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Technology Stocks : PairGain Technologies -- Ignore unavailable to you. Want to Upgrade?

To: bill c. who wrote (28199)	1/27/1999 8:41:00 PM
From: Emile Vidrine	Read Replies (1) \| Respond to of 36349

I consider this cc the most positive in the last twelve months. Their new business model is sound and should reverse margin and sales decline in the next two Qs. Pair is positioned to continue to produce positive dollars while they compete for a piece of the huge xDSL market with AVIDIA, Falcon Chip, and HDSL2. IMO, Pair will get a significant piece of the high bandwidth pie in 99, 2000 and beyond. Emile

To: bill c. who wrote (28199)	1/27/1999 11:23:00 PM
From: Daniel G. DeBusschere	Read Replies (1) \| Respond to of 36349

Gross margins did not get hit as bad as unit price- ********************** (from 4Q financial statement) "Although unit shipments of the Company's T1/E1 access products were 30% higher than the prior year quarter, revenues from those products declined 27%, reflecting significant price competition over the last 15 months. Gross margins were 42.0% in Q4 1998 and 48.2% for the full year 1998 compared to 49.8% and 49.5% in the comparable 1997 periods. This reduction was also due to the effect of T1/E1 price erosion." ********************* If revenue declines 27% and unit shipments increase 30% then this is an effective hit of 57% on average selling price. Gross margins fell from 50% to 42%; therefore, it looks like they got smarter and better at manufacturing. Is my finding correct?