Cramer: Tech Stocks

N E W   Y O R K, Jan. 29 -- We thought that all communications technology should sell at a premium. But what happens if only certain portions of communications technology are selling well?

What happens when we realize that communications technology is not a monolith?

Then we get what happened last week in the Nasdaq: Some communications technology stocks, the ones without the right products, get crushed. Others, the ones with current, up-to-date product lines, excel.

I can't stress how important this all is. It's what derailed

Lucent. It's what caused the real shortfall in PMCS. It's a brand-new pecking order for what was once an imperceptibly different group of players.

Rising and Falling Fortunes

Put simply, the slowdown in Internet infrastructure is very real, but is not spread equally. A look at the companies' products helps explain why everything has gotten so uneven.

The bigger companies, the ones with giant suites of products, will all feel the slowdown because their products are so broad-based. Hence the declines in Cisco,

Nortel, and worst of all Lucent, which has the least impressive product portfolio.

So let's take the fiber industry. First, the dot-coms go bust, so they no longer need their fancy T1 connections. The

Covads and the

NorthPointsget cancellations.

The WorldComs, AT&Ts and

PSIXs of the world slow their orders on boxes. Cisco, Nortel and Lucent see some slowing and some inventory building. Ultimately, the network operating chipmakers feel the pain about eight months after the dot-com implosions. They see the orders last in the chain, so that delay makes sense.

The low end is being hit and hit hard. The higher end is holding steady. That's the sexy new stuff and I see no slowdown there at all.

Tale of the Tape

So how do the players break down?

Corning: Corning supplies the fiber for everything and will see the slowdown this quarter. It hadn't seen it before because fiber is labor intensive and has long lead times.