Thanks for the link, JBII. Here's the text:
About the ICOM technology, by a Yahoo long-term investor (herman4045) who has, probably, done more dd than anyone on ICOM. This post is made up of 10 individual Yahoo posts on 5/27/99 and catalogues ICOM products and technologies:
PART I (http://messages.yahoo.com/bbs?board=4686766&tid=icom&sid=468...
Recently Equitty and I spent three days in Dallas, much of it at Intelect enhancing our information coffers. As many of you know, we have spent much time and energy staying informed and focused on the company's progress over the past eighteen months. For some it may appear extreme, but at the very beginnings of our investments, we realized that the developing product base was by no means ordinary and addressed markets whose surfaces had not even been scratched. It was also apparent that some of these products were positioned to create a "paradigm shift" simply because of the revolutionary way they resolved issues in their respective markets. On the dark side, it was obvious the risky nature of attempting to develop multiple products on limited capital. Although we have had concerns during this period, we have always understood the migratory path of Intelect and the historical significance's. Regardless of the bumps and bruises that Intelect has endured, we have been relatively comfortable in our investments ................ Knowledge does creates confidence.
The company currently produces three products:
1) SonetLYNX/Fibretrax (Networking)
2) High end DSP boards (DSP)
3) LANscape (Video and Video Conferencing)
and in development the CS4 Programmable Intelligent Services Platform (Telecom Networking).
PART II (http://messages.yahoo.com/bbs?action=m&board=4686766&tid=ico...
We expect all to contribute to the success of the company.
Unfortunately, the development of these products has not been easy and they have been hampered by the disastrous Korean debacle, which resulted in five straight quarters of declining sales. From the investor point of view, this was equally disastrous. Plunging from a high of almost $11/share to .50/share, it has taken its' toll on many investors.
The following is a discussion of each product and it's potential.
NETWORKING:
I wrote an article awhile back for the board entitled "What's all the fuss about", which addressed, in a very basic way, what the SonetLYNX product is all about. It is the onramp and offramp to the information superhighway. This little black box, and it is truly a small device, addresses the network market in a most significant way. It is migrating towards becoming a full Multi Service Access Platform (MAPs) product. Actually the proper nomenclature is Integrated Access Device (IAD). The idea behind it is to access signals from the public network (PSTN) and make it available in any form to other networks. This is known as the Access market. Essentially the SonetLYNX/MAPs is a backbone product and in it's fully developed form will be able to access "any signal" (T1/ E1, Video, OC-3, etc.), process and convert that signal to "any other signal", distributing it to multiple points. It is a product that undercuts legacy methodology and products in very dramatic fashion. To accomplish what the SonetLYNX/MAPs product achieves, legacy systems require many pieces of expensive and varied equipment. Not only that, when a change in a legacy system network is necessary, there is generally a requirement to modify the entire network such as changing out Ethernet to Fast Ethernet
PART III (http://messages.yahoo.com/bbs?action=m&board=4686766&tid=ico...
With the SonetLYNX/MAPs product, you merely change a card. The economic impact of such technology is obvious. Although the concept is simple and cost effective, attainment has not been easy and has required superior engineering and aggressive and forward thinking leadership. The (SonetLYNX/MAPs)/Legacy relationship is very analogous to the Integrated Circuit (IC)/Transistor relationship. Prior to the development of the IC, every computer had to be built with multiple transistors to address various computer functions. It was unwieldy and expensive. The IC eliminated this problem by the inclusion of the transistor as part of the circuit during the manufacturing process. Essentially one product replaced many. The integration of voice, video, and data into one signal, and distribution of that signal, by the SonetLYNX/MAPs product has achieved similar simplification and efficiency.
