Here are some good notes on the Oct 3 conference call
from someone on AOL.
Subj: Re:Conf Call Note
Date: 96-10-13 23:02:44 EDT
From: Maxamiga
Here's some notes I took from the conference call:
MPEG-2 encoders cost upward to $60K, probably sold exclusively to "high-end"
customers like TV stations, studios, and the like.. This is the price of a
system, not a chip!
High-end customers are also called "Industrial Customers" as compared to
regular "Consumers" or low-end customers. InnovaCom will offer the same part
for both of these market segment. THIS, is profoundly important for a new
company. Think about this: what if GM uses the same steering wheel for ALL
of their car models, and you're the one who makes the steering wheel!
DVImpact is expected to cost $50 - $200 per chip.
Typical Encoder: 500x more complex than decoders. CUBE has a 13-chip
solution. Also in the game are SONY and Toshiba.
MPEG-1: video on standard CD's , typical use is Karaoke.
MPEG-2: 4x resolution in audio and video. This is broadcast quality! You
don't know what "broadcast quality" looks like, if you have never been at a
TV studio or have a $10K-$35K video camera (once was my hobby)..
InnovaCom will exploit the wide open MPEG-2 market because:
1. they offer cost effective solution (1-chip, saving from smaller printed
circuit board, smaller profile for final encoder system, etc.)
2. they help reduce their customers' TTM (time-to-market) by offering SW
along with the DVImpact. Excellent move! One of Hi-Tech Marketing Golden
Rules: NEVER sell a device. Customers don't want to buy devices. They want
to buy a SOLUTION.
3. they are the first mover.
InnovaCom Distribution Channel (ie. How to get your product to market)
1. Nexus for US customers.
2. TJL for Euro-customers, as announced.
DVImpact:
1. Fabricated using 0.35um processing technology.
2. Will go through more chip shinkage (unclear here! Shink to 0.35um or
Shink further from 0.35um ???)
3. Typical encoders in market uses older technologies such as 1.0um
technology.
This means you can make roughly 8x more chips for the same cost. Leads to
lower chip price! This is where IBM processing technology benefits
InnovaCom, plus further reassurance of a steady supply of chip compared a
smaller fabrication house (supply risk as seen by customers).
Samples available to key customers. Production will start early '97, perhaps
2Q97.
Smallest processing technology is 0.18um by Texas Instruments.
Human Resources: DVD engineers, Motion experts, MPEG expert in-house.
Expected TAM (total available market): $400M - $1B in '97. I also saw this
on DataQuest market report.
Note: Here are some marketing terms.
TAM = total available market in the universe. Ex. If you make condoms, then
your TAM would be the estimated number of men on this "universe" (earth).
Stop laughing, just an example so you get the idea.
SAM = servable available market. Ex. The number of men who actually have
money and can get to a place that sells your condom.
I don't know what SAM is for DVImpact! It would be a fraction of TAM.
Typical hi-tech chips may only meet 10% of SAM!
Later,
Max |
