A.H. You've provided the most thought provoking post yet with a superb breakdown of revenue and commentary for Q3. Although your 25% discount is likely to be closer to reality, because, as you pointed out, the channels were filled with Suite 8 in May. But what will it take to break the damn? The reality of producing an additional 50 M or 70 M in one quarter may seem as wide as the Grand Canyon, but it can be achieved through better "communicating" and "collaborating." (No pun intended here. You know what I'm referring to.)
Corel Exec's have made good business moves, developed quality applications, and are staying at the forefront of the leading technology. They are listening to shareholders and responding accordingly. Do you believe that Corel Exec's can create an "emotion" among the masses for Suite 8 that will cause its revenue stream to become a mighty river? (This might sound too cheery for some shareholder's tastes, so let's come back to earth by metaphorically comparing Office 97 to the Mississippi.)
Consider the following:
1. If $165.9 M revenue could be achieved through proper advertising which appeals to the "emotions of the masses" utilizing effective visual imagery and aural mnemonic devices, would shareholders approve an additional 10 M advertising expense? Remember the "masses" buy on emotions and perceptions more than anything else.
2. Your "new tide" idea for an advertising campaign can produce a groundswell of upgrade sales to go from Dos to Win 3.1, 95 or NT. As you pointed out, the 16 bit market is still huge. Corel just has to convince those users that they will "fall in love with WordPerfect all over again."
3. Although there is still an unbelievable amount of Win 3.1 user's, many would be willing to add memory, larger hard drives, better video etc. to 486 based systems if they only knew what components are needed to allow them to benefit from 32 bit operating systems and applications. A good direct mail campaign could provide guidelines to help prospective upgraders determine what is needed and how to get it.
4. At an average price of $120 per unit, approximately 308,000 units a month would provide the $37 M monthly needed to achieve $111 M per quarter for the Suite 8 category. In this huge computing world, spanning many countries, that's only a trickle.
5. If Microsoft can sell 16 M copies of Office 97 in five months, Corel should be able to engineer the sale of 2M copies of Suite 8 in two quarters.
6. I'd stop using WP7 in the specialty suites or even put it on the market. I'd give every Suite user of any kind the benefit of Suite 8 now. Remember it won't be long for Suite 9, possibly the last Corel Suite outside of JAVA.
7. I'll bet the Legal Suite will be a real winner. Hope Corel promotes it in the proper trade journals and on the air.
Thanks for the post. I like you projections and feel they will be close, but isn't it fun to consider the possibilities. There is a kind'a "silly old saying," and I don't know who said it, but I like it and it applies here:
Its better reach for the stars and drag your feet in the tree-tops, than to reach for the tree-tops and drag your feet in the mud.
Up, Up, & Away!
Scott |