Initially the success of SonetLYNX could be summed up in one word, "Korea". Unfortunately it was short lived and proved that having most of your eggs in one basket can be risky. Although the original concept was to use Korea to springboard the product domestically, fate and the Asian financial engine dictated otherwise.As part of the company's response to the loss of Korea, the company implemented aggressive operational cost controls resulting in a 20% reduction in R & D expense (45% Dec vs. Jan), a 5% reduction in operations expense over 1997, and significant cost reductions in component costs, all attained without any reduction in quality of operations.
PART IV (http://messages.yahoo.com/bbs?action=m&board=4686766&tid=ico...
Bill Barnett (President of INT) alluded to an international potential during the most recent Conference Call. There is development being tasked resulting from this potential to add certain features and functionality to the SonetLYNX, which will make it ready for that organization to test. Should those tests go well, and there's no reason to believe otherwise, a deal should be in the offing by fall.The size and pervasive nature of this potential is such that a new market will evolve for the SonetLYNX/MAPs product, the Competitive Local Exchange Carrier (CLEC). The revenue that this potential will produce is impressive, but perhaps more importantly the credibility that Intelect will elicit will help spearhead this market resulting in even larger revenues. CLEC's are an ideal market for the MAP as they have no legacy system to support and with deregulation, the field is brimming with them. In addition, the modifications that are being developed will open up another vast and pervasive market, the Internet Service Provider (ISP), which represents a major step towards Intelect's Internet perception.
PART V (http://messages.yahoo.com/bbs?action=m&board=4686766&tid=ico...
As many of you are aware, Philips, as a result of the Olympic deal, is on the horizon. Philips is the world's largest provider of Intelligent Transportation Systems (ITS) and has indicated more than a passing interest in the SonetLYNX/MAPs product, which as I mentioned in prior posts is now the premier network product for ITS. Those two deals in q1, the ODOT and ITA, were more than just revenue producers. Ohio and Illinois are just two of many states that have now adopted the SonetLYNX/MAPs as the defacto technology for ITS. What this means is that contracts are now being written around this technology virtually assuring that state highway projects all over the nation will use INT's networking box. We saw this with the MFS (Garden State Pkwy) recently and others should be following this year. It's a large and growing market. In fact, virtually all private networks, whether it be ITS, prison systems, airports, etc., are ideal candidates for the SonetLYNX/MAPs product and there are tens of millions currently in the sales pipeline. It truly does appear that the SonetLYNX/MAPs product is now on course.
As the SonetLYNX/MAPs products reaches full maturity including the migration from OC-3 to OC-12 and beyond, entire new markets will be opening.
PART VI (http://messages.yahoo.com/bbs?action=m&board=4686766&tid=ico...
DIGITAL SIGNAL PROCESSING (DSP):
For many investors, DNA is a little more gray than INT, less obvious, has had little pr and is probably a little more difficult to comprehend. We have all known for sometime that 99 was going to be a solid year for DNA. DNA does high end DSP. They do not do commodity or generic low margin work. It's all high margin. A strategy has developed around the TI C6x processor. DNA did original and follow on reference boards (EVM's) for the C6x and, of course, those designs were functional and have provided private labeled boards for Pentek to market. In addition, DNA will be marketing boards with the DNA label on them apart from catalogue sales. Another focus for DNA is the Government's Commercial Off The Shelf (COTS) program. Many of you may be familiar with the fact that Uncle Sam has spent many exorbitant dollars building redundant and relatively inexpensive products that you or I can merely buy from the commercial market. The COTS program is designed to take advantage of this and save the government money. DNA is positioning their high end boards to take advantage of this program. DNA also has a strong relationship with Raytheon, the Joint Tactical Terminal (JTT), and that is expected to become even stronger. DNA's more recent developmental focus is targeting both networking and communications markets.
PART VII (http://messages.yahoo.com/bbs?action=m&board=4686766&tid=ico...
