Ampex Corp: Digital Storage Message Board

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Technology Stocks : Ampex Corp: Digital Storage

AMPX 7.887

+0.7%

Dec 31 3:59 PM EST

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To: jonggua who wrote (1636)	2/3/1997 11:32:00 PM
From: Gus	of 3256

One of the things that caught my eye looking at the year-over-year numbers was the royalties: ____________________Non-recurring____ Recurring _______Total__________ 1995 (35.0M shares)$0.21 or $7.5M___$0.21 or $7.5M___$0.42 or $15.0M 1996 (44.7M shares)$0.04 or $1.8M___$0.19 or $8.5M___$0.23 or $10.5M We know that in 1995 Ampex doubled the number of licensees for its VHS/8mm patents. My understanding is that the typical licensing deal is usually about 5 years so it may be fair to assume that over the next 3 years Ampex will be getting roughly $2.0 million a quarter from those deals alone! Global VCR sales are expected to go from 49 million units in 1996 to 50 million units in 1997, and camcorder sales are expected to go from 8-9 million units in 1996 to 9-10 million units in 1997. Not redhot growth (VCR sales in developed countries are largely replacement sales with the only growth coming from China, and South/Central America), but even the DVD is not going to make this market disappear in the next 5 years. I am familiar with the argument that the DVD will eventually replace the VCR, but there are those who believe that the DVD folks will never be able to put the same kind of restrictions (software and hardware encryption schemes) on VCRs (analog or digital) that they can implement from the ground up in DVDs. I think there is a late 70's U.S. Supreme Court ruling that Sony won against Disney and Columbia (?) that basically preserves the right of Sony and other VCR manufacturers to SELL the videotape recorders to consumers who have the right to do what they wish with their "copying" devices so long as they heed the FBI personal use only warning plastered at the start of every movie. I am really not sure. At any rate, Sony and JVC both have digital VCRs out already. Except for the fact that Sony referred to a licensing agreement with Ampex in its last SEC filing, I really don't know if Sony and JVC use any of Ampex's technologies in its latest digital extensions to the VCR. Anyway, $2.0 million a quarter in no-cost royalties!! Without Mitsubishi too! Add the accelerating growth of DST. Add KM for disk drives. Add KM for tape and floppies. Add....well, you know where this is going.....

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