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

To: MMW who wrote (54208)	9/16/1998 1:32:00 AM
From: djane	Read Replies (4) \| Respond to of 61433

WSJ. Juniper's New-Router Shipments Kick Off Race in Internet Devices September 16, 1998 By LEE GOMES Staff Reporter of THE WALL STREET JOURNAL A closely watched Silicon Valley computer networking company has shipped its first product, kicking off a race to provide the next generation of the Internet connection devices known as routers. Juniper Networks Inc. of Mountain View, Calif., said that its new M40 router is at least 10 times as fast as the speediest devices from such industry leaders as Cisco Systems Inc. Juniper's devices cost hundreds of thousands of dollars each, and are meant to be used by telecommunications companies, Internet service providers and others along what is called the "backbone" of the Internet. Routers help transmit information through computer networks, and ever-faster routers are viewed as a key to allowing the Internet to continue growing. And they are considered especially important if the Internet is to transmit voice and even video signals, as is now beginning to occur. Broad Backing Juniper is being closely followed because many of its engineers are from Cisco, and because it has attracted backing from a number of prominent companies, including AT&T Corp., Lucent Technologies Inc., Northern Telecom Ltd., 3Com Corp. and Worldcom Inc.'s UUNET Technologies. Juniper is also getting help from International Business Machines Corp. in the design of the specialized chips it uses inside its routers. Those investments in Juniper were seen, in large part, as defensive moves against Cisco's growing market power. Cisco's market share in Internet routers, for example, is estimated at nearly 70%, and it is developing routers that can also carry digital telephone calls over the Internet. Cisco said it hadn't any comment on Juniper's new product. Juniper created a considerable buzz in networking circles when it disclosed its plans last year. Since then, though, the market for superfast routers has become a very crowded one, as a number of other start-up companies have announced plans for their own devices, some of which are promised to be even faster than Juniper's. Indeed, some of Juniper's backers, including Lucent and Northern Telecom, are hedging their bets by developing their own products in-house, or by also investing in other start-ups. There was also concern that Juniper was late with its product development. Devices Are Evaluated Tuesday, Juniper's chief executive officer, Scott Kriens, said that UUNet as well as WorldCom's MCI Communications Corp. unit were evaluating its devices. He also said his company, in contrast to competitors that are still in the planning stages, is prepared to ship its routers in volume. While superfast routers are expected to proliferate over the Internet, industry analysts say companies like Juniper may find it a tough go in competing against the likes of Cisco or Ascend Communications Inc. Those companies often win sales not because their products are the fastest, but because of the high-level ties they develop with big accounts. "It's very hard to penetrate this marketplace," said Nick Lippis, of Strategic Networks in Rockland, Mass. "The big players can do a lot of creative things to limit your growth." What's more, Cisco and the others can easily buy one of the start-ups, as they have often done before. Indeed, Cisco Tuesday said it would acquire closely held Clarity Wireless Corp. of Belmont, Calif., a maker of wireless communication equipment, for $157 million in stock. Mr. Kriens said, however, that the Internet is growing fast enough to provide market opportunities for established players as well as new companies like his own. "This is not a zero-sum game," he said. Return to top of page \| Format for printing Copyright c 1998 Dow Jones & Company, Inc. All Rights Reserved.

