My guess is probably closer to $.50 or less for the INTC deal (assuming INTC ever spins a chip).
Sounds like you know as much as me about the details of the various royalty arrangements. Not much!
I am only guessing. I simply can't imagine INTC paying much more in royalty for a modem chip, particularly when they simply could have bought AWRE rather than licensing their sw.
Now that Aware mgt has finally admitted that ADI is its primary royalty generator
They "admitted" this forever. What are you talking about?
I cannot remember AWRE has disclosing that ADI generated the vast majority of royalty revenue prior to this cc.
My estimate is that ADI and GSPN were on par in Q2 in terms of ADSL chipsets shipped.
Source for your estimate?
GSPN has $75mm in rev during cal Q2, 75% of which was ADSL. At $30 ASP, that is 1.9mm chipsets. At $2 per chipset from AWRE's royalty stream of $3.7mm, we can estimate that ADI shipped roughly 1.85mm chipsets during the same time frame. These two estimates are rough but clearly show that GSPN and ADI shipped about the same number of chipsets in Q. I think ALA is somewhat higher than both ADI and GSPN but not as much as one would think. My estimate from ALA sources is somewhat over 2mm. GSPN posted a seq increase from Q2 to Q3 of 45%. AWRE's royalty guidance for Q4 is less than 20%. Assuming they are conservative and they hit the low 20's, it still implies ADI mkt share losses to GSPN or that AWRE's volume discounts are so dramatic that they are really in trouble.
We'll know alot better when AWRE reports in Jan.
Actually, the next interesting data point will be when ADI reports. AWRE's report will just fall out of whatever ADI says, or be better than expected if some other customer contributes to royalty revenue.
Gotta be careful on ADI's numbers as a proxy for AWRE's royalty. They only break out "broadband access" revenue in their cc's. This includes cable modem chips, dsl line drivers, dsl chipsets and even analog modem chips. I believe AWRE only recieves royality on dsl chipsets (and not line drivers). Also not that ADI's bb access rev was up sequentially 50% from their Q2FY00 to Q3FY00 (ending July) while AWRE's royalty rev was only up 27% sequentially.
it is still amazing to me that AWRE and ADI mgt are in denial about their competition.
Well, they deny they have any real competition except for ALA. Why do you think this is incorrect? Do you have any sources that show GSPN is taking share from ADI? Do you have any source that shows whether or not GSPN is AWRE's unmentioned 10% customer last quarter? Who is that customer, in your opinion? Some company is paying AWRE $800k in 3 months to do something. Who?
The extrapolation of contract revenue into meaningful royalty revenue is a dangerous game IMO.
Peace all I am saying is that the trends and the math are suspect for AWRE. I have not seen a bull case yet that negates this without a significant degree of hope bolstering the case. My biggest risk in being negative about AWRE is simply the stellar growth of the market. I am completely willing to consider a case counter to my current thesis for AWRE. This is not a game to me of insults. I simply want to be on the right side of the risk/ reward curve. You can get mad at me for "talking down the stock" but neither one of us will matter in the end. The stock price will find its way to the appropriate level. |
