Sunday, January 28, 2007

Westell: "We need more Clients"

BusinessWeek reports that Westell stock was downgraded because their business has peaked.

"We are disappointed that Westell has not been able to expand its customer base beyond Verizon, AT&T and BellSouth," wrote Cowen and Co. analyst John Anthony in a note to investors..... In the past few months, the company has lost significant ground to competitors at Verizon, its largest customer, Anthony wrote. He added that even though Westell has introduced a host of new products over the past 18 months, it has failed to secure any new customer wins." [BusinessWeek]

VZ is trying to sell ONT's not DSL modems. (ONT are for FiOS). Who else would be a client? Windstream, Embarq, CenturyTel, FairPoint. That's it. (Not growth markets). Even then, at some point the market for DSL modems is flat, so you need a new pony. (You need to watch Linksys and D-Link who also have a flooded market yet manage to add new products to replace the old ones.)

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