Scott, Agree about the VSBi royalties. This is one very critical area to Zenith shareholders where the Street's ignorqance is obvious. Every TV (and converter box) sold in the world which is VSBi digital compatible (HDTV and SDTV), must pay a royalty to Zenith.
The FCC has allowed Zenith to set its own royalty figure. It could be as low as $5 per TV and converter box or as high as $50 (similar to what MSFT charges computer manufacturers for Windows OS). Assuming that Zenith only charges $10 per TV and converter box, let's run the numbers:
In 1998, my read is that 100,000 to 500,000 SDTVs, HDTVs and VSBi set-top converter boxes will be sold in the US alone, earning Zenith $1 million to $5 million in royalties.
In 1999, the figure increases to 5-15 million sold for $50 million to $150 million in Zenith royalties.
In the year 2000, 25-50 million will be sold for $250 million to $500 million in ZE royalties.
Certainly, there are many variables to the above. If Canada, Mexico, Latin America and portions of Asia adopt the VSBi transmission standard, Zenith's royalties will be correspondingly higher.
The above indicates that Zenith could cease all operations and live off VSBi royalties alone (for the duration of its patents) and generate huge profits to shareholders. My read is that VSBi proprietary patents appear to be worth at least $2 billion.
-----------------------------------------------------------
I'm still working on my "Blueprint to Sustainable Profitabilty" for Zenith. It's a more arduous task than originally conceived. Don't dismiss its importance. I'm in contact with Zenith insiders and dealers and come from a more objective point of view than any insider within either Zenith or LGE and will make certain this blueprint reaches the proper decision makers. |
