re: Infinera Numerates Its NumbersOnce line cards start populating empty slots in footprints in customer's central offices to expand customers breath and capacities..YES.
In a way it is a Razor/Razor Blade business model that will lead Infinera to profitability. Probably 2nd half 2006 early 2007.
re: Infinera Numerates Its NumbersThe cost of the technology is going to fall over the years as the technology matures. Integrating optics on a chip is a new disruptive technology. Would'nt we see more applications for this technology in future, for eg. maybe building the next-gen backplanes ?
As the technology matures, would we see Infinera selling chips instead of systems and reach out to a wider market ?
1) Infinera does not have years of cash to last, they have to find the exit. VCs have insufficient patience for that kind of play, even the infamous KPCB.
2) Do you have an idea of how many companies over how many years have sold or tried or are still trying to sell backplane technology? The target is so wide and moves so fast no one company can claim to own it.
Your comments always carry weight with me. So I am going to see whether your big statement "Infinera is toast as a chip play" turns out to be true or false.
re: Infinera Numerates Its NumbersWhyiswhy's comments are right on the money:
>>>>> The worlds most intelligent and experienced engineers working on the most visionary products under the most competent management with unlimited funds and time has more than once resulted in massive piles of useless garbage, and empty bank accounts.
The valley is both populated and carpeted with their remains. (But what a great mulch...)
The only thing that counts is the benefit the product has to the customers bottom line.
And for what it is worth, I agree their product is the equivalent of a flying car. (As an aside, in the bubble I heard a great line: in a tornado, even a turkey will fly :) )
Bottom line: OEO requires massive marketing pump to amplify dollars invested by gullible VCs. (Beautifully refined...) >>>
As a fairly dispassionate observer, the whole marketing ploy of market share by deployed wavelengths reeks more than a bit.
Anyway, let's see how they pan out; it seems that the telecoms bubble is going from its big crunch into a new inflationary phase.
re: Infinera Numerates Its NumbersThe whole razor/razor blade business model referred to earlier works very well for companies who make razors. The technology is static (one blade, 5 blades ... same difference).
It doesn't work so well in technology. You build your business model on a projected revenue stream of $X/unit, only to find that the equivalent capacity can be replaced at 0.1 * X in a very short time. I don't care about OEO or EDFA - you can't stop the price/perf curve in optical networking.
re: Infinera Numerates Its NumbersI agree that they would be toast as a chip play. However they have shown no desire to sell chips. If I remember the bought a PMD chip coumpany (probably out of bankruptcy,) and explicitly said that they had no intention of selling the chips on the open market. Did they ever hint that they would sell pic chips? They can sell chips for several thound dollars or systems for several hundred thousand dollars. (Really wild guess for prices.)
re: Infinera Numerates Its Numberswhyiswhy said: "The only thing that counts is the benefit the product has to the customers bottom line."
You're right about that and who is better to prove this point than their first major customer, LLVT. Check this out: www.Level3.com/582.html (03/28/06) at around 38minutes to 45minutes of the conference call.
In a way it is a Razor/Razor Blade business model that will lead Infinera to profitability. Probably 2nd half 2006 early 2007.
As the technology matures, would we see Infinera selling chips instead of systems and reach out to a wider market ?
-raid
1) Infinera does not have years of cash to last, they have to find the exit. VCs have insufficient patience for that kind of play, even the infamous KPCB.
2) Do you have an idea of how many companies over how many years have sold or tried or are still trying to sell backplane technology? The target is so wide and moves so fast no one company can claim to own it.
Infinera is toast as a chip play.
Your comments always carry weight with me. So I am going to see whether your big statement "Infinera is toast as a chip play" turns out to be true or false.
>>>>>
The worlds most intelligent and experienced engineers working on the most visionary products under the most competent management with unlimited funds and time has more than once resulted in massive piles of useless garbage, and empty bank accounts.
The valley is both populated and carpeted with their remains. (But what a great mulch...)
The only thing that counts is the benefit the product has to the customers bottom line.
And for what it is worth, I agree their product is the equivalent of a flying car. (As an aside, in the bubble I heard a great line: in a tornado, even a turkey will fly :) )
Bottom line: OEO requires massive marketing pump to amplify dollars invested by gullible VCs. (Beautifully refined...)
>>>
As a fairly dispassionate observer, the whole marketing ploy of market share by deployed wavelengths reeks more than a bit.
Anyway, let's see how they pan out; it seems that the telecoms bubble is going from its big crunch into a new inflationary phase.
It doesn't work so well in technology. You build your business model on a projected revenue stream of $X/unit, only to find that the equivalent capacity can be replaced at 0.1 * X in a very short time. I don't care about OEO or EDFA - you can't stop the price/perf curve in optical networking.
I hope their razors are shipping profitably :)
kf
However they have shown no desire to sell chips.
If I remember the bought a PMD chip coumpany (probably out of bankruptcy,) and explicitly said that they had no intention of selling the chips on the open market. Did they ever hint that they would sell pic chips? They can sell chips for several thound dollars or systems for several hundred thousand dollars. (Really wild guess for prices.)
You lost me on that one. How are they a chip play? I thought they were a box play, with some key vertical integration thrown into the mix.
Also heard they flubbed a recent firesale purchase.
You're right about that and who is better to prove this point than their first major customer, LLVT. Check this out:
www.Level3.com/582.html (03/28/06) at around 38minutes to 45minutes of the conference call.
-Teddy