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To: VidiVici who wrote (41425)	5/23/1999 3:23:00 PM
From: jack montgomery	Respond to of 50808

Hi, Interesting interview with Carl Lawrence-Head of New York's Warwick Capital Management from Barron's On Line. Jack Q: Okay, please name some names. A: AT&T Corp., the long-distance and wireless giant, is a good starting point. You'll recall that after spinning off its seven Baby Bells in 1984, Ma Bell subsequently spun off Lucent Technologies, which makes telecom equipment. Later AT&T spun out its NCR computer unit. Recently, AT&T reshaped itself again. It re-entered the local service market by acquiring Teleport Communications, entered a joint venture with British Telecom, purchased for stock cable operator TeleCommunications and agreed to buy MediaOne Group, another big cable-TV company. I think demand for high-speed access to Internet service providers, digital TV and telecom services really will explode over the next few years. AT&T will be one of the leading companies in this whole area. Carl Lawrence Q: Is this an earnings story? A: Very definitely. We're in the early innings of a big increase in demand for communications services. Including the dilutive effect of recent mergers, we see AT&T's earnings growing 20%-25% annually over the next two or three years. From $2.23 a share in 1998, we see the company's earnings hitting $2.70 this year and $3-$3.25 in 2000. Over the next two years, earnings could increase to $4-$4.50. Our target for the stock, which recently jumped from about 50 to 60, conservatively is 80-90. Q: What's next? A: Scientific-Atlanta is a leading supplier of terminals, networks and systems to receive, or deliver, broad-band communications, satellite-based video and digital-based interactive services, including e-mail, video on demand and access to the Internet. The company expects to ship 500,000 of its Explorer 2000 digital interactive set-top boxes in the year to June 30, 1999, and one million in fiscal 2000. We see earnings rising 30%-40% next year and the stock price doubling over the next 12-18 months from 33 recently. From $1.02 a share in fiscal 1998, we see SFA's earnings rising to $1.50 this year and something like $2 next year. Q: Several companies produce electronic devices that sit atop TV sets and provide cable and other services. Who's SFA's biggest competitor? A: General Instrument is one. I think Scientific-Atlanta's technology may be superior to theirs because it offers a whole software system that gives users much more flexibility and greater utilization of communications systems. SFA does buy some components, but most of its technology has been developed in its own research labs. Q: What does this Explorer 2000 cost, and how quickly will its price come down? A: It now costs $350 and includes a link to SFA's digital networks. I don't know when or how much its price will decline, but there are some clues. A low-end analog box without network links now costs about $100-$110, and a high-end device now goes for $150-$180. I believe the price of the Explorer 2000 in time will drop to $150-$180. Q: Will Microsoft try to dominate the set-top-box business? A: I don't think so. I believe Microsoft will remain pretty much in the software end of this sector, leaving the set-top devices themselves to companies like Scientific-Atlanta. Besides, SFA's advantage here is the fact that access to the Internet and other communications services will be a lot faster using SFA's system than trying to do it through a computer.