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Technology Stocks : DRIV (DIGITAL RIVER). Get in on internet IPO.

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To: SJS who wrote (3133)	3/27/2002 9:28:46 AM
From: david james	of 3198

Nokia plans on producing 50 million Java phones this year, an additional 100 million next year, and I have read that they expect more than half of all of their phones will be Java by 2004. They produce around 440 million phones now. So by 2004, that half may represent 250 million Java phones. Many of these will be replacements for earlier java phones, but let's say that there are 350 million Nokia Java phones actively used in 2004. Nokia does plan on making significant revenue from software, but lets be a bit optimistic and assume that each Nokia Java phone downloads 4 applications a year from the software store at a price of say $15. That's $60 in applications per phone. And of that, both Nokia and Digital River get about $10 each. So that would be 2002 $10 x 50 million phones = $500 million 2003 $10 x 150 million phone = $1.5 billion 2004 $10 x 350 million phones = $3.5 billion Even if these optimistic predictions work out, the software would revs would represent just 10% of Nokia's revenues by 2004. For Digital River, such revenues are unfathomable. No way could Digital River have these sorts of numbers from just Nokia, but this follows from just 4 downloads per phone. And does not assume that a Siemans or Motorola Java phone owner will be using the Nokia store. So what is a rational view of wireless Java revenue over the next 3 years? So far, the Nokia store is for only the 9210 and upcoming 9290, but that represents just 5% to 10% of the Java phones. However, Nokia says that they will be expanding the store for the other Java phones. What is a reasonable forcast for the Nokia store? 5 application downloads at $20 per application with 20% to Digital River? 1 application download at $12 per application with 15% to Digital River? Anyone read this here on SI and want to venture a rational estimate?

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