Rambus (RMBS) - Eagle or Penguin Message Board

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Technology Stocks : Rambus (RMBS) - Eagle or Penguin

RMBS 115.18

-7.7%

Jan 23 9:30 AM EST

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To: MileHigh who wrote (3808)	4/16/1998 11:16:00 AM
From: REH	Read Replies (1) of 93625

it's a good question on the deferred revenue. According to their annual report they will book these revenues in the quarter they are realized. the way I understand this is that they get the up-front fee from their licensees and only count these revenues when the finished good is delivered (meaning the the consulting is done, plans and specs delivered and the manufacturer is ready to move to production). I do not think these revenues have anything to do with Royalties, but! the growth in deferred revenue will surely lead to increased royalties. It's important to keep in mind that rmbs's licencees invest hundres of millions in equipment and plant re-design to be able to then produce rmbs-based modules. Will they just disregard these huge investments and change course for another solution - I think not (at least not short term). Also: it takes about 12-24 months from start to finish as far as implementing rmbs-based technology in the plants, first after this period will products come to market. based upon their early contracts (Intel among them) that means we should see a strong increase of royalty income towards the latter half og 1998 and in 1999. They passed the $ 1 billion mark a few weeks ago - ahead of schedule. Look at earlier post regarding market-share and royalti income and you'll see the potential. This stock is hard to judge by most people as we have very few companies, if any, to compare to. But! a close relational analysis is that what we have here is not a Netscape going up against a Microsoft but more like a Netscape beeing endorsed by Microsoft (read: Intel endorses Rambus and Intel does have the market power). that's the way I see it - anybody elses views are very much welcome!! reh

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