Here are a few comments on ASP. First, the sooner Radica ditches the Handheld Casino business, the better as far as I can tell. At $3.43/unit ASP, which is $1.21/unit lower than even the low-margin OEM business, they can't be making much, if anything on this line. I hope they are just selling old inventory and not wasting manufacturing capacity on making any more, unless they can add new products which carry a higher price.
Notice the decline in ASP from 1994 to 1996, and the almost $2 jump from 1996 to 1997, though the $7.10 ASP in 1997 is still not as high as $7.80 in 1994. The jump is mostly a combination of the large increase in Sports games, at $11.13/unit, with a little help from the similarly-priced but lower volume Heritage and Action products, combined with a large drop in sales of casino games.
Since the OEM business is growing slower than Radica's higher margin products, I would expect ASP to keep rising through 1998, as the low-price OEM products will continue to decline as a percent of overall sales.
Dennis |
