Thanks for explaining that earlier OSX. It surely has sparked some interesting debate. But I have to believe that with $28bn in applications, which are combinations of grants and loans and equity, that the RUS is going to be able to leverage the loan loss reserve.
So let’s say that the stimulus is $13 billion. Not all of that will get spent on access gear. Let’s assume that 15% does, which is probably low, but there will be wireless, etc. That means that about $2 billion of funding will go toward access gear.
There has been a pretty clear trend in the applications toward tier 3 SPs and the bulk of that money is heading here. Depending on whose estimate you look at for tier 3 access gear, the annual figure is ~$400-500 million.
That means a potential stimulus of 4-5x the size of the market being applied over the next 2-3 years. I have Calix at 38% and Occam at 21% share of that market currently. Both are going to do very well if these numbers are accurate and I don’t imagine there is going to be any near-term margin pressure.
Calix may finally actually make it public…
"Many CSPs significantly decreased their capital spending in order to conserve cash and significantly reduced their orders for our access systems and software. our visibility into our projected revenue and cash flows declined and our expectations of growth decreased significantly As a result, the fair market value of our common stock decreased significantly between October 22, 2008 and January 27, 2009 orders for our access systems and software declined during the first and second quarters of 2009, and our revenue in the first and second quarters of 2009 declined over the corresponding periods in 2008 As a result, the fair market value of our common stock decreased between January 27, 2009 and July 14, 2009. On July 14, 2009, our board of directors determined the fair market value of our common stock was $3.49. October 2009 CSPs’ capital spending generally began to increase. Our prospects and our expectations of growth improved and our third quarter revenue was flat from the corresponding period in 2008 (the same as Enablence) .