This thrust has given rise to DNA's entry into development of a more simplified processor know as RISC (Reduced Instruction Set Computer), which compliments the use of DSP's. Just as Intel has dominated the general processors which are the brains inside our computers. Texas Instruments' Digital Signal Processors (DSPs) and Motorola's Reduced Instruction Set Chips (RICS) are the brains behind communications - and with everything going digital, a new generation of board designs are required to 'raise the intelligence in the network' and provide the next generation of communication services. Having played a crucial role in the design and development of TI's revolutionary new DSP family, Intelect's DSP Design Center are the leaders in these high-end board designs.
We are all aware that there has been delays in shipments (rampup) of the C6x to TI customers. Currently there is an allocation system for the C6x. Some are now trickling into DNA. This delay has no real impact on DNA, since the orders merely become back log and will be filled as chips become available. There is currently a backlog of well over seven figures.
There should be a healthy increase this year in DNA's business and growth is expected to be "exponential" in years to come.
PART VIII (http://messages.yahoo.com/bbs?action=m&board=4686766&tid=ico...
The closure of IVC and the integration of LANscape into INT signaled a new philosophy for this product. IVC not only sold boards, but also developed solutions. What Intelect decided was that the business of solutions should be a function of the party marketing the LANscape, the System Integrator and that's now the focus. Essentially, the company is selling boards only. It should be noted that the company is not only saving $2,000,000 annually as a result of IVC's closure, but INT will enjoy greater margin from board sales only as opposed to boards and peripherals. Currently the company is putting the finishing touches on H.323 in order to open up the enterprise market to LANscape. LANscape is expected to contribute, but does not appear to have the same potential as either SonetLYNX/MAPs or the DNA products line.
PART IX (http://messages.yahoo.com/bbs?action=m&board=4686766&tid=ico...
CS4:
We saw this product for the first time during this visit. The CS4 is a physically large and impressive device, about the size of a small refrigerator. It is a telecom networking product that is designed to meet the needs of carrier applications that heretofore have required separate and expensive equipment in order to function. The CS4 is an Intelligent Services Platform. This is the toll gate for the information superhighway of the future. It is, in essence, the first computer for telecommunications switching. So, is it a switch, or is it a device to offer new services? It is both -- its hardware can perform carrier class switching scalable from very small applications (100 ports) to very large applications (64,000 ports) while the software in its memory can deliver new services, which haven't even been envisioned as of yet. Similar to the SonetLynx/MAPs network access equipment, it offers unprecedented expandability and upgradability.
Some of the applications that can be addressed are:
Prepaid and Debit Card Services
Enhanced Paging Services
Unified Messaging
VoIP Services
Internet Gateway
Automated Operator Services
International Gateway and Call-Back
Enhanced Paging Services
Conferencing on Demand
Single Number Service
Short Message Service
Voice Activated Dialing
Call Centers
Meet-Me Conferencing
PART X (http://messages.yahoo.com/bbs?action=m&board=4686766&tid=ico...
The CS4 is currently in beta testing with an enhanced service provider. It is currently being tested for it's switching capabilities (very successfully) and will soon enter application testing. There is still development work necessary, however, there is reduced pressure, as a result of the basic product's completion, on the company to partner with someone for continued development, but Intelect is still very much interested in acquiring a marketing partner. The CS4 is not projected to be a contributor this year, however, it's potential outstrips all other Intelect products by far.
THOUGHTS:
Contrary to the proffering of some on this board, the company has become highly focused, on task, and on track to most likely provide us with a profitable company by year end. Starting in q2, we can expect to see an uptrend in revenues with q2 probably falling in the range of 6 to 8 mil. Every quarter thereafter should reveal an ever increasing revenue stream.
It has become obvious from the cc's of late that the company has taken a much more conservative approach in managing investor expectations. Publicizing too much too soon has exacted a high price in terms of credibility. We get the feeling mums the word and realistically it is a better approach. But if one takes advantage, though, of what's known, ie., pr's, cc's, discussions with the IR, etc., a powerful picture emerges that we believe that we can hang our hat on.
My apologies for the number of posts that this report has taken. Yahoo has, unfortunately, limited post size to a minimum.
Good luck to all!!
Teflon |
