re: Finisar & Optium Challenge JDSUI see what you're saying, Doolin, but the assumption here is that only a few big players are going to be the winners in optical. JDSU is the benchmark, and Finisar's about to join that level. What does Avanex do in response? (Ovum thinks they become a takeover target, as does Bookham, assuming any willing buyers are out there.)
re: Finisar & Optium Challenge JDSUSo I think productivity of AVX is pretty high in this industry. I heard of that AVX outsourced manufacturing in Thailand. That factory is shared by AVX, BOOKHAM, JDS... It sounds a little fantastic for me, since I think this industry is far away from that level in which IP can be devided from manufacturing.
Furthermore, I think AVX lacks really individual innovation, compared with other major players. AVX seems to be focused on "sub-systems". That means it can't produce the key components. And subsystem is easy to be imitated.
re: Finisar & Optium Challenge JDSUCraig - Your assumption is based on the bubble premise that revenues trump profitability, that executives can burn cash indefinitely with impunity.
Jo Major is one of the few who get it. From day one he had a bold plan to make his company profitable and he has executed it to a T.
I may speak from a distance but I have been insuring small business firms for many decades and the most important ingredient for success is the guy at the top.
Major is not a salesman lawyer or accountant. He is a FO production guy who knows the business from the bottom up. No one has to explain to him how the business works, especially at the prodution level. He doesn't react, he leads.
That being said, it's still possible that his company could get buried before the rest of us catch on. But don't bet against it.
re: Finisar & Optium Challenge JDSU> Craig - Your assumption is based on the bubble premise that revenues trump profitability, that executives can burn cash indefinitely with impunity.
Not sure I'd put it that way; it's more like I'm suggesting profitability doesn't necessarily trump revenues.
Sure, if you put togther a large company and keep losing money, you sink. But it's possible small and profitable doesn't win either, because Cisco and other TEMs want to limit their buying to a few large suppliers.
Finisar just guaranteed itself a berth in the playoffs, so to speak -- so the stock goes up.
re: Finisar & Optium Challenge JDSUCraig - Maybe avoiding nut-crunchers like Cisco is the way to go.
I know I am pumping Avanex but IMHO I am also saying things that should be said in an industry still flopping around like a boated fish.
Jo Major recognized early on that the collapse in pricing meant you had to adjust to a low cost environment and still make money in order to survive long term.
Contract manufacturing or not, he has the unique ability to get product out the door, on time, at a profit. If others could do it, they would be doing it.
If you own your own plant and its payroll you have to keep them operating, even at the expense of margins, or your overhead will kill you.
In contrast, at Avanex the advocates of a product have to prove to senior management that they can design, manufacture and sell their product profitably. Otherwise, the product is canned. You can't do that unless you are 100% contract manufacturing.
A case in point is a video of their new ROADM on their website. It is proprietary, flexible, reliable, easily manufactured, low-cost, and Jo Major can get them out the door in bulk and make money doing it.
No matter what Fabr*net says, you are right about IP. It's been the optical market curse. Design and manufacturing are still joined at the hip.
Only adept, very swift movers with intrinsic tech. know-how and good marketing sense can win in this environment. Quiet stealth operations that come out of nowhere win, not Boasters with BMW driving PR executives.
Those bogged down in cultural issues of patent litigatins etc. can't focus on getting it done. In other words, I think a good question is: Optium could bring ROADM's to market, but will FNSR?
Furthermore, I think AVX lacks really individual innovation, compared with other major players. AVX seems to be focused on "sub-systems". That means it can't produce the key components. And subsystem is easy to be imitated.
Jo Major is one of the few who get it. From day one he had a bold plan to make his company profitable and he has executed it to a T.
I may speak from a distance but I have been insuring small business firms for many decades and the most important ingredient for success is the guy at the top.
Major is not a salesman lawyer or accountant. He is a FO production guy who knows the business from the bottom up. No one has to explain to him how the business works, especially at the prodution level. He doesn't react, he leads.
That being said, it's still possible that his company could get buried before the rest of us catch on. But don't bet against it.
Not sure I'd put it that way; it's more like I'm suggesting profitability doesn't necessarily trump revenues.
Sure, if you put togther a large company and keep losing money, you sink. But it's possible small and profitable doesn't win either, because Cisco and other TEMs want to limit their buying to a few large suppliers.
Finisar just guaranteed itself a berth in the playoffs, so to speak -- so the stock goes up.
I know I am pumping Avanex but IMHO I am also saying things that should be said in an industry still flopping around like a boated fish.
Jo Major recognized early on that the collapse in pricing meant you had to adjust to a low cost environment and still make money in order to survive long term.
Contract manufacturing or not, he has the unique ability to get product out the door, on time, at a profit. If others could do it, they would be doing it.
If you own your own plant and its payroll you have to keep them operating, even at the expense of margins, or your overhead will kill you.
In contrast, at Avanex the advocates of a product have to prove to senior management that they can design, manufacture and sell their product profitably. Otherwise, the product is canned. You can't do that unless you are 100% contract manufacturing.
A case in point is a video of their new ROADM on their website. It is proprietary, flexible, reliable, easily manufactured, low-cost, and Jo Major can get them out the door in bulk and make money doing it.
Who needs 10,000 employees?
No matter what Fabr*net says, you are right about IP. It's been the optical market curse. Design and manufacturing are still joined at the hip.
Only adept, very swift movers with intrinsic tech. know-how and good marketing sense can win in this environment. Quiet stealth operations that come out of nowhere win, not Boasters with BMW driving PR executives.
Those bogged down in cultural issues of patent litigatins etc. can't focus on getting it done. In other words, I think a good question is: Optium could bring ROADM's to market, but will FNSR?