(Mark Sue is managing director of RBC Capital Markets. This blog post is a summary of his report from the recent RBC Technology Conference.)

  • There’s a sense that the worst is behind us, according to key executives who presented at the RBC Technology Conference. Focus companies included Bigband Networks, Brocade, Ciena, JDSU and Sigma Designs. We noted various encouraging trends dependent on the end markets. The consumer segment seems to have led while we are also seeing firming trends in the enterprise. Service-provider-centric companies seem to be lagging, although specific names are noting improving order trends.
  • Ciena CEO Gary Smith highlighted that although carrier customers remain cautious and are still budgeting month to month, sentiment has improved and orders show encouraging trends. Orders turn into deployments and, subsequently, revenues and Ciena has already endorsed sequential revenue growth for the current quarter. New products like CoreDirector II should also contribute to revenue growth in early 2010.
  • Our read on F5 was encouraging, and the stable environment may provide for product revenues to start growing again. Recent F5 potential customer meetings in NY pointed to a more positive tone. F5 has a major operating system refresh (TMOS v.10) and CEO McAdams said initial feedback from customers was favorable.
  • Brocade pointed to the overall health of the business and the relative strength in storage spending. Brocade has the added benefit of gaining market share, according to CFO Richard Deranleau. Brocade remains very pleased with the reception with its new Ethernet partner IBM and partnership benefits are expected in fiscal Q4.
  • JDSU may see a full recovery later than some, in our view, yet CFO David Vellequette reminded investors that the March-April period marked an improvement from the January-February period. That said, inventories are lean, down to 4-8 weeks in optical components from 12-16 weeks just 18 months ago.
  • Sigma Designs CFO Tom Gay pointed to modest improvements in visibility, healthy subscriber growth at AT&T and the resumption of international IPTV projects in 2H09. Positive themes on video growth were echoed by Bigband’s CFO Castonguay who pointed to opportunities in SDV and digital ad insertion.
  • Samsung’s SVP of strategy Justin Denison reiterated the company’s market-share goals and its dominant position in the US in terms of units. Samsung is keenly focused on touch, which grew 10% in 2008.

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