Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: pat mudge who wrote (4811)	10/27/1998 4:25:00 PM
From: Mr.Fun	Read Replies (4) \| Respond to of 21876

Pat, While Vertical Systems indeed published its report recently (my copy says September 30), the data used to determine market shares is CY1997 full year data. 1998 is only a projection. Dell'oro and Cahners INStat publish each quarter, about 3-4 weeks after Cisco announces. As such, the latest from these companies, published in August, is 6 months more current than Vertical Systems. IDC is further behind than Vertical System and is of little use. In talking to all of these market research organizations, one thing is clear, NN makes it very difficult to get an accurate count, consistently over-reporting product sales to the market researches vs. the #s shown in official earnings releases. This is not unusual - Cisco is probably the worst culprit. (If you add up the product by product sales reported by DataQuest for Cisco, you get a revenue number 114% of actual reported revenues). NN includes Mainstreet 3600 chassies with frame relay cards in its frame relay switch revenues - so be it. Generally, the industry considers Dell'oro's numbers to be the most accurate because she does the most digging to make sure there is no double counting, incorrectly categorized sales, etc.. Having worked closely with all of these vendors I would have to concur. In any case, its better than taking any of the vendors word for it. As far as the 7 of 7 I cited, many of the contracts you list are incumbent relationships where NN has gained an advantage through a history of service and through the switching costs of changing network management systems. This does not mean that they are not attractive contracts, just that they were not won in a technical bake off. In particular, the SBC and C&W contracts will be quite large over time I suspect. I also believe that the roster of clients Ascend has signed over the past year will deliver faster growth than those that NN has retained. But while I see Ascend as the best play in carrier ATM, NN is a clear number 2 with an attractive base of customers. Cisco is a distant #3. LMDS. I guess I am somewhat guilty of skepticism about the near-term market opportunity in LMDS and have discounted it somewhat. While licence holders will begin deployment, the total $ spent will depend on these new carriers finding a large market, and I am not so sure. NN and Cisco have made much stronger moves toward this market than Ascend. If you see this as adding significant revenues over the next 18 months then NN would certainly look more attractive. DWDM. Ascend was in fact the first to announce direct connectivity to DWDM and is now interoperable with Lucent, Ciena, Pirelli, NEC and Nortel, which together control over 95% of the market. Where NN comes out ahead is its interconnectivity with its own affiliate Cambrian, but metro area DWDM while an enormous opportunity, is a year away from major deployments. Ascend has long-haul DWDM connectivity working at Qwest, Frontier and Williams. I agree with you completely that this market will be large enough for both Ascend and NN to prosper. Good luck.

To: pat mudge who wrote (4811)	10/28/1998 10:29:00 AM
From: Techwatch	Read Replies (1) \| Respond to of 21876

Pat, regarding Vertical Systems Market Share results... I agree with you that their numbers can be considered accurate and recent. Mr. Fun's time frame is not correct. He was thinking that the time frame was CY97 when Vertical was really forecasting 1998. Their yearly reports are based on 1H actual shipment data and then they extrapulate 2H shipments based on extensive supply and demand side research. Sometimes it is difficult to forecast future shipments from vendors (As an example, I doubt if Vertical expected Fore's ATM sales to Service Providers to drop to $11.2 million in Q3 from $19.5 million in Q2.....and this downward trend was not reflected in Vertical's 1998 report published on 9/30. Similar unexpected downward or upward 2H98 trends could also happen to Newbridge, Ascend, Cisco, whoever) I also feel that Cahners in-stat and Dell'Oro, who both report on a quarterly basis, can be considered accurate and recent. As I have stated before, it is very important to look at the trends of market share gains and losses. If you were to look at Vertical Systems 1997 report you would find that they led the Carrier ATM segment with 36% and Ascend barely registered with 5.3% market share. In the course of one year Ascend gained 400% market share while Newbridge lost 30% (at least according to Vertical). Will this continue? Do we need to wait until September 30th of next year to find out? Not really, just look at more than one market sizing firm. Every market share firm slices the pie a little bit different and reports on different time frames. Once you find some common denominators you will find the trends within their reports to have some commonality. Let us know what you find in the Service Provider space.