_______________________________________________
- THE FRIDAY LETTER -
(emailed weekly,
from Gilder Publishing,
for friends and subscribers)
__________________________________________________
| http://www.gilder.com/ | Issue 288.0/March 23,
2007
SIGN-UP A FRIEND FOR FREE!
HEADLINES:
- The Week / Gilder: EZ Confidence
- Friday Feature / Synaptics’s Uninvited Guests
- Friday Blogger Bonus / Is the Party Ending for Wireless?
- Readings /
The
Week / EZ Confidence
Gilder Technology Forum Subscriber (3/19/07): George, Tell us what you learned at the Linley Tech Seminar (on
March 13) about Bay, Xelerated and any other potential competitors of EZchip
(LNOP). Investing minds want to know.
George Gilder (3/19/07): The fascinating thing about the Linley seminar was
the emergence of EZchip (LNOP) as the dominant player that all others
were trying to bring down. VP of Business Development Amir Eyal was calm and
confident in outlining the enormous challenges of creating chips that satisfy
the needs of the carrier Ethernet switch/router (CESR) and metro markets. Bay
Microsystems and Xelerated were hyping 100 gigabits a second. They
made unconvincing claims to be leapfrogging the lame incumbent.
Moreoever, Bay and Xelerated are competing with Cisco (CSCO) by
building their own boards and pizza boxes, while EZ remains on the target of
hollowing out the router/switch and building the chips that the market needs
now rather than projecting superchips for the future. I also sensed that EZ is
sure of its ability to scale its architecture to higher layers and higher
speeds as needed.
Bottom line: I came out of the sessions more confident about EZ.
To read more posts by George Gilder and the GTR subscribers log on
with your subscriber ID at http://www.gildertech.com/board/.
SPECIAL
OFFER
|
The Telecosm
Lounge |
Friday Feature / Synaptics’s Uninvited Guests
Charlie Burger (March 2007 Gilder Technology
Report excerpt): Reaping
early rewards from its grand goal to put its capacitive touch interfaces
wherever you find buttons, switches, and LCD screens, Synaptics (SYNA)
reported a 39% sequential rise in revenue last quarter. Tripling to a fifth of
total revenue were sales into non-PC products, particularly portable music
players and cellphones where the company’s quick-launch buttons enable easy
access to multimedia functions such as music and messaging. In some phones,
Synaptics is replacing most of the mechanical buttons with a display that
responds to a light touch or movement of the finger.
Also
increasing, by 22%, were sales into PC products. Drivers here were the company’s
flagship touchpads for notebooks along with buttons and controls for notebooks
and PC peripherals, including LCD monitors that incorporate buttons and scroll
strips for controlling onscreen display and audio, and wireless keyboards with
touchpads for cursor navigation and quick access to applications and controls.
Synaptics now offers “precision scrolling” which relates scrolling distance on
the screen directly to the finger motion on a touchpad and allows users to
accurately move both long and short distances.
Synaptics’s
ascent appears set to continue. The seasonally weaker March quarter, though
forecast to be down sequentially, should exceed the year-ago quarter by almost
half as the company drives toward record revenue of $252m for fiscal year 2007
(ending June), soaring past the previous peak of $208m reached in fiscal 2005.
But don’t celebrate just yet. Crashing the party have been rivals offering
multimedia products for peripherals, phones, and music players; third-party
vendors infiltrating Synaptics’s multimedia products (such as suppliers of the
LEDs that illuminate the touch sensitive buttons on phones); and consumers
enticed by low-end notebooks.
The
uninvited guests are eating Synaptics’s margins by forcing the company to cut
prices while increasing cost of goods and overhead, which includes a growing
wave of engineering hires….
Find
out what Synaptics is doing to expel its unwanted guests by logging in with your
subscriber ID at http://www.gildertech.com/ to read the
complete March report.
|
GilderTECH
GAINS |
Friday Blogger Bonus / Is the Party Ending for Wireless?
Clayton
Christensen, Scott Anthony and Alex Slawsby (Forbes.com, 3/20/07): The last two decades have
been good for cellular phone companies like Verizon Wireless, T-Mobile and
AT&T. Demand for mobile phone and e-mail services has risen dramatically,
and profits have followed suit.
Carriers
have found more and more creative ways to boost revenue. The once-humble
cellphone has become an entertainment hub that takes photos, sends e-mails and
plays songs, all to the benefit of wireless operator bottom lines. Case in
point: Verizon Wireless' net income has grown at a compound rate of 33% a year
since 2003, hitting $9.6 billion in 2006.
