For those without access to AOL I am reposting what Pat put up on the AMTX folder - with Pats Permission - Thanks Pat.
Subj: The Best and the Brightest
Date: 96-12-22 05:14:20 EST
From: MF Muse
Posted on: America Online
<<<Amati may have brought the phrase ADSL to Wall street but that doesn't mean that the Street wil bring the money to Amati. ADSL agreements and deals that have an impact on future EARNINGS such as the recent one with the baby Bells and ALA or PAIR and AWRE worry me because these seem to be the deals that I thought Amati would be involved in and there not!>>>
Quickly, because it's late, the JPC contract that went to Alcatel *will* benefit Amati. They are licensing to ALA (negotiations are under way and Amati's in the driver's seat, not the other way around as I'd thought earlier); the PAIR bid went to AWRE because Amati turned it down---the offer was chicken feed and would have compromised our abilities to concentrate on larger contracts now under discussion; and as for Aware being competition, someone was overheard saying, "They're the least of my worries."
Will post more later.
Cheers!
Pat
Subj: Re:Mood
Date: 96-12-22 05:51:36 EST
From: MF Muse
Posted on: America Online
<<<Hello Pat...I'm back:) MATTKEEFER>>
Welcome back, Matt. I believe everything you say is true. Amati has the best ADSL/DMT team in the world. Even Alacatel with all its money and resources doesn't have a better team. Alcatel, ADI, ERICCY, MOT, and TXN are all using Amati's technology. Some haven't finalized the licensing, but they're negotiating. My take here is that Amati's in the driver's seat---they're negotiating the best terms possible and it's not going to happen over night.
Management? You may have heard Jim Steenbergen's tough and competent (and personable), but what you may not have heard is that Jim Gibbons, Chairman of the Board, is Amati's Andy Grove. A class act in the best sense of the term. His connections extend from one end of the Silicon Valley to the other and around the globe. Then there's Ron Carlini, Vice President of Business Development, besides fielding my calls and holding my hand when the stock goes down, he's behind the scenes fine-tuning the negotiations as they become more intense. There are others---Jim Hood, right up at the top next to Cioffi on the engineering team. And of course Cioffi, who's in a class by himself. And not to forget Tac Berry who was there but I didn't get to do any more than say hello. My loss, as he has a lot to offer.
You're absolutely right that ADSL is here. You're also right that Amati's going to be a major player. The Soros deal gets them to next summer and the end of fiscal year '97. At that point if they need a secondary, they'll do one.
There's going to be a lot of volatility. Everytime someone comes out with a CAP contract or even a DMT one that doesn't include Amati, weak shareholders will sell. So much the better. The stock will move into stronger and stronger hands. Amati is negotiating from a position of strength. Look at each announcement closely and see how much fluff is involved. For some reason all these companies, including the ASNDs and USRXs of the world, want to be the first to deploy high-speed bandwidth solutions. Most are willing to go with second-rate solutions while waiting for the best, just because they want to capture the business and/or subscribers before anyone else. If USRX and GTE, for example, start with CAP, they'll move to DMT as soon as the chips are available. Jim Steenbergen said this is no problem for the telcos. It's really a marketing move. After the DMT racks are positioned in the C/O next to the CAP racks, the marketing department sells the higher speeds to either the existing customers or those just upgrading. When you consider that ramp-up is set to begin the second half of '97 when Amati's chips will be available for commercial deployment anyway, there really won't be much of a time lag involved.
Your short term price projections might be conservative. Jim Steenbergen said we could expect 2 or 3 partnership agreements early in the year and one of these could be in the datacommunications field, which means a big U.S. house like USRX or CSCO or ASND. No names mentioned, but certainly possibilities. Other names I'm watching for are Siemens, Fujitsu and GTE. Again, not mentioned specifically by the management, but certainly brought up in discussions as among those they're talking to. I'm also watching IBM very carefully. Their Chicago ADSL tests are going well and I spoke with the director last week who said, "ADSL will be everywhere. We'll have it available next year." As for line codes, he thinks both will be deployed and doesn't have a problem with that at all. When I asked about Amati and whether they'll be involved, he said, "I can't comment." Jim Steenbergen said they same thing when I posed the same question to him.
It's late and I've got to go, but, Matt, I'm with you. Anyone wants to sell me their shares for $13, I'll take all they've got.
That's it for now. But, lots more coming.
Cheers!
Pat
Subj: Random Notes
Date: 96-12-22 06:24:08 EST
From: MF Muse
Posted on: America Online
From the Annual Meeting, in no particular order:
Company strategy:
1) Provide equipment to telecommunications companies like Siemens, Alcatel,
and Fujitsu.
2) Sell to telcos --- RBOCS.
3) Provide software and technology to semiconductor equipment houses. They
will be the channel for our software. We will get product revenue.
4) Licensing (will pay for R&D).
Two markets:
1) Video -- VOD and live broadcast. Big in Australia and France.
2) Data -- primary market in U.S.
General comments by CEO:
All RBOCS in US are testing our equipment except BA/NYNEX.
In trials with ISPs.
Ethernet, Frame Relay, and ATM being added to Overture 8 and incorporated
into generic rack.
Product expected in early summer -- MOT chip and modems, and TXN --- DSP with
our software which then make into an ADSL modem.
MOT will be cheaper; TXN more flexible (upgradeable), especially in the
central office.
NEC has new foundry for submicron chips. WE'll have VDSL out in late summer.
They'll buy 10s of thousands of modems from us over 4 years.
NEC won the order from HKT and will use our chips and modems.
In the equipment manufacturing and data communications area, there'll be 2 or
3 arrangements announced early next year.
Will be profitable second half of calendar '97 --- first half of FY '98.
GTE -- two more trials have begun. AMTX shipping racks[C/O style equipment]
now.
Confirmed shipment of 45 racks to France Telecom.
In Europe, many companies in VOD trials are now moving to 8 Mbps trials.
Project it will take $5 to 8M to finish fiscal year; have $5M now and can
draw down $5M more if needed.
Will do secondary within a year.
Our focus is the business client.
Analysts? We talk to all the houses on a regular basis.
Estimates of lines installed:
1997: 20 to 50,000 lines.
1998: tens of thousands.
Here at AMTX, we have more people focused on DMT technology than anywhere
else in the world.
After the general meeting, many conversations took place. One of the technical guys from the SI board talked to Jim Hood, Chief Engineer, and came away completely excited. He couldn't tell us specifics, only said it had to do with progress on the capacity of the TI chips.
Pairgain deal was turned down because they offered 3% and no co/production. It wasn't good enough.
GTE's ADSL chief due to visit Amati in next few weeks. The Carol Wilson article included misquotes. In Steenbergen's words, Amati is working with GTE and will be used for rollout.
NEC/HKT --- verified it as a done deal. When I asked why we couldn't issue press, he said it was up to someone at NEC and HKT, perhaps even at government level.
Confirmed shipments to France Telecom went out.
Licensing with Alacatel is assured and this will include Amati helping them develop their modem. The one they have doesn't work. [Sounds like Coke---no one's recreated it yet.]
Lucent? No big threat.
Biggest worry? Chips. They're constrained by MOT and TI.
What about USRX? "They're testing TXN's chips and TXN's using our DMT. . . yes, we'll most likely be invovled at some point."
DMT? "There are more people working on DMT here than anywhere else in the world."
BT? May begin with WSTL's CAP and if so will move to DMT as it becomes available. IF ALA of Fujitsu gets contract, Amati will most likely be involved.
Europe, including Australia, are now adding data trials. Before it was primarily VOD and live broadcast.
More later.
Pat |
