Eveline, Pricing of the NC boxes, the Videocam, and the software are not firmly published on the CCC website. A corporation can submit a request for pricing via e-mail, but it doesn't look like the exact pricing has been fully determined and probably won't be until an indication of actual "demand" appears.
However, Corel has said in the past that they would like to sell the basic NC box for about $1,000. As I recall, Corel had asked somewhere around $800 to $1150 per seat for the videocam, interface card, and software. So using these assumptions a quick calculation is fairly simple. Maybe someone will post the actual proposed pricing to a customer such as GM, based on large quantities.
100,000 NC boxes $1000 ea. = $100 M
Direct Costs - Approx. 70% = $ 70 M
Gross Margin - Approx. 30% = $ 30 M
I think CCC will be lucky to attain a 30% gross margin in a competitive hardware environment. Don't think for one minute that Sun and others are not working to "one up" Corel's NC.
If the NC box and videocam are combined, the numbers grow. Assuming $2,250 per unit:
100,000 VNC's at $2,250 = $225 M
Direct Cost - Approx. 70% = $157.5 M
Gross Margin - Approx.30% = $67.5 M
At this point it is unknown what CCC's overhead structure will be, so that will likely be the final variable to determine the potential profitability based on 100,000 units sold.
Certainly these are my assumptions. I would appreciate any other opinions, or better yet, actual knowledge on the variables.
Conversely, if Corel jumpstarted sales of the Suite 8 and sold 1,000,000 upgrades at an average price of $100 per unit in revenue, the following would result based on Q2's gross margin:
1,000,000 units @ $100 ea. = $100 M
Direct Cost - Approx. 20% = $ 20 M
Gross Margin - Approx. 80% = $ 80 M
If the overhead and R & D spending were reduced, look at the potential. If I were Dr. Cowpland, I would pursue the VNC lightly and spend my resources and energies to FOCUS ON THE SUITE!
Imagine 5 million upgrades of various versions of the Suite!!! Corel would definetly be headed . . .
Up, Up, & Away!
Scott
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