MB et al.,
Questions/perspective:
Amati will make money from two sources, licencing and modem sales.
Licensing-
Amati has the ADSL ANSI standard.
Aside from the market place seemingly ignoring this (Globespan-CAP shipping, as I understand it, relatively significant amounts of product, and ADI using DMT w/o intention to license from AMTX).
Considering just a presumed ANSI ADSL-DMT future. ANSI gave AMTX the standard and allows them to charge a "fair and reasonable" price for licensees to use their line code. What is fair and reasonable? How much (even approx.) can be expected per license? What do conservative research models project for earnings and revs from licensing? (I have never seen research on AMTX).
Modem sales-
Competition (near future):
Cable modems. With all the rollouts, definitely need to watch here.
ISDN - seems that AT&T and other Bells don't think this is dead (yet, anyway).
USRX wants to have their v-everything out in Q3 (summer). They are aiming to sell these at $200. They will offer ANSI v.34, their proprietary 56K, Aware's DMT (USRX is just one of many Aware licenses, which is why H&Q picks AWRE as their top ADSL pick) as well as CAP.
Motorola and TI can sell their DMT chips to anyone. Presumably Rockwell will offer a v-everything equivalent, using their own 56K, hoping (as is USRX) for the standard for 56K.
ADSL works at it's reported rates on distances of approx 1 mile or less from the Telco CO. It further requires connection at the CO with a compatible ADSL modem. For consumers, a safe, versatile (and relatively inexpensive) choice of modem will be ones that offer everything. It doesn't seem that AMTX will do this.
An additional concern, is the integration of ATM. Many are heading in this direction (eg., Ascend has purchased Whitetree, Pairgain has purchased Avidia, for this purpose).
(also see 3COM - [may require free registration to view] inquiry.com
Is Amati working on ATM compatibility?
So, I question Amati's ability to make money with licensing (in those that choose AMTX-DMT and who are willing to licence it) and wonder how successfully AMTX will be competing selling modems against names and distribution channels like those of USRX, et al. (when AMTX has product finished and in shipping quantities).
They say that when a stock or the market doesn't respond favorably to good news, it is a bad sign. Like others have mentioned here, *significant* (vs. window dressing) insider *buying* would go a long way toward establishing that the company management has faith in it's products and salesmanship (*especially* since they sold, as others bought, at much higher levels).
My two cents-
Steve |
