Monday, September 20, 1999
The vast majority of toolkit companies are based on technologies
that are so narrowly based and vulnerable to commoditization that they have
no chance of long-term survival. As a result, one strategy is to become broadly
based and at the same time move downstream into product development - strategies
followed in different ways by both Millennium Pharmaceuticals Inc. (MLNM, Cambridge,
Mass.) and Human Genome Sciences Inc. (HGSI, Rockville, Md.).
But Affymetrix Inc.'s DNA chip business appears to be a niche
that is deep, proprietary, long-lived, more immune to commoditization than technologies
such as combinatorial chemistry, and one that can be expanded into new markets.
Thus AFFX feels that it can successfully follow a strategy of going deep rather
than broad, while expanding into new markets, specifically diagnostics.