Signals suggest, however, that wireless providers who aren’t careful might find themselves victims of a devastating disruptive assault from emerging technologies and business models. It may seem strange to suggest that seemingly dominant incumbents should worry about currently invisible attackers. But if history is any guide, it's not strange at all.
In
industry after industry, seemingly trivial entrants have used the power of
disruptive innovation to drive change. In the wireless industry, disruptive
attackers--ranging from start-ups like Blyk and FON to more established
companies like Google and Skype--are now building momentum with incumbent
wireless carriers in their sights.
Ironically,
the wireless industry’s history traces back to disruptive innovation. The first
mobile phones had low voice quality, limited battery life, were bulky and
expensive. But they offered something that land line telephones could not
match: The capability of placing and receiving calls while mobile.
Quality
has steadily improved, and customers are increasingly choosing the convenience
of wireless technologies over the rock-solid reliability of their land line
phone. Since 2001, more than 25 million landlines were discontinued
domestically in favor of the use of wireless telephony.
And yet, substantial evidence suggests that the cellular wireless operator industry in the U.S. may now find itself the "disrupted," rather than the "disruptor."
Read
on:
http://www.forbes.com/technology/2007/03/19/wireless-verizon-fon-lead-innovate-cx_cc_0320christensen.html
____________________________________
Readings /
Tera! Tera!
Tera!
http://www.wired.com/wired/archive/15.03/start.html?pg=12
The Weekly GTI
http://www.gtindex.com/
Programming Provocateurs
http://www.time.com/time/magazine/article/0,9171,1597539,00.html
SanDisk, Hynix plan NAND joint venture
http://www.eetimes.com/news/semi/showArticle.jhtml;jsessionid=OO00AAGTGOCPYQSNDLPCKHSCJUNN2JVN?articleID=198100350
Xilinx Delivers PinAhead 9.1 Design Suite
http://www.eetimes.com/news/design/showArticle.jhtml?articleID=198100425
Qualcomm hits back against Nokia'a accusations
http://www.eetimes.com/news/latest/showArticle.jhtml;jsessionid=CUG0XYBBANB5KQSNDLSCKHA?articleID=198100233
Apple TV projected to surpass TiVo, Netflix
http://www.eetimes.com/news/latest/showArticle.jhtml;jsessionid=CUG0XYBBANB5KQSNDLSCKHA?articleID=198100067
Startup makes FPGA prototypes a snap
http://www.eetimes.com/news/design/showArticle.jhtml?articleID=198001301
Fed Leaves Interest Rates Steady, Maintains Stance on Inflation
http://www.cnbc.com/id/17718009
__________________________________________
SIGN-UP A FRIEND FOR FREE!
Click here to
add a friend to our Friday Letter mailing list.
__________________________________________
FRIDAY LETTER STAFF
Editor: Mary Collins / mcollins@gilder.com
Research: Sandy Fleischmann / sfleischmann@gilder.com
ADVERTISING INFORMATION
The Friday Letter is mailed each week to more than 40,000-plus
subscribers and friends of Gilder Publishing, including industry leaders,
financial professionals and individual investors. For information about
advertising, contact Linda Bentley at lbentley@forbes.com.
PLEASE NOTE: The appearance of an advertisement in the Friday Letter
does not indicate an endorsement for the product and/or service by George
Gilder, Gilder Publishing LLC, or the Friday Letter staff.
FEEDBACK AND PROBLEMS
For technical problems, or to send letters to the editor, please
e-mail info@gilder.com.
MAILING ADDRESS
Gilder Publishing, LLC
ATTN: Friday Letter
291A Main Street
Great Barrington, MA 01230
_______________________________________________
The Friday Letter is published weekly for subscribers and
friends of Gilder Publishing. If someone you know would enjoy it, please feel
free to forward a copy.
Gilder Publishing makes the Friday Letter available for free. To
help defray some of the costs of producing this information on a weekly basis,
we will from time to time be sending you offers from companies we think you'll
be interested in. These offers will not come more than once a week. If you do
not wish to receive this related information, please opt out of this process at
the link below and we will not share your name with companies outside of Gilder
Publishing.
To SUBSCRIBE please visit http://www.gilder.com/
To UNSUBSCRIBE please go to http://www.gilder.com/fridayletter/unsubscribe.php
Trouble subscribing or unsubscribing?
Email info@gilder.com
http://www.gilder.com/unsubscribe/specialproducts.php
To SUBSCRIBE please visit http://www.gilder.com/
To UNSUBSCRIBE please go to http://www.gilder.com/fridayletter/unsubscribe.php
Trouble subscribing or unsubscribing?
Email info@gilder.com
_______________________________________________
Copyright 2007 Gilder Publishing LLC