Hi Jeb,
See responses below:
I see that you are in communications.
Yes, but I work more on the upper layers of the network protocol stack. Put another way, I understand the software components driving the network and the services offered by the network; I don’t have I depth knowledge of the nuts and bolts of the communications infrastructure.
How did you make this inference? Just curious.
Do you have an opinion on Infinera (INFN)?
INFN is an optical networking company. So it’s not really within the sphere of my expertise and it’s not really on my watch list.
However, I do know that there’s much competition in this space. Alcatel would be a competitor. I would think Huawei is another competitor. Further, networking hardware companies would be highly dependent on the capital expenditures of large Telcos. Telcos sort of do these sort of upgrades in cycles. Sometimes, governments intervene such as in Australia where the government has setup the NBN company to roll out the next-generation of broadband. I think these dependencies cause revenues to be lumpy and cyclic.
My viewpoint is - hardware companies depend on others to see uptake of their products - unlike say services oriented companies which can roll out new innovative services to create new market opportunities. As such, I have generally avoided companies selling networking hardware with the view that if hardware makes more capacity and higher speeds available, some software company will figure out how to exploit it, and I think the software company will be the one happily going to the bank. Think Netflix, Google, Facebook.
Of course, every rule or investing instinct is meant to be broken. I hold UBNT and INVN, which predominantly sell hardware. UBNT is a special case. The business model is disruptive and I like its founder led management. INVN is an a attempt to ride the many sensors in your phone wave. Chris has a nice post covering his non-linear thinking with respect to MEMS and INVN. I concur with that line of thinking.
I can take a closer look at INFN if that may be helpful.
Anirban.