To: MMW who wrote (54208)	9/16/1998 1:35:00 AM
From: djane	Respond to of 61433

WSJ. Analysts Debate What's Next For Humbled Tellabs, Ciena [ASND references] September 15, 1998 By NICK WINGFIELD THE WALL STREET JOURNAL INTERACTIVE EDITION SAN FRANCISCO -- Now that their proposed marriage has crumbled after a month of turmoil, where do Tellabs and Ciena go from here? On Tuesday, shares of Tellabs rebounded slightly, while Ciena was flat, after both were hammered Monday. Shares of Tellabs rose 3 9/16, or 6%, to 41 1/4 on heavy Nasdaq Stock Market trading, after dropping 16% Monday. Ciena slipped 3/16 to 13 on Nasdaq, after falling 17% the previous session. Meanwhile, the Nasdaq Composite Index added 12.42 to 1678.11, while Morgan Stanley's high-tech 35 index rose 3.22 to 557.52. The big drops in Ciena and Tellabs' shares came after the two telecommunications-equipment firms called off their merger deal, which would have had Tellabs acquire the smaller company for about $3.98 billion in stock. The deal started to come unhinged last month after Ciena warned of disappointing third-quarter results and said that AT&T, a major customer, wouldn't give it a key contract. A precipitous decline in Ciena's stock forced the companies in late August to revise Tellabs' earlier $6.9 billion bid for the company. As the deal fell apart Monday, Tellabs also warned that its third-quarter earnings would be flat with second-quarter results, while Ciena warned that its fourth-quarter revenue would be "materially below" third-quarter levels. Although the deal's demise was a major embarrassment for both parties, Wall Street analysts don't believe it will squelch other acquisitions or mergers for very long. Both companies are at the center of a rapid convergence between voice and data networking technologies that is leading to a flurry of dealmaking. Tellabs, a maker of gear that helps phone companies manage traffic on their networks, had hoped to use Ciena, a maker of "mulitplexing" hardware that boosts the capacity of fiber-optic networks, to offer a more complete set of products to customers -- part of a general consolidation that shows no signs of abating. In Tellabs' case, though, analysts believe the company will let the dust settle before making a major move again. "I would be absolutely shocked to see any major acquisitions announced before the end of the year," said Michael Neiberg, an analyst ING Barings Furman Selz. "The lesson that came out of this [failed deal] is they tried to take a big bite. My read is they feel a little bit burned," he said. Steven D. Levy, an analyst at Lehman Brothers, said he believes Tellabs will remain acquisitive, but agrees that the company will have other priorities in the near term. "If anything, they need to go in and repair their relationships with major shareholders who have not enjoyed this rollercoaster ride," said Mr. Levy. "I know that I did not find it particularly entertaining," he said. On Tuesday, Mr. Levy revised his 12-month price target for Tellabs' stock to $75 from $100 because of the deal's demise and the broader turmoil in the stock market. Analysts said Tellabs could potentially partner or acquire a number of firms to bolster its product lineup. Jim Kedersha, an analyst at SG Cowen Securities, said the Lisle, Ill., company could look to do a deal with a maker of high-speed asynchronous transfer mode, or ATM, switching equipment, such as Ascend Communications, Fore Systems or Newbridge Networks, or a maker of telecommunications access equipment like Advanced Fiber Communications. Tellabs could also choose to consider another pure-play multiplexing company, such as closely held Canadian firm Cambrian Systems, analysts said. "Tellabs had put out this idea they wanted to be a top-three player" in the networking arena, said Mr. Kedersha. "If they're going to do that, they need to play in other areas." For Ciena, the need to find a partner may be even more urgent. Published reports have already suggested the Ciena could be a takeover target for Ascend. "They can't make it on their own," said Greg Mesniaeff, an analyst at Robinson-Humphrey Co. "They don't have the critical mass in terms of size and the talent pool of people who can do software development and systems-integration work." Tuesday's Market Activity Elsewhere in the technology sector Tuesday, Solectron gained 6 1/16 to 49 9/16 on the New York Stock Exchange. Solectron, which provides manufacturing services to electronic-equipment companies, posted stronger-than-expected fiscal fourth-quarter earnings. Also, Robinson-Humphrey raised its rating on the stock to long-term "buy" from long-term "market perform." Northern Telecom slipped 2 1/2 to 43 3/4 on the Big Board. The Canadian telecom-gear giant said it was laying off about 3,500 workers, though none at recently acquired Bay Networks (see article). Cyberian Outpost added 11/16 to 7 7/16 on the Nasdaq Stock Market. The on-line retailer entered into a one-year sales and marketing agreement with Time Warner's Time New Media unit. Cyberian said it will be the exclusive computer hardware, software and peripheral retailer within key Pathfinder Network sites. Dassault Systemes added 9/16 to 42 1/8 on Nasdaq. BancAmerica Robertson Stephens raised its rating on the stock of the design-software company to "buy" from "long-term attractive." Write to Nick Wingfield at nick.wingfield@news.wsj.com. Return to top of page \| Format for printing Copyright c 1998 Dow Jones & Company, Inc. All Rights Reserved.