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Technology Stocks : Orckit (ORCT) -- Ignore unavailable to you. Want to Upgrade?

To: IngotWeTrust who wrote (1517)	10/17/1998 7:08:00 PM
From: savolainen	Read Replies (1) \| Respond to of 1998

[cc notes] hi 9r, sounds like you're holding up ok...or at least you haven't lost your sense of humor ;) ... to supplement those already posted, some misc notes, "rough transcriptions", from the q3 cc (in no particular order): --- orctf seems to be shipping a lot of adsl product: "if you look at our adsl revenues starting from the beginning of 98: $1 million in q1, $3 million in q2, $7 million (7.4 actual-and did not include dt) in q3 .. this shows the situation of the market which is start(ing) to grow significantly... at the end of 97 there were about 3000 adsl lines total in the usa... today at the beginning of q4 orckit is shipping more than 5000 lines per month... " "once the customers start to get deliveries... actual quantities are exceeding their forcasts..." "..we sold much more adsl than we expected which did not help our bottom line..." --- other tenders including gpc and bel: "significant growth in the market both in the us and europe as we see it right now if you look around to the telecom co's around the world most of them are doing tenders... some of them are looking for second suppliers, some are looking third suppliers for the adsl... " "the gpc, the four rbocs which signed with alcatel two years ago, (are) looking for a second supplier, probably we will see it at the beginning of next year..." "opportunities and threats in regards to bell atlantic? bel atlantic is among the rbocs who are looking for a second supplier... for the dslam... it is ongoing process there... about the threat to orckit/gte? no effects and no impacts of the merger between bel and gte as related to the dslam... they are working right now as two independent co's.. you don't think the merger will prevent you from qualifying to be the second source? no i don't think it will prevent us... at at the end of the day all the rbocs will have two suppliers... when gte and bel formally merge we are going to be one of the suppliers.. Including dslam? yes" --- and interestingly, there are others besides dt, gte and telia who are currently deploying orctf adsl product- who will not allow orctf to announce: "majority of the shipments for deployment are in the realm of public domain.. we got the permission to mention it.. gte, dt, and telia of sweden... but there are more for deployment that we cannot mention the names of the customers..." --- eps for Q4 qtr will be worse than q3: "..sounds like you are saying that next qtr will be better than this qtr on eps ...i'm looking at the analysts numbers looks like they are predicting next qtr to be worse.. are you saying that the analysts numbers are low now? no i didn't say that... right now for the two big customers dt and gte it is still an environment of forward pricing.. this forward pricing will still be there in q4 .. now we didn't ship to dt in q3.. only in q4.. so when the volume is bigger and you have forward pricing the bottom line is worse.." --- some discussion of the new chipset: "can you quantify what this new chip will mean? on a per line cost basis for systems? i cannot give you a number but let me give you some guidelines... the new chipset will compose a significant portion maybe 30 maybe even 40% of cost per line... now everybody can imagine how much chip costs.. there is relationship? between the size of the chip and how much it costs.. it is usually in the size of 10's or 12's of dollars... since we own this chipset we are not going to pay any gross margins on it as most of our competitors are doing... we are talking about a very low cost per line... on top of it things are going to be very integrated... the cost of the atm and the frame relay.. are going to go down significantly... let me give you an example... if right now we have two modems per card and later on we will have 4 modems per card... it means that the cost of the atm and the frame relay is going to be half of the current cost... and on top of it we are going to reduce the cost of the atm and the frame relay itself... so all in all this a big breakthru, the new chip and this is what is going to make this business profitable for a long time..." (this last line is my favorite... hope they can get there from here.. :)) best wishes s