SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Netro Corp - (NTRO)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Mark Oliver who wrote (696)6/7/2000 11:42:00 AM
From: Rob Preuss  Read Replies (1) of 792
 
An impressive list of tough questions about the Nokia deal
was posted on a Yahoo thread:

messages.yahoo.com

That wasn't my post (I never post on Yahoo), but let me
repeat these questions here for your convenience:

1. What is the initial order quantity from Nokia?

2. What is the expected size of the orders for 2000
from Nokia?

3. How much LESS profitable will Nokia orders be than
your average order? (i.e., How much are these units
discounted?)

4. When do you (ever) expect to become profitable?

5. Why have your roll-outs been much slower than analysts
originally projected?

6. Have you recently experienced component shortages?

7. Is the Nokia agreement exclusive for either party?
If not, and if there are no minimum purchase
commitments, why is this such a big deal?

8. What does your backlog look like now?

Can anyone here offer some answers? The presence of an
agreement between Nokia and Netro is fine, but nothing
was revealed about the terms of the agreement.. so its
not clear that the agreement favors Netro very much...
I'd be particularly interested to know if there were
any minimum purchase commitments and/or deep discount
offers included.

Many companies (including Netro's competitors) establish
purchase agreements so that they don't have to waste time
and effort haggling over every single sale. But such
agreements don't *necessarily* translate into large
sales volume. As I understand it, Nokia may well choose
to use products from Ensemble Communications, or others,
instead of Netro's products... and which products they
choose will all come down to price/performance.

As I recall, Netro just announced 36% sequential growth
in revenues from Q4CY99 to Q1CY00. That sounds great
until you realize that Q1CY00 revenues were only $10.5M.
So their sequential increase was a couple million bucks
(woo-hoo). They still have a LOT of growing to do and
they're swimming in some tough shark-infested waters.
Netro is a VERY small fish so I wouldn't be surprised if
they had to offer generous terms to get the Nokia deal.

So while Netro is currently enjoying its time in the sun,
the big question (to me) is: Will the good times last?
What is Netro doing to establish itself in other microwave
radio product categories and to improve its products
in the P-MP broadband access category? What will happen
to Netro's financials when competition heats up in the
P-MP broadband access category? Do they have deep enough
pockets (or enough new quality products in the pipeline)
to weather (or avert) a business downturn? Can they in
fact achieve a *sustainable* high growth pattern?

Rob
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News