BOSTON, March 19, 2004 (PRIMEZONE) -- The pmcw Report (http://www.pmcwreport.net/), a financial newsletter service published by twenty-year technology veteran, Paul McWilliams, announces an updated opinion on the players in the TriMedia space. McWilliams was also named by SmartMoney as one of the thirty most influential people in investing.
Started in September 2002, the pmcw Report's model equity positions have returned a staggering 339%, well outdistancing the Nasdaq's 51% gain over the same period. Since January 1st, 2004, the report's equity positions have gained over 22%.
McWilliams recently provided more color regarding one of his favorite themes for 2004, TriMedia. TriMedia is a term he coined in 1998, well ahead of industry analysts, and means "the convergence of data, voice and video over a single IP pipe."
McWilliams explains that the competition between telecom, cable and satellite providers has created a TriMedia race and he feels Harmonic (Nasdaq:HLIT) is selling the fuel needed by all contestants.
McWilliams pointed out that even though some of the major cable companies didn't have particularly strong quarters last month, they all spoke of the success they have had with advanced digital video features, data and VoIP (Voice over Internet Protocol), saying "VoD (Video on Demand) has become a very hot market for cable providers such as Comcast (Nasdaq:CMSCA), Cox (NYSE:COX), and CableVision (NYSE:CVC). Comcast is so charged up by their success in VoD it felt it could unlock the value of the Disney (NYSE:DIS) movie library. CableVision provided the weakest of the three reports, but made it very clear VoD and VoIP programs have been successful."
As well as being a primary vendor for the expensive encoders used by all the TriMedia competitors for advertising insertion and video compression, Harmonic is a leading manufacturer of VoD Gateway equipment. McWilliams feels Harmonic is focused on the niches in the value chain with the greatest product differentiation.
McWilliams notes that there are no doubt suppliers of VoD servers such as SeaChange (Nasdaq:SEAC) and Concurrent Computer (Nasdaq:CCUR) who are better known than Harmonic. However, he feels the durability of their differentiation is much weaker. He explains that VoD servers are much more likely to be driven to a commodity status than the more valuable points in the value chain served by Harmonic. Beyond this McWilliams says, "it appears SeaChange is losing business to Harmonic in the few areas where the companies compete."
McWilliams has also recently commented to his members on how the Personal Video Recorder (PVR) may impact the space and how players like TIVO (Nasdaq:TIVO) will be affected.
Only the future will tell us if McWilliams is right. However, his record suggests he has the correct vision. Members who followed him into Harmonic are sitting at over 700% profit on some of their early buys.
Over the past week McWilliams extensively reviewed Harmonic's recent weakness and volatility keying on the following topics:
-- The impact on shares based on rumors that Advanced Fiber (Nasdaq:AFCI) may lose its contract to Verizon (NYSE:VZ) thereby affecting Harmonic's positioning in the Fiber to the Premises (FTTP) build-out.
-- Cisco's (Nasdaq:CSCO) recent Trimedia win with a Danish broadband supplier and the potential impact on Harmonic.
-- Scientific Atlanta's (NYSE:SFA) announcement of its new tunable DWDM system and how it will compete with Harmonic's products.
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