Stew, question regarding GMST and their most recent patent...but first, let me post the latest Stephens Inc. report on GSMT for reference:
Stephens Inc., 111 Center Street, Little Rock, Arkansas 72201, (501) 374-4361, FAX (501) 377-2666, Member NYSE, NASD, SIPC
Stephens Inc. Morning Research Notes
August 30, 1999
COMPANIES MENTIONED IN THIS REPORT: GMST
____________________________________________________________________________________
GEMSTAR INTERNATIONAL FYMar. EPS* Prior Est. GMST—$68.00
Rating: BUY 99A $0.68 NC
Price Target (12 mo.): $78.00 00E 0.81 NC
John Corcoran (617) 338-6170 01E 1.17 NC
Excluding one-time charges Stronger Patent Portfolio Means Bigger Upside to IPG Business
The primary competitive advantage of Gemstar is the strength and breadth of its patent portfolio—especially in the interactive program guide (IPG) arena. This portfolio just became stronger with Gemstar's announcement on August 27 that it has been issued a patent with 22 claims *covering the display of interactive advertisements in an IPG. Significantly, this patent covers the functionality of linking from an ad to the Internet so that consumers can obtain additional information, make a response or inquiry, or complete a transaction relating to the program, product or service being displayed.
The Company's overall strategy involves growing its IPG user footprint as aggressively as possible while augmenting the depth of its intellectual property portfolio. In our view, this patent as well as the one relating to Gemstar's use of the 900 MHz paging signal are especially meaningful because they relate to higher-level functionality. In other words, they facilitate the convergence of TV programming and Internet content, communication over the TV platform, and consumer participation in e-commerce through the television.
As explained in our New Media and Interactive Television Services Industry Report published on July 28, 1999, we expect the market for “couch commerce” through the TV to grow quite large over the next five years. Gemstar is currently positioning itself to participate in the recurring streams of revenue from advertising and electronic commerce that should flow across the IPG platform.
Each additional patent that is issued to Gemstar effectively increases the Company's lead over other firms in the IPG space and also raises the barrier to entry for new players which may want to enter the business.
Gemstar now boasts 146 issued patents and more than 290 pending patent applications worldwide. Since the Company often files for patents using names other than Gemstar, it is virtually impossible to tell how broad its intellectual property portfolio could grow if all of the pending applications were actually issued. Conclusion: We believe that this new patent—and any others subsequently issued to the Company—should prove extremely valuable to the extent they promote consumer adoption of e-commerce over the IPG platform, facilitate movement between TV and the Internet, and simplify the use of interactive applications delivered to the television.
We reiterate our BUY recommendation.
Stew, my question for you focuses on the patent...is it a "process" patent, or is it a technology patent relating to a proprietary technology that GMST has developed?
Just curious. If you could help on this I'd greatly appreciate it. I'm still reading the revised manual, but should be finished by the end of the weekend!
Thanks again,
Teflon |
