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Non-Tech : Amati investors
AMTX 1.435-1.7%1:03 PM EST

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To: SteveG who wrote (19659)6/13/1997 3:52:00 AM
From: pat mudge   of 31386
 
[Ballpark numbers]

Steve --

Royalty fees are difficult to compute because of the numbers of patents and other issues like volume and price, especially in regard to the C6X. Since JS has said licensing revenues most likely will cover R&D, I think taking the 1996 R&D figure of $3.8M would be conservative when estimating 1997 royalties. I doubt there's any way to get a more accurate figure at this time. Even if we knew all the formulas, we would still have to estimate numbers on chips and modems. One analyst estimates the TI chip will command up to 30%. I've been told the margins on software upgrades are extremely generous. On the other hand, CG has been estimated at around 5%. I've never heard cross-licensing mentioned in connection with CG, though I have heard it mentioned with Alcatel.

I hope this helps.

Regards,

Pat

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