red herring article on convergence & various replies.....
ed.
a long overdue thank you...
for your incisive
summary [ #reply-628544 ], along with
your other informational, and speculative musings
of late...i also agree with you:
"the last thing any of the large media supplier players needs is to see Ampex succeed in the digital video mass consumer market. Ampex's success renders these organization's capital planning meaningless."
and as to the bandwidth nightmare:
"In the meanwhile, the bandwidth solution may come from the wireless sector from something like the Paul Allen venture in satellite communications. This would bypass the infrastructural investments of the cable providers and the stranglehold of the communications industry suppliers."
and jubimer....
your DSRi analysis was excellent.
thank you for making it comprehensive, yet accessible.
i bookmarked the digital tv link.
and glenn,
<<Is anyone building a fully integrated solution? >>
your question resounds, doesn't it. and your posts have
focused with ed on the task before us in all its implications.
and sean...
please jump in more often.
the collaborative effort is alive & well here
thanks to disparate personalities and various realms
of expertise, yours included.
and hal....you are generous and candid with
your thorough knowledge of ampex in all its iterations,
providing earnest and valuable insight to all of us.
aahhh, i am sure i have more posts to address, but for now,
let me share this and return to replies later:
INVESTORS BET ON CONVERGENCE
By Peter D. Henig
Red Herring Online
November 9, 1998
Convergence is on its way and there's no stopping it.
Broadcom (BRCM) -- a communications circuit maker and a Red Herring darling -- announced on Monday that it has introduced a new graphics chip allowing television viewers to simultaneously view TV programs and Internet Web pages. With that, the convergence between computers and TVs is all but a lock.
"This breakthrough technology will cost-effectively allow consumers to view Internet content directly on their television," Broadcom president and chief executive Henry Nicholas said in a statement. "Our solution will allow viewers to watch television while they are surfing the Internet, checking email, monitoring additional television channels, or viewing on-screen programming guides."
The chip is designed for use in the new generation of cable TV set-top boxes that will allows users to control the displays on their TV screens like a computer, using multiple layered graphics and video windows.
Putting stock in convergence
If Wall Street is any indication of how this new technology will be received by the public, Broadcom could be well on its way to becoming the next Intel (INTC) or Cisco (CSCO).
Despite weakness due to a secondary offering and some selling by company executives, Broadcom's stock has soared in recent weeks. It's risen from $60 per share, when the market hit its October lows, to close at $92.50 per share on Monday.
"Simply by doing some silicon gymnastics, Broadcom was certainly rewarded if you look at their stock today," said David Simons, managing director with Digital Video Investments. "But it certainly puts the cart before the horse in terms of when the marketplace will be able to see anything about it."
Mr. Simons and other analysts note that the arrival of convergence -- while a huge potential boon for many in the cable, cable modem, and chip industries -- is still fairly uncertain. But this new chip, which creates a way for the couch potato to check his email, surf the Net, and watch the 'Niners all at the same time in different windows on the screen, could hasten the long-awaited rollout of digital set top boxes.
"It really is one of the final pieces of the puzzle which makes the digital set top box and the television act as one," said Rick Faust, analyst with Kaufman Brothers, L.P. "It eliminates the need for many people to have a PC, and really also eliminates the need for WebTV."
Sharing the wealth
Investors clearly took this announcement to mean that conversion's arrival is be imminent. As such, Broadcom's success could spill over into many other Internet plays.
Related companies on the software and e-commerce sides, like Spyglass (SPYG) which provides software to connect non-PC devices like televisions to the Web, or Yahoo (YHOO), which would conceivably benefit from millions more users connected to the Net, soared in active trading on Monday. Yahoo was up a whopping 11 3/16 to 164.75, while Spyglass traded up 16.5 percent to 17.25.
But it's Broadcom's own stock that continued to defy gravity, setting new highs even as analysts question whether the premium it's commanding is too rich.
"While I've always thought Broadcom's valuation was too high," said Mr. Faust, "it's able to hold this premium because it is serving a market with the highest growth in terms of advanced areas of communications, and it sits as a market leader right in the center of it."
In fact, with a price target of $100 and a Buy rating on the stock, Mr. Faust and the rest of his Broadcom brethren on the Street may soon have to be upping their expectations on the stock. Not that that's a hard argument for Mr. Faust to swallow.
"The company will continue to exceed expectations, and in hindsight, all of those expectations will prove to be too low," predicted Mr. Faust.
redherring.com |
