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Technology Stocks : Ciena (CIEN) -- Ignore unavailable to you. Want to Upgrade?

To: gbh who wrote (5898)	12/14/1998 2:15:00 PM
From: John M. Gelnieau	Respond to of 12623

<Actually, I do like the fact that he hasn't sold stock (I'll take your word on this point). But given the price erosion taking place in the WDM and DWDM market, it just seems obvious to me that technology will not win in this market. DWDM will simply be sold as a piece of a total network solution, and that puts players as NT and LU at an advantage.> Technology will win when the economics are jsutifiable. Your positioning of NT and LU are correct at themoment; however, if I were CSCO and TLAB this would be as bothersome and concerning to me as it is to CIEN. Therefore, I would expect the competitive realities to settle in for CIEN, CSCO, and TLAB. All CIEN needs is sales to drive up units. Driving units will lower fixed cost and improve margin on CIEN products and allow for lower pricing to be competitve. Customers get state-of-art and price which positions CIEN better. Also, CIEN gets positioned for metro-based infrastructure rollouts coming next. How do CIEN get units up? Work out deal with major that has sales force, hugh installed base, and without question financial viability to compete with NT and LU. CSCO or TLAB fit the bill. You can bet that whatever happened to nix the TLAB/CIEN deal was dirty play. One way or another some real hot shots screwed these guys good. In some sense it was a blessing short term for TLAB holders because CIEN clearly would have been dilutive based on what we now know. Notwithstanding, TLAB/CIEN would have been a great leverage opportunity in the market. Only thing left is for CSCO, TLAB, CIEN and whoever else might be looking at this game is to reset expectations. Suitor will have to probably pay more than they want, and CIEN will have to take less. But, I do believe that this is one deal that makes sense when everyone can get past emotions of past 6 months and consider how to beat LU and NT in high stakes game of global enterprise network computing. The above comments, thoough my own, are probably worth no more than they cost.