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▪ The Week / Rebuilding the Network
▪ Friday Feature / Sigma’s New Life After Television
▪ Friday Blogger Bonus / Capital at Lightspeed
A N N O U N C I N G : The
The Week / Rebuilding to Network
George Gilder: As fiber optics moves massively into the local loop, unleashing a protocol zoo and multi-play in the neighborhood, every network node has to change. Legacy processor based routers such as the Cisco 7500 with ordinary embedded microprocessors or layer 2 switches based on fixed application-specific integrated circuits (ASICs) or legacy SONET (synchronous optical NETwork) boxes at the telco central office cannot handle the onrush of video, voice, and data schemes with different prioritizations and reservations, aggregation policies, unicast and multicast, TCP (transfer control protocol) and UDP (user datagram protocol), virtual private networks (VPNs) and MAC (media access controller) to MAC tunnels and every flavor of digital subscriber line (DSL) interface. Driven by the potential terabits of fiber optics, the new networks all require specialized network processors to groom and shuffle the flood of packets at wirespeed.
To get a glimpse of EZchip’s (LNOP) future, look at Japan, where fiber has already been deployed for some 15 million subscribers over the last three years on the way to 40 million. There, broadband Internet links do between 10 megabits per second and 100 megabits per second. They run such services as video streams, multiplayer games, HDTV downloads, cell phone TV, VPNs, karaoke, 3G CDMA wireless backhauls, and downloads to handsets faster than U.S. wireline broadband.
bring these flows together, KDDI, Japan’s second largest carrier, is
rebuilding its entire network around 10 gigabit per second carrier class
Ethernet boxes, for what they call “triple play” Hikari Plus: voice-over-IP
(VoIP), Internet, video on demand, Pay TV, and karaoke.
In any case, don’t bet against KDDI. It has bet the farm on new technologies twice in recent years. One was on CDMA 2000 and EV-DO from Qualcomm (QCOM). That made KDDI the fastest growing wireless carrier in the world.
Excerpted from the June issue of the Gilder Technology Report, written by George Gilder. To view the complete June report, visit www.Gildertech.com and log on with your subscriber ID.
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Friday Feature / Sigma’s New Life After Television
Charlie Burger: Life After Television means a lifeline of opportunities for Sigma Designs (SIGM), opportunities that are brightening as quickly as television is darkening. By plunging into the market early and putting all the various standards on one chip, Sigma has achieved a real edge against Broadcom (BRCM), Texas Instruments (TXN), Intel (INTC), and others, who assumed they could wait until standards were settled. The company’s media processors, which boast ports and pumps to every conceivable connector, drove revenue up 41%, mainly through increased chipset sales to manufacturers of IPTV set-top boxes, followed by sales into portable media players in Asia.
Volume shipments into set-top boxes should boost sales another 20% this quarter. Sigma’s close partnership with Microsoft TV continues to flourish as telcos accelerate broadband deployments in preparation for major roll-outs of Sigma-dependent IPTV. Sigma also leads in media processors for Linux-based boxes and claims 65% of the rising IPTV market. Set-top box wins include Motorola/MOT (for AT&T/T), Phillips (for BT/BT), Cisco/CSCO (through Scientific Atlanta/SFA), and UTStarcom (UTSI). Altogether, Sigma is working on designs with 14 of the top 25 providers of IPTV services, including the top 2 (Freebox in France and AT&T) and 4 more of the top 10.
Further out, driving “double digit” sequential growth during the second half of the year will be continued vaulting of volume shipments to Telcos and set-top box manufacturers, building demand for video players in China, and the launch of top-brand Blue-ray players in time for the holidays. Look for a big Blu-ray ramp to follow during 2007. (Sigma dominates the market for each of the competing DVD standards—Blu-ray and HD DVD.)
Excerpted from a www.Gildertech.com Sigma Designs (SIGM) company update, by Charlie Burger. Log on with your GTR subscriber ID to read Charlie’s complete analysis.
Friday Blogger Bonus / Capital at Light Speed
Rich Karlgaard: “Capital in the electronic age,” the great banker Walter Wriston was fond of saying, “Will always go where it’s welcome and stays where it’s well-treated.” At light speed.
Yep. Understanding capital and talent flow is absolutely crucial to understanding the today’s globally interconnected economy. Wriston, who died in 2005, knew what made the global economy tick, and happily for us, wrote it all down in a book called The Twilight of Sovereignty (http://www.amazon.com/exec/obidos/ASIN/0684194546/gilderpublish-20). For my money, Twilight was the one of the best books of the 1990s.
Another guy who understands capital and talent flow is Dr. John Rutledge, whom I often quote on this blog. John is a frequent guest on our TV show, Forbes on Fox – yesterday, John sent this email out to the Forbes on Fox gang. The email is a wonderful mini-essay on capital and talent flow. I reprint it below with John’s permission.
“My daughter Katie (first year graduate student at Columbia teachers college) went to her 5th high school reunion this weekend in Deerfield, MA. I asked her what all her friends are doing for jobs.
“Her answer, ‘Everyone else is an I-Banker!’
interesting question is why? The answer is also the reason U.S. corporate
profits as a percentage of GDP are the highest in recorded history. It’s the
reason why real wages are declining for ordinary workers. It’s the reason why
emerging market stock markets have been the top performers for the past 6 years
in a row (the last 3 weeks notwithstanding). And it’s the reason the politics
has become so bitter in the US.”
Check out Rich’s blog:
Check out John Rutledge’s blog:
Hear both Rich and John speak at Gilder/Forbes Telecosm 2006:
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