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Technology Stocks : Jabil Circuit (JBL)
JBL 251.29-0.7%Jan 16 9:30 AM EST
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To: patroller who wrote (2251)12/18/1997 9:17:00 AM
From: 18acastra  Read Replies (1) of 6317
 
Is Next Level Systems (NLV) announcement significant upside for Jabil.

Next Level is what was formerly General Instrument. They announced a huge deal yesterday to supply TCI with the next generation of set-top boxes. It added about 20% to Next Levels stock price. In the Jabil call, they mentioned set-top box business was coming along nicely. I have been told, but am unable to definitely confirm that Jabil is making the boxes or boards for Next Level.

The most recent numbers I have seen on the Next Level deal were $4.5bb for 15mm set-top boxes over a five year period. This equates to $300/box ASP for Next Level. If Jabil is doing these boxes and they get $100/box * 3mm boxes a year, that is $300mm a year in new revenue. This seems much to big to be true. I have also seen numbers at around 5mm boxes over a 5 year period. Even at $50/box*1mm boxes/year, you get an extra $50mm/year.

Here is what I would love to confirm, if anyone knows:

1) Is Jabil making these boxes
2) Are they assembling the whole thing or just doing the boards
3) How much unit volume is anticipated
4) Is this win with TCI for Next Level a surprise for Jabil or had they been including all along in their planning/guidance?

Seems interesting. Any thoughts are appreciated.

My opinion.
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