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Author: tjbd Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 8764  
Subject: Re: Next Generation Networks Date: 2/12/2000 10:03 PM
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Tornadoes?
http://www.coppermountain.com/news/02012000pr.html

Copper Mountain Networks, Inc., (NASDAQ: CMTN) today
announced financial results for the fourth quarter of 1999. Revenues for the fourth quarter of 1999 were
$44.6 million, an increase of $29.9 million over revenues of $14.7 million for the fourth quarter of 1998.
The fourth quarter revenues represented an increase of $12.6 million, or 39 percent, over the $32.0
million in revenues reported for the third quarter of 1999. For the year ended December 31, 1999,
Copper Mountain reported revenues of $112.7 million, a $90.9 million increase over revenue of $21.8
million reported for the year ended December 31, 1998.


http://www.redback.com/press/pr_011900_q499earnings.html

Net revenues for the fourth quarter of 1999 were $26.1 million, compared
with $4.5 million for the same period in the prior year, an increase of 480
percent. Pro forma diluted net income for the fourth quarter of 1999 was $2.0
million or $0.04 per share (excluding amortization of deferred stock
compensation of $763,000). This compares to the fourth quarter of 1998 pro
forma net loss of $2.6 million or $(0.09) per share based on 28.4 million
weighted average shares. Before pro forma adjustments, net income for the
fourth quarter of 1999 was $1.2 million or $0.02 per diluted share compared
to a net loss of $3.1million or $(0.42) per share for the same period in the
prior year.


Things are heating up. Although both are relatively new companies, both doing greater than 100% year-over-year growth.
Redback, however, has a proprietary enabling technology with a high switching cost, I don't believe that to be the case with Copper Mountain, though it will no-doubt
do well during the tornado.

As for DSL providers such as Covad and Northpoint, they have no proprietary tech, nor are there ANY switching costs between them. Plus, although the FCC has mandated that the RBOC's open their lines, I can tell you from personal experience, they make it difficult to bypass their own DSL service in favor of the CLEC's.

I tried to order DSL from Qwest (Covad), but they were unable to provide it to me due to a "problem" between their equipment and Bell Atlantics within the Bell Atlantic C.O.

Plus, the RBOC's such as BellAtl, USWest and Pac Bell are still cheaper. So if the RBOC's make it difficult
to switch AND are cheaper, that wouldn't bode particularly well for companies like Covad. And as we know, having to compete on the basis of cost doesn't make for Gorilla-like investing as the DSL SERVICE is already being commoditized.

So, you need to look for the enablers in this space, and the ones looking good right now are Broadcom and Redback. IMHO, FWIW.

Tim
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