RAMTRONIAN's Cache Inn Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : RAMTRONIAN's Cache Inn

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

From: NightOwl	8/12/2009 1:46:18 AM
	Read Replies (1) of 14464

Wow... Up 0.30 in a week on a down market... Hope none of you were out chasing shares. Needless to say none of the news I posted today on that SRC research suggests that RMTR will be getting any related income stream in the near or long term. I just listened to the cc they held at "Morgan Keegan" and frankly I don't see much basis for flag waving there either. Granted I haven't seen them this excited about a product line before... and this is certainly the first time I've seen them market a product under its own name like this "MaxArias" trademark. But still the "risks" involved here are huge. First of all we've been down the RFID path before. Just by way of example... and without any reference to the RACOM fiasco... here's a PR piece from 2002 regarding the "Fujitsu-STM" collaboration on a FRAM based passive smartcard: contactlessnews.com Now if we flash forward to 2009... we know for sure that Fujitsu subsequently initiated a line of FRAM based cards, but the "cutting edge" NFC passives offered by STM? They are all old IP... ROM/RAM/EEPROM/FLASH: tmcnet.com st.com STM has obviously chosen to go the low cost/ low margin route in NFC passive cards. The most troubling thing to me is why? I think the answer is reflected in the 13th and 14th slides that RMTR presented today showing an estimate of the RFID "addressable market" and a comparison of the MaxArias product to two of its competitors' products. Clearly RMTR has used an addressable market figure at slide 13 that includes both the high end (new IP) and low end (old IP) chips to be sold as NFC tags/smartcards. How much of the "$1B+" expected will be at the high end where FRAM wants to sell I really have no clue. But experience tells me that cost is always a major driving factor in IC purchase decisions and "good enough at the cheapest price" invariably trumps "best performance at the highest price" every time. Lets assume there is indeed a high end market out there that can absorb 13M units/year at an average ASP of $0.85/unit. That would produce a tad more than $11M in revenue per year which, excluding all other costs, would roughly equal what the IBM agreement initially cost RMTR. Frankly I think they will be tickled pink if they can generate $11M in 2010 from the IBM deal. But how long would the $0.85/unit ASP last and will a 13M unit market be theirs? ...For one year? ...For more years? The comparison against the competition they're using doesn't include TXN which we know is planing to market their own devices in particular to the government ID sector. It doesn't include Fujitsu which we know is marketing to the industrial/tracking market. Nor does it include NEC or Samsung whom we know have system LSI designs suitable for smartcard/tag producers should anyone offer to buy them in quantity. We also know the anti monopoly laws say that a US company cannot agree in advance to divide up a market with competitors any where. So we are left with the question... can RMTR/IBM out market TXN, Fujitsu et al as far as cost/performance for these smartcard/tags are concerned? Frankly I don't know the answer to that question. Even assuming that IBM will have a natural willingness to employ the MaxArias line in any RFID/Wireless system sales they may make, I can't imagine they will do so regardless of their bottom line and BOM internal pressures. Based on past history of the company I think they are shooting far too low with a market for a product that starts at a $1.20 ASP. That pricing is not likely to last a quarter and unless you can also start by selling hundreds of millions at such a price... Well its a tough business to be in. But talk to me about a 20M unit niche for a $10/unit 8Mb product. Why for instance could they not design a 8-32Mb F-RAM+mcu SoC to serve as a high end cache/controller for the SSD market? With the costs of SSDs and the performance bonus they could offer who would even notice a $10-$40/unit price hit? Then... maybe... we could talk about stock option compensation/rewards. Hey... but what do I know... I just live here. Sure as hell ain't gonna be buying any stock here. 0\|0

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next