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Technology Stocks : Fonix:Voice Recognition Product (FONX)
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To: Dr. Bob who wrote (1345)11/18/1997 2:57:00 PM
From: franco nuvoloni  Read Replies (3) of 3347
 
Bob,

I'll try again. Obviously, you must have a misconception of what fonix will have to do and what Siemens will. Fonix does not need to "produce" anything. Period. Fonix already has a technology (their "product" if you will) and Siemens will embed it onto a chip. Siemens will "produce" chips which they will sell to any OEM interested in it.

Let's do some figures, if you don't mind, they could help you show the potential.

From a Merrill Lynch analyst who covers Sandisk (which has nothing to do with fonx) I have learnt that for 1998 world wide unit sales of cellular phones should exceed 100 million. For making things simple we take the 100 million number. Let's assume that today's chips in such cellulars cost 4 dollars (I'm just shooting numbers, but I'm sure that I'm not overstating, hope you would agree). Let's say that a speak enabled chip incorporating fonix technology sells for 6 bucks. So fonix' added value is 2 dollars. I would use a very conservative 20% royalty on 2 bucks, which is 40 cents multiplied by 100 million units equates to 40 million dollars to fonix.

Now, of course, we're just speculating, but you agree that I haven't used aggressive numbers and we are just talking about ONE product in ONE industry. If you add product by product you can easily see that your numbers of 60 to 100 million bucks in revs are easily achievable.

Please do not misunderstand, these are just my estimates derived from my own research, for what it's worth.

Regards,

Frank
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