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.

Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: Jack Jagernauth who wrote (6092)	11/3/1998 1:11:00 PM
From: JZGalt	Respond to of 18928

Jack wrote: Regarding that technology, would the 'cable vs. phone lines' battle affect their future prospects in any way, or is it irrelevant? Good question. The short answer is no, the long answer I don't think so, ;-) What you are talking about is how the individual user hooks up to the internet. The majority of people now dial in via a phone line over up to 56kb modems to their local ISP. In the past year, two emerging technologies have started to battle it out. The first is the cable modem hookup, and the second is xDSL technology. The cable modem stuff is relatively straightforward and is dominated by BRCM (which explains some of that hefty p/e ratio). This technology comes into the users house just like cable TV. Since the cable TV companies want to provide more than TV products they are willing to spend money to get into your house with another product. [They also want to sell you phone service.] The second technology is a bit older. It tries to speed up the transmission speeds between the phone company's substation, over the copper wires and your house. This is sometime refered to as "last mile" technology. This should have been the next step after modems hit their maximum ratings, yet it requires that the phone companies spend money at the local level. Since the phone companies hold a monopoly, their spending habits are dictated more by immediate return on investment vs. expanding a market. [Why provide a better service, cannibalize your own ISDN customer base and incur enormous costs for minimal gain]. Bell Atlantic is now rolling out some ASDL technology with it's latest expansion. So what does this all mean? There is going to be a huge battle for the type of service that goes from the company providers to the end user (cable modems, regular modems, ADSL technology). I have no idea which will win. My cable TV goes out on a regular basis, so I'm not willing to switch at this point in time. What does this mean for PMCS? In the short run, nothing. PMCS does not compete in the market we were just talking about. Their products are used in moving data from one company to another over the internet backbone so any increase in the volume of traffic (no matter where it comes from benefits PMCS). If I can do an outline of a network: end user ... cable provider, or telco company (BRCM) .... ATM, SONET internet backbone (PMCS, VTSS, TXCC and also BRCM) .... cable provider, or telco company .... website or another end user As you can hopefully see, if BRCM gets revenues from their position in the cable modem market, then they will have the strength to cut into PMCS's market toward the core of the network. This is the long term danger to PMCS, but right now everything is expanding so rapidly it doesn't matter and PMCS has a dominant position. If I see a very good article outlining how the various companies fit into this mosaic, I will post the URL here, but to date most articles deal with the smaller subpieces allowing the reader to try to figure out how they fit together. Rumors flew yesterday about one xDSL technology provider. Check out the 5 day chart for PAIR (opened yesterday at 8 9/16 and closed at 13 5/8). Unfortunately I didn't own this one. ---- Dave PS. BRCM also makes ADSL products although the major portion of it's business is cable modems.

To: Jack Jagernauth who wrote (6092)	11/3/1998 1:31:00 PM
From: JZGalt	Read Replies (1) \| Respond to of 18928

Jack, Here are a few relevant articles. forbes.com forbes.com listen to some of the free RealPlayer recordings. The Bandwidth Blowout is relevant. forbes.com DSL dreams ---- Dave