[USRX argument]
<<< For only a little more than the cost of a standard Schwinn 28.8 Kbps cruiser with foot pedals, we'll supply you with a Schwinn now, and just as soon as the Autobahn is open we'll send out a mechanic who will install a Porsche DSP engine in your Schwinn and make it really scream! >>>>
That's the USRX hope. Get 'em to sign on the dotted line and hope you'll get their business down the road. It may work. The problem with USR now is the standards issue. They're in trouble and everyone knows it.
<<< We pay Ferrari a royalty on each engine, but we're so big compared to Ferrari, and have such economies of scale, that it really won't cost you any more than the Ferrari.>>>
That's possible. But what the little Porsche dealer is getting is the basic Ferrari engine. I've been told it's more complicated than that. Once you have the engine, all the other pieces have to be designed to maximize its power--- to say nothing of upgrades. And don't be so sure about economies of scale. At this point the analogy falls apart. What happens when the Ferrari engine can be produced by the Ferrari guys as cheaply as by the Porsche guys? All it takes is the co-production powers of a Siemens, NEC, or TI to make it all happen. Some companies are smart enough to know that "you scratch my back, I'll scratch yours" can actually work to their benefit. Some want to claw the other guy to shreds and feast on carrion. Trouble is, what do you do when you need more meat?
<<<Not clear to me, but it illustrates why some would argue that Porsche would make more, because each consumer who bought an upgradeable Schwinn was one less consumer in the market for a Ferrari later, even though Ferrari received royalty payments for each turbocharged engine.>>>
You have a good argument and one I'm sure USR is gambling its life on. And if ADSL modems were a consumer product, as you're assuming, it would be unnerving. As it is, ADSL will be sold and installed by local telephone companies --- or in some cases ISPs and guys like MCI. Now think about it. I'm computer illiterate when it comes to hardware and if I have to decide between going to CompUSA and buying a new modem that I'll have to install myself and phoning my carrier to have someone come out and get a fast modem installed---and have the cost averaged out on my monthly bill---I'll choose the phone company any day. Hands down. No debate.
<<< But I do think it helps to illustrate the point that an easy upgrade path to future technology can have an impact on which technology supplier prospers the most>>>
No doubt about it. I'm just not convinced it's valid because of the arguments I just stated. And I am convinced this world is enormous and the bandwidth market big enough for more than one player. I hope USR realizes this, too.
<<<CAP more prevalent than DMT.>>>
Yes it's more available in terms of numbers of chips. I was referring to carriers who've committed to deploy it. It's my understanding that no European carriers will install it unless it's ETSI standard, and that many of the North American carriers will hold off if it doesn't get ANSI approval. I certainly don't want to start a CAP vs. DMT debate because I think they'll both be deployed initially. Once availability and price are equal, I wouldn't want to be Globespan.
<<<Sorry if my point was unclear. I wasn't actually asking anything.
I was trying to present a plausible explanation for why someone else
had used the term "all relevant standards" (or some term very close to
that) when discussing or writing about USRX's DSL plans. If I recall
correctly, you specifically invited posters in general to offer their thoughts on what that might mean. Since I have learned a lot from reviewing the posts by you and others on this thread, I tried to give something back by offering what I viewed as a plausible explanation, in hopes that you might find it helpful.>>>
Thanks for explaining. The problem with basing arguments on "ifs" and "it's possibles" is that you reach some incredibly inaccurate conclusions.
<<<In my first post to this thread (#12498?), I did try to "bracket" the maximum amount of DMT royalties that could have been received by AMTX in 2Q97 by process of elimination from the total reported AMTX
revenue stream in AMTX's most recent quarterly report to the SEC. But
hey, what do I know, I'm just a clown.>>>
Royalties aren't paid until product is sold. As for being a clown, that's just your tag. It has nothing to do with who you are anymore than my tag makes me a muse.
<<<If you are aware of any place that specific deal terms have been
disclosed, I would greatly appreciate being told where or how to find
them. >>>
Again, phone the company. No one publishes the specifics of their contractural agreements for public viewing.
To summarize your post, it seems to me you're worried that USRX will buy TI's chips with Amati's ADSL footprint, ramp up production, flood the market, and undercut everyone else. I suppose this could happen, but what happens to USRX/COMS if some other companies, in fact several other companies, ramp up production, deploy through telcos and ISPs, and steal the market from a company still peddling away on non-standard 56K and non-standard CAP -- and at fractions of the speed? Will USR gamble twice on flooding the market with non-standard products? In one case a product that doesn't work as well as advertised and in the other case one that doesn't work as well as the competition?
It's a big world and the bandwidth market offers room for many players. Smart investors will spread their money around. I'm betting on Amati, and Ascend/Cascade, and while I still have WSTL, I'm not convinced it'll be the power I once thought it would be.
Now, I'm off. I haven't even had my first cup of coffee.
Cheers!
Pat
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