdaq, INTU), slaughtered Monday and up 17 percent Tuesday. The company makes money and has a solid business, notes Horen. As for unprofitable start-ups and even publicly traded Internet companies -- so plentiful that cartoonist Gary Trudeau has taken to parodying one in his ''Doonsebury'' strip -- Horen applies a similar gauge. ''The companies that are expected to break even soonest will be the ones that will come back first,'' he says. ''In terms of IPOs, the clearest statement you can make about building a defensible franchise, the easier it will be to bring public a company that is not yet profitable.'' Horen's not a long-term fan of search-engine stocks, but does think they remain takeover candidates for media companies. Says he: ''If you're investing in those companies, that's your play.'' PERIPHERALS: With the possible exception of semiconductor capital equipment, no sector has been buffeted like disk drives for personal computers. Unlike Cisco in networking or Microsoft Corp. (Nasdaq, MSFT) in software, there is no drive maker whose stock hasn't taken it on the chin. The explanation is familiar: Clogged inventories. But the disk-drive sector alone has a ''leader'' in Seagate Technology Inc. (NYSE, SEG) that has lagged its competitors in bringing products to market. Its efforts at maintaining market share socked the industry at a tough time. ''The biggest change in the last year was when Seagate -- which was the only company that had raised money at that point -- went to war over pricing,'' asserts Bruce S. Seltzer, an independent analyst specializing in disk drives. There were other factors, of course. ''PC makers also decided they wanted less capacity, not more,'' Seltzer explains. ''They were more concerned with cost than performance.'' Seltzer, who advises institutional investors on the sector, isn't optimistic for a near-term turnaround. ''Traditionally inventory cycles have taken three to four quarters to clear,'' he says. ''This one looks like it's taking longer.'' There's a chance, he says, that holiday purchases of PCs could rejuvenate the drive makers. As the first quarter is typically slow, though, a poor Christmas would mean drives might not recover until summertime. SOFTWARE: If any sector hummed along seemingly without a care in the world it was enterprise software, the products for which big businesses pay big bucks to help manage their operations. That, too, has changed over the last year, first when Oracle Corp. (Nasdaq, ORCL) reported sharply slowing growth and later when stalwarts like SAP AG (NYSE, SAP) and PeopleSoft Inc. (Nasdaq, PSFT) said robust growth might simmer. A prime culprit has been ''Y2K displacement,'' spending to fix problems of the computer millennium bug instead of on new applications or databases. ''Because there are some companies that have missed numbers and because there's been some slowing of growth, there's been some fear in this sector,'' notes software analyst Brian E. Skiba of Lehman Bros. Inc. in San Francisco. There are bright spots -- and companies with bright prospects -- says Skiba. Systems-management software makers like Legato Systems Inc. (Nasdaq, LGTO) have ''improving fundamentals,'' he says. But in general, Skiba believes ''the big are getting bigger and stronger, and the laggards are lagging more.'' Interestingly, though Skiba remains cautious on Oracle -- whose stock is back to where it was when it collapsed at the beginning of the year -- he finds reason for hope. To wit, the company's ''tough comparisons'' will end after its current quarter, the last in which Wall Street will measure Oracle against its year-ago high-flying self. ''The game is not over,'' Skiba says. ''But it comes down to execution for them. They're big enough that they're not going to go out of business.'' Damning with faint praise, perhaps. But also a possible early indication of an eventual turnaround. SEMICONDUCTORS: To grasp how semiconductor stocks have fared in the tech sell-off, look no further than the see-sawing of industry leader Intel. After charging forward for much of the decade, Intel's stock has been stuck between $70 and $100 since the middle of last year. The reasons: falling prices, industry overcapacity and slowing growth in personal computers. To some, like Intel bull Mark Edelstone of Morgan Stanley Dean Witter Inc. in San Francisco, the negative factors have about run their course. Most important, Edelstone believes, excess global capacity has passed its worst point. As chip makers have drastically reduced their capital spending, the time will come in late 1999 or 2000 when chip supplies run short. ''In the second half of 1999 you'll see a much more benign pricing environment,'' says Edelstone, meaning chip manufacturers will be able to charge more. If that seems like a long time away, Edelstone has an answer: ''If you wait 'til then, it's too late.'' Among the improvements Edelstone discerns in the semiconductor environment is the indication that PC makers have cleared out their excess capacity. That means new computers -- assuming consumers want to buy them -- will require new chips. ''The worst of the excess capacity problem was in the second quarter,'' and as that situation improves ''the company that benefits the most is Intel.'' Contact Adam Lashinsky at the San Jose Mercury News, 750 Ridder Park Drive, San Jose, Calif. 95190, or siliconstreet@sjmercury.com or (408) 271-3782. c1997 - 1998 Mercury Center. The information you receive online from Mercury Center is protected by the copyright laws of the United States. The copyright laws prohibit any copying, redistributing, retransmitting, or repurposing of any copyright-protected material.