A few additional points from the Morgan Stanley dean Witter research report on RBAK.
They have 235 employees, up from 203 in June. They are projected to spend $6 million on R&D in Q3, up from $4.1 million in Q2).
They lost ($0.35) in 1998, and ($0.09) in Q1 and ($0.08) in Q2. Q3 is projected as ($0.06) and Q4 at ($0.01). MSDW projects them to earn $0.08 on $100 million revenue in 2000 on EPS of $0.00, $0.01, $0.03 and $0.04).
They had 700 units deployed in June and 1000 as of the first half of September, or 300+ units sold in Q3.
They are projected to do $15,500,000 in Q3 so that works out to a little less than $50,000 per unit (the 4 slot boxes must pull the average down).
They currently have 70% GMs on each unit. If MRVC gets anything close to that, look out. Even 50% margins on that much quarterly revenue would give MRVC $0.28 per quarter just from Red-C (assuming sales from everything else keeps them above break-even, as I discussed before). It make take a few quarters to do that, but that is what the potential is.
The RBAK CEO said 90% of units deployed now are for DSL, but they expect measurable revenue in the first half of 2000 from cable modem derived sources.
Redback's current ASP (average selling price) per virtual port per customer is $25. The big box can handle 4,000 virtual circuits, so it must sell for about $100,000, the same as Red-C.
RBAK's customers are Local Exchange Carriers (LECs - both CLECs and ILECs), ISPs, IXCs (Internet Exchange Carriers) and multiple-systems operations (MSOs) such as cable-television companies, and they are experiencing "significant interest" in product purchases from "major providers or Internet content".
RBAK is hopeful that Cable Labs will accept it's product in Q4 (anyone know anyone there we can send a Red-C comparison to? <g>)
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