Cliff --
Thanks for the kind remarks. Have you ever seated 34 teenagers for dinner? Take Valium first. Actually, it turned out surprisingly well. At one point they were all crowded into the kitchen and what a sight! It was a sea of tuxedos and satin gowns. Wasn't it W.H. Auden who said, "It was good to be young and in England?" Well, change that to Del Mar, at least for that one night.
Now to business. I transcribed the Bloomberg interview with Jim Steenbergen, such as it is.
Regards,
Pat
Bloomberg News reporter Dan Morrison interviewed James Steenbergen, CEO of Amati Communications, this morning, Dec. 17, 1996.
DM: There are many ADSL companies vying for equipment. Will there be consolidation?
JS: There are many small players involved right now--- 20 to 25, and more each day. Small players are forming partnerships and alliances. Eventually there'll be maybe 8 to 10 large manufacturers.
DM: How will you grow?
JS: We develop DMT technology. Our intellectual property is very strong. We provide technology to larger companies and assist them in developing theirs.
DM: Will you license?
JS: Yes, but far more. We're writing software --- for Texas Instruments, for example. They'll ship our software with their chipsets. NEC/Japan is co-developing VDSL chips using our software. They'll also purchase modems from us.
DM: Are you partnering?
JS: Yes. Our semiconductor partnerships are in place. We need data communications and telecommunications equipment partner. We'll supply the technology for a product fee *or* give them our modem technology for 20% of the business.
DM: What kind of companies? Baby Bells?
JS: No, equipment makers in telecommunications and data communications. MOT, TSN, NEC --- co-develop chips and modems; we'll [also] sell them modems.
DM: Isn't the stock a high-flier? It hit 32 or more. . .from 4 a year ago. You showed a loss of $3M on $11M in revenues. You're in the early stages of development, true?
JS: We're in the early stages and we'll be up and we'll be down. Most of our programs are in lab trials and field trials --- this give us uneven revenue streams. We had $4.5 M in revenue last quarter and we'll be significantly lower this quarter.
DM: What about cash burn?
JS: The street thinks $5 to 8 M in the next 12 months.
DM: When will you be profitable?
JS: As soon as there's any commercial deployment. It'll happen by the end of 1997, early '98.
DM: The phone companies are testing? How much faster are they [modems]?
JS: We have 40 trials in progress now through the world. Most are 4 to 8 mbps, that's 100 to 200 times faster than anything the most popular modems in use now. And this is over copper lines. Because of these speeds we can do live broadcast with MPEG2 encoding. We're the only ones doing live video trials in the world; we have trials in Austrial since January; and others in Europe and 6 and 8 Mbps in the U.S.
DM: Which Bells are testing? What about AT&T and MCI?
JS: AT&T and MCI have been held up with deregulation. It's been difficult for them to get a hold of copper pairs. That's changing. They're beginning to test. For commercial deployment, we're working with ISPs. . . [Internet Service Providers]
DM: Which ones are you working with?
JS: I can't say at this point in time. We're working with several.
DM: Are you adding others?
JS: Yes. They're finally finding out how to get involved.
DM: What about price? $2,100 a line now?
JS: You have to consider the time horizon. We'll have the price down to $500 a line at full deployment. . . summer of '97. We need two things: 1) another turn in chip integration, and 2) volume.. This will happen in the summer of '97.
DM: What about consumers? Can they go down to CompUSA, for example, and buy a stand-alone modem?
JS: No. . . not until maybe 1999. They still need a modem at the Company Office.
DM: Aren't there different forms of DSL coming out? Do you have a window of opportunity before the competition gets out?
JS: The opportunity will exist like Ray Smith said, for the next 40 years. The opportunity will be here way past when I'll be running this company.
DM: Are you worried about other technologies, cable. . .?
JS: There are 600 to 700 million copper lines out there and only so many backhoes. |
