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Technology Stocks : ZOOM : is the Best / Most Underpriced Stock on Nasdaq -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (2286)	10/13/1998 4:25:00 PM
From: shane forbes	Read Replies (1) \| Respond to of 2493

Zeev: I think your last sentence said it all - that is the fear here and it is justified IMHO. I certainly did not mean to imply that the fundamentals are great, however, I hope that we get something significant out of the video camera market within the next few quarters. I think this company and others like it will have slim pickings starting late Q2 1999 and late q3'99 when a good chunk of the people who wanted to upgrade to 56K would have already done so and the others will have newer computers with OEM 56K modems that it won't matter to them. What could lessen the impact during those months: ZOOM really needs some big time OEM deals to have a bigger presence in the market - OEM sales are not so volatile as retail - they were doing fine here until a few quarters ago and then doink the bottom fell out - maybe the LU chipset was meant to provide an entry into the OEM market? International sales - I believe the adoption rates in most other countries is much slower than the US and that in general there is about a 1 year lag in peak sales volume between the US and the ROW. Video Cameras - I think this will be big but the volumes are still very tiny to make a big difference. The key is that this will not be a OEM product in $1,000 PCs for awhile and that gives these companies a window of opportunity. v.91 - There's a new "digital" standard that I believe is coming out early next year that might spur sales (speeds to 64k) [added - see link below] chipset shortage - Yup that would be the answer to all of life's problems! There's an article I read somewhere stating that the fundamental problem this year has really been the excess inventory of around 6 million modem chipsets and the flat growth rate in internet lines connections (24 million or so). According to him next year there will be 30 million lines added next year and further that once the excess has been absorbed (we are pretty much there now) that next year we will be seeing a doubling in unit volumes of chipsets - a very good thing - the pundits in the US have indicated that this is the peak year for 56k chipsets, I believe. Ah! Found it: Check out "Big jump in 56k..." & "v.91" & "Rockwell plans to ship.." point-topic.com (which I got through 56k.com ) --- Then the next saga begins - DSL and cable modems - sometime late 1999 at the earliest and more likely early to mid-2000. That will be BOOM time for these guys since those DSL modems certainly won't be OEM products for quite a long time after they are introduced. The question is who will make it that far. From a Datquest report as of 1997, the top players were: 3COM Diamond Hayes Boca ZOOM Multitech Motorola A recent Dataquest forecast said in 1999 there'd be 3COM and 2 others. So let's see who will make it. So far Motorola and Hayes are gone. I actually don't see much of Multitech and BOCA has weakened quite a bit (though GVIL will be good). So that leaves just Diamond and ZOOM as the 2nd tier players in retail. The rub here though is that people like Viking and Newcom are coming on quite strong (though Newcom is a fake company and they may soon be going kaput). The question is with say just 5 or 6 players at most and with ZOOM's bigger market share are things going to get better for this sad group? My sense is that there is a chance we could get lucky and prices will hold and the market will not shrink dramatically (because of the OEM modems). But that is quite a number of ifs and it is understandable that the market is assuming that it just won't play out well for these companies. ---- Shane.