>Any surprises in today's announcements?
Not surprised, just pleased. This thread was started with the question: "Or, is it [WIND] going up because of the sensational recent news about Intel's Intelligent I/O, I2O?" That was on February 21, 1996. It is nice to see such a significant undertaking become accepted by the computer industry, as reflected in this grand debut in Atlanta.
Even while I have always been a fan of I2O and believed in its potential, nevertheless I am humbled by the enormity of the obstacles that stood between the gleam of an idea and a real world, de facto standard. Intel is a powerful player in the computer industry, but even that company cannot simply preordain a standard that cuts such a wide swath through the computer industry. Everything had to come together: significant performance, compatibility with legacy situations, participants either perceiving benefits or fearing falling behind in an important technology race to market, and finally the fortitude of the major proponents.
Any question about I2O becoming a bona fide I/O standard has been answered. Clearly, it will now succeed in the market place, and probably will grow to become a de facto standard for I/O between any type of networked devices. Besides servers, this includes PCs, NCs, all sorts of datacomm devices, printers, backup tape drives, disk drives, and an enormous variety of thin client/servers attached to the intranet/internet.
These announcements make credible previous suggestions on this thread that Intel plans to ship about 10 million I2O chips during 1998. This is also the number last mentioned by the H&Q analyst. With WIND's royalty per chip probably averaging about $1.50, this number of shipments translates into $15 million in royalties next year, and should propel WIND's EPS for CY 1998 (FY 1999) from current estimates in the $.80 range to $1.10. This means that WIND's forward looking PE ratio is 38 or less. With EPS growth expected about 75% in next calendar year this is cheap by any standard. Consequently, long term investors in WIND can expect the stock price to continue its inexorable climb.
Allen |
