Saturday, June 09, 2007

Infinera's Significant Competitive Advantage

"Infinera (INFN) had a very successful first day of trading after seven years of working counter to the popular and misguided beliefs of a Gilderesque, all optical future.

Great controversy surrounds the company and investors wonder whether the valuation attached to company is justifiable. The valuation is indeed debatable and is predicated on their success penetrating the PTT’s & Bellcos.

However, I feel this is a real company with a significant competitive advantage derived from their early attempt to use integrated photonics as a disruptive technology. Their key differentiation was dropping the cost of optical to electrical conversion (see 'Death of the All Optical Network') and building a system that leveraged this strength."

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