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Technology Stocks : Wind River going up, up, up!
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To: David R. Lehenky who wrote (1232)6/7/1997 10:19:00 PM
From: Neil Kalton   of 10309
 
>>If that's not the pot calling the kettle black!<<

Hey, this kettle takes offense to being called a "moron". Actually, coming from Mr. Brophy I take this as a compliment. His resort to name calling speaks volumes of his character and is also indicative of his growing frustration as many of the posters on this thread expose the gaping holes in his arguments. I, for one, am all for opposing points of view but I can't stand the continuous stream of misinformation Mr. Brophy subjects this thread to. I feel it is a disservice to this thread and to the investors who come here to LEARN.

With that off my chest, since Mr. Brophy won't answer my questions on the potential of the I2O deal I pose them to everyone else. Does anyone have any guesses as to the unit sales of the I2O chip over the next few years? A year ago Allen Benn speculated that royalty revenues from the deal would be $7 million in 1997 and accelerating from there. I believe he thought that the royalty revenues could double annually for a few years. If this came to pass, the royalty payments alone from this deal could be very lucrative for WIND.

Please correct me if I'm wrong, but if Intel sold 20 million chips with a $1.50 royalty for each chip WIND would realize $30 million cash at a 90-100% margin level. Last year WIND had $74 million in TOTAL revenues. With Intel estimating 7-10 million chips sold over the next 12-18 months it may not be very long before 20 million I20 chips are sold annually. This leads me to another question, as the chip volume increases would the royalty fee decrease and, if so, by how much?

I believe Mr. Brophy has overly trivialized the importance of the royalty payments on WIND's bottom line. What I want to know is if anyone else has any educated guesses as to the potential I2O unit sales 3-5 years down the road.

Thanks in advance,
-nk
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