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

To: pat mudge who wrote (55300)	10/6/1998 7:58:00 AM
From: gbh	Read Replies (3) \| Respond to of 61433

Pat, the "story" sounds good. What's your opinion on why the stock is past the toilet, and headed for the sewer? Is it still too much reliance to the top and bottom line on older TDM based products? I know the quarterly report sounds glowing, but the growth just hasn't been there. Gary

To: pat mudge who wrote (55300)	10/6/1998 1:58:00 PM
From: bucky89	Read Replies (2) \| Respond to of 61433

Could you give specific evidence when you suggest orders aren't coming in for NN's 36170? I never said anything of this sort! You seem to have completely missed my point. First of all, I wish you all the best in your Newbridge investment. Perhaps they will turn it around after their VIVID trainwreck. The 36170 is a tested product, and though it may not have the performance of the Ascend switches, it has been established and working for many years in many networks. It just hasn't been successful yet competing head-to-head against the newest switches from Ascend and maybe Fore. Having said that, I do have some serious reservations about Newbridge, and I offer these to counter-balance Newbridge's more attractive valuation compared to Ascend. Here's my prior post which you and Gary Korn had some objections to: Furthermore, Newbridge has not won a major new carrier contract for quite some time, I believe--most of their carrier customers were acquired years ago when the ATM market was in its infancy. The 90% of Newbridge's ATM revenues are from products that are more than three years old (i.e., the 36170)... Please note the key words "major new carrier contract". What I mean is a prominent large carrier with plenty of engineers and operational resources, and I did not have in mind carriers such as Telekom South Afrika. Note that only large carriers have engineering resources to adequately test and evaluate switches from multiple vendors. It is the major carrier major where performance and robustness matter. In smaller, lightly loaded networks, a carrier or enterprise can get away using a cheaper, poorer-performing solution. Furthermore, carrier customers are likely less demanding in places such as South Africa, and a network outtage is no big deal. But in the US and other industrialized areas, businesses depend very heavily on the networks supplied by their service providers. Just look at what happened to AT*T earlier this year. Newbridge is selling the 36170, yes, but look at to whom: To customers who already have Newbridge in their network (yes, the installed base is likely the biggest factor influencing a purchase decision!), and to smaller customers who do not have the demanding traffic loads and customer expectations that the major carriers do. That is what I see from my viewpoitn, and you are welcome to disagree. I agree with Mory's assessment of the future of networking--that there will be three, possibly four networking companies which will survive some significant upcoming industry consolidation. We all know who the first three are going to be (Cisco, Lucent & Nortel). If you're going to bet that there's going to be a fourth, then make sure it's the strongest player. IMO, Newbridge isn't the one. Lastly, as a word of caution I can think of another ATM company a few years ago that liked to make a big deal out of winning small contracts--General Datacomm (GDC). Once upon a time they had some success in Europe and an alliance with Lucent, but look at them now. Best regards, bucky89