Taking the opportunity to take the pulse of the investing community at the Robertson, Stephens & Co technology conference in San Francisco last week, Reuters’ Sam Perry found that while Internet stocks have taken center stage with investors alongside market leaders such as Intel Corp and Cisco Systems Inc, many investors are wary about what 1997 will bring. With growth of the personal computer market expected to moderate further despite a strong business upgrade cycle, investment in technology stocks is shifting towards value investing from momentum players. People are still suffering from too much money and too much volatility and they’re not sure when it’s all going to stop, said Keith Benjamin, a Robertson Stephens senior research analyst covering Internet media content and services companies. Investors also said they are being more selective than a year ago, when Internet stocks were the rage and bankers joked that you could write Internet on a dollar bill and take it public for $10. Some investors also expressed frustration at the process of sifting through so many business plans – some 70 of the more than 350 companies presenting at the conference were Internet-related, many taking the limelight over more established firms. I don’t think they have any idea what their business plan is, said an investor, shaking his head as he left after the presentation from one well-known Internet start-up.
CIRRUS LOGIC
Cirrus Logic Inc chief financial officer Thomas Kelly told the assembled institutional investors and analysts that the company faces continued challenges in its upcoming fiscal 1998, with a key goal being to focus even more on its core businesses. We’ve got to regain some market share leadership in graphics and audio, Kelly said, We need to fill our fabs consistently. He said that now that the company has taken on joint venture commitments on facilities formerly belonging wholly to IBM Corp and Lucent Technologies Inc, We are doing better each quarter than we did the quarter before. He said that filling plant capacity was key to drive gross margins higher, and after the first nine month’s of the company’s 1997 fiscal year to this month, Kelly said Cirrus has a better sense of improved execution inside the company which is now focusing almost exclusively around multimedia, communications and mass storage. Shortly we’ll be announcing shipping of our 56K modem, with upgraded software to be available in the company’s June quarter. We’ve doubled our shipments of modems each quarter, and I expect that in the March quarter as well, Kelly said, noting that shipment of faster modems could ease pricing pressure in the competitive market.
SYQUEST TECHNOLOGY
SyQuest Technology Inc is talking with computer manufacturers about marketing products using its new super-high capacity 4.7Gb Rocket exchangeable disk technology (CI No 3,112), company officials told the conference. They declined to say when SyQuest would ship a product based on Rocket, although it has demonstrated devices using the removable drive since last November. But the message from SyQuest was far from wholly up- beat, and it is in the middle of a very challenging transition, the conference heard. Chief executive Ed Harper repeated warnings of lower sales and heavier losses in its March quarter than in the first fiscal quarter to December. Turning the business around has been and remains very challenging, he told investors. On a positive note, however Harper said SyQuest was now shipping its SyJet in volume to meet demand and that order backlogs for the product were at a record high and more than double the backlog of any earlier SyQuest product. Later, chairman Edward Marinaro, said it expected to ship internal IDE versions of its EZFlyer 230Mb and 1.5Mb SyJet drives before June 30. SyQuest created our marketplace but we lost our way when the Iomega folks came along, he confessed ruefully.
INFOSEEK
Executives from Internet search agent company Infoseek Corp said it is currently
Content from our partners
selling advertising on 45% to 50% of the available page views, slightly below its 60% earlier levels. This is the first time we’ve been able to see some headroom in terms of potential advertising space that could be sold, chief financial officer Leonard LeBlane told Reuters at the conference. Earlier, he said traffic on the Web search and information company’s site is currently running at a rate of 6 million page views a day. Backing him up, president and chief executive Robin Johnson said the company’s site ranks third on the Web in terms of advertising volume, adding that at 4%, clickthrough of Infoseek ads – the number of advertising banners on which viewers actually click – is several times the industry average of some 1.6%.
ESS TECHNOLOGY
Fabless chip designer ESS Technology Inc is committed to producing and shipping its low-cost facsimile modem chips in the next couple of months, and sees lot of opportunities for the products, chief financial officer John Barnet said. ESS expects to increase its market share in the video CD player market this quarter after shipping 650,000 units for about 30% last quarter.
MICRON TECHNOLOGY
Micron Technology Inc president and chief executive Steven Appleton had cheery news for all memory chip makers, saying that spot prices for 16M-bit dynamic random access memory chips have risen about 50% since the South Korean suppliers revealed plans to limit output, and were currently about $9 to $9.50. We’ve been saying for some time that there isn’t such an imbalance between supply and demand, he said. We don’t have unsold inventory of any significance, he added, saying he expected further growth in the DRAM market as customers switch to more memory-intensive Windows NT and Pentium MMX, we are one of the few that’s still making money in the DRAM area. He declined to comment on financial estimates, since the company’s second fiscal quarter ended on Friday. Meanwhile, sister company Micron Electronics Inc revealed that direct marketing has given Micron a 170% compound annual growth rate in its personal computer business over the past three years. Steve Laney, director of investor relations, claimed to the conference that the company is the number three in direct sales after Dell Computer Corp and Gateway 2000 Inc, with its growth supported not only by desktop sales, but by servers, notebooks, and Client Pro systems. Micron derives more than half of its sales from the small and home office and government but international sales account for only 7% of sales, so that this represents the biggest area of growth for Micron’s personal computer unit.
GRADIENT TECHNOLOGIES
Gradient Technologies Inc is dedicated to enable individuals to keep track of the morass of passwords that they should regularly be changing. Gradient claims to have the software to manage all a user’s passwords one centralized security mechanism, and which will enable users to deactivate the security features of their other applications in favor of a centralized authentication and authorization system. The idea is that instead of a user having 10 or 20 passwords (the most we’ve come across is 40 passwords for one user), only one common password was necessary at the time of logging in, chief executive Len Halio told the conference. He said that the proliferation of passwords had created huge holes in computer security systems, mainly because people tended to use trivial words or use the same word.
ZILOG
Zilog Inc has given itself challenging goals for the fourth quarter, hoping to reach gross margins of 39% compared with 36% in the fourth quarter of 1996 while cutting research and development to 9% from 12% and selling and general expenses to 14% compared with 17%; with net profit at 11% of sales from 5%, Thomas Carson, senior vice-president, strategic accounts, declared.
á
