Early,
With regards to PC sales, you have been listening to too much of the MB crap over on the MU thread. PC sales have been brisk and there have been several articles recently which back this notion up, not to mention q4 results of the big players such as GATE, CPQ and soon to announce blowout earnings DELL. INTC, still after running months at full throttle, cannot meet chip demand. Retail sales (which account for only a small percentage of all PC sales) have been soft due to a shift in channels from retail to direct vendors not because overall demand has been soft. GATE, DELL, and MUEI are booming.
Now, getting back to USRX. I have visited several large stores and have seen shelves completely wiped out where USRX modems had been for the Christmas season. Actually, these were sold before Christmas. New inventories were brought in and again I see bare shelves now. BTW, this was true for USR modems only. I did not notice hardly any movement of USRX competitor modems such as ZOOM or MOT. A few stores is hardly a scientific study but these are my observations from this area.
DELL and GATE both use USRX modems so in addition to what I believe is continued strong retail demand for USRX modems, there will be good earnings due to all the PC's DELL and GATE are moving.
As for USRX consumer modem breakout, I believe the last estimates I saw had earnings from these products at significantly less than 50% of total earnings. Margins improved slightly from 1995 to 1996 and are expected to improve from 1996 to 1997 even with pricing pressure on modems due to favorable product mix. In other words, USRX is selling more and more of the high end high margin good stuff. At the same time they are increasing modem market share despite increased competition.
As for X2 delay. We are talking about a delay of something like a week. USRX in their statement said that this was not a concern. I assume this means from a financial viewpoint.
Regards,
FF |
