Newport Networks, another VoIP Gem

mdewey - i've been researching NNG as a possible investment and read your post earlier ...

"No, I wouldn't buy into this company. The market for standalone SBCs is finite and at the moment it's being sewn up by the likes of Acme and Nextone. The SBC functionality I'm convinced will be subsumed into the router/switch fabric - that's already happening with Cisco and Juniper. And I'll bet that it's either of these two vendors which has offered a deal to the Tier 1 carrier that was 'definitely' going to order NNGs product 6 months ago (although that's pure conjecture).

It's your money but look at the chart, non-existent order which was only 'delayed', the downsizing, the note from Ackroyd above ('sufficient items' = laying in a warehouse gathering dust) and decide if that's a company you would invest in."

to add a little more detail ...

Acme will this year have revenues of $83m from sales of Border Controllers (supplying 23 of the top 25 tier 1 cos). They forecast revenue for FY07 of $108-112m.

I agree with your comment that the market for border controllers is time limited as it is being subsumed into the router / switch fabric.

My conclusion is that Acme have done really well and caught the wave, but that Newport Networks have missed the wave and are now wallowing in its wake. NNG may pick up a few crumbs of border control contracts, but not enough to be a viable/sustainable long term business.

I suspect that NNG's sp will continue to fall as cash is burnt and product gathers dust in warehouse.