Encore DVD = Megabucks
This is my first post on the SI thread though I've enjoyed reading you're posts for the past couple of weeks. Wannabe Fool, your posts have been a valuable source of information.
Remember this one:
News from Asia-Pacific: January 1998 - Singapore
nikkeibp.com
On the issue of whether DVD-ROM will replace CD-ROM, Creative's Sim said this will happen in 1998. "We want this to happen earlier than later," said Sim, adding that the company will be shipping a few hundred thousand DVD-ROM drives a month and the shipping rather vis-a-vis CD-ROM drives is increasing, said Sim.
Assume: monthly sales of 300,000 Encore DVD-ROMs
a wholesale price of $225 ($379 retail)
a gross margin of .30
The gross profit from the sale of Encore DVD-ROMs would be:
300,000 x $225 x .30 = $20,250,000 per month
= $60,750,000 per quarter
= 68 cents/share per quarter
= $2.73/share per year
If you add another couple of dollars from the sale of soundcards, speakers, etc., CREAF's profit could exceed $5/share per year.
IF I'VE MADE AN ERROR IN THIS ESTIMATION PLEASE POST CORRECTING INFORMATION AS SOON AS POSSIBLE. IF I'M RIGHT, CREAF SHAREHOLDERS, WE MAY HAVE STRUCK PAYDIRT.
Best of luck,
Steve
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