<[Wild ass Guess (WAG)] Heres a data from a post I did around 6...>
They could well be right on, but I think your numbers might be a bit ambitious. (Kind of hard to follow them, actually, with the formatting in this editor)
Let's see how your numbers compare to Dataquest last December for xDSL in general:
Dataquest estimates that the number of xDSL lines will increase from
18,000 in 1996 to 3.7 million by the year 2000.
(U.S. market forecast for xDSL.
Source: InformationWeek, December 16, 1996)
U.S. market forcast for digital subscriber line, exluding T1 delivery.
High Speed Comes to Copper Wire
___________________________________1996_______1998_______2000
DSL Lines__________________________18K_______490K______3,700K Equipment Revenues______________$36M______$245M_____$1,480M
Equipment Revenue per Line_____$2000_______$500________$400
Revenue Growth_____________________---________159%________99%
Total Access______________________163M_______171M________185M
DSL Lines as % of Total___________0.01%______0.29%_______2.00%
SOURCE: DATAQUEST
This was of course, before USRX announced their $200 v.everything for summer '97. This could likely bump up # DSL lines, but reduce revenues.
Let's consider that the numbers will be maybe 50% greater than that above. So maybe 750K xDSL modems in '97, and 5M in '98?
Since HDSL is currently the more mature xDSL, though ADSL will likely grow faster, ADSL might be 200K and 2.5M, respectively?
So what license share might AMTX-DMT have?
None of the USRX component, and none of the other 8 contracts Aware has landed.
None of the Globespan or Westell versions.
For licensing, maybe AMTX will get 50K in '97. And maybe 300K in '98?
And maybe 1.5M in '99? For modem sales, this is harder. Can AMTX produce and sell price competively at around $200 / modem? In the start-up quantities that they will likely sell, I suspect to compete, they will sell at a loss before economies of scale kick in for them.
So, modem sales might be 10K in '97, 50K in '98, 400K in '99?
They should see top line growth as the industry emerges, and may get your suggested 20% margins in '98.
So maybe in '99, they gross $4.5M in licensing and $1.6M from modems.
Any anonymous posting industry analysts or wannabes out there with some feedback?
This is not inconsistent with Dain Bosworths Jan. '97 "hold" rating (at around $14) with expectation of losses until '99 at the earliest.
The big question for me is can Amati's licenses carry them if their modems don't take off soon? For how long? And if they never get a serious piece of market/mind share?
Like Pat said, this is a "venture" stock, and 90+% of venture companies don't survive.
But those that DO, usually more than make up for the other losses. So we will see what AMTX can do. In the meantime, what is fair market value for a stock without earnings for 2 more years?
Further opinion: irrespective of which chip makers sign licensing agreements with Amati, if they don't get the distribution franchise licenses (like USRX), or can't jump start their own distribution, they are going to have trouble surviving. Steve
PS. Would enjoy seeing a real research piece to compare these conservative WAGs (CWAGs) against. Any anonymous analysts or wannabes out there?
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