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Technology Stocks : Ciena (CIEN) -- Ignore unavailable to you. Want to Upgrade?

To: Larry Brew who wrote (2813)	9/9/1998 8:45:00 PM
From: Sam Citron	Read Replies (2) \| Respond to of 12623

Why orders are being cancelled? As the industry evolves, what you end up selling is cards that you simply drop in when needed to boost capacity. This kind of capacity is simply not yet needed. It is for the future. The network must be built in a certain way to be able to make use of the DWDM technology, but few networks at this point need their capacity increased 16-fold, except perhaps on Mother's day (and by then, if the industry responds rationally, you will be able to rent it for a day) <g> Thus there is no compelling need at this point for the telecoms to place the orders, except as trials to see that it works. Like any new technology, the learning curve is swift and steep, with precipitous drops in costs and prices. And yes, at some point, DWDM equipment becomes standardized like any commodity. So why buy now at a high price, when you don't yet need it, when you can buy all you want later at a Moore's law discount. LU has basically said this all along, while CIEN was bragging last year about selling the first 32 wave system and LU was happily selling 8s (even after it demonstrated a 256 wave system in the lab) "Our customers are happy to buy a scalable 8 wave system," LU said. They just don't need so much spare capacity at present. We are not yet at the stage where millions of people are downloading the Titanic on the internet. If you can get a free test on a 64 or a 128, you would be a fool not to take it. But you would be a fool to place an order now unless you really needed it. Sam