VCD dies in 2001. SVCD will follow soon after. That's $130M of revenue to replace. The other $220M needs to grow fast.
C-Cube, the stock suffers from low visiblility, uncertainty of future revenues.
If you through-out VCD, C-Cube is DVD decoders, Encoders, Divicom/Cube set top box solutions, and Divicom. Divicom, the systems unit, needs access to C-Cube's chip development. It helps them be first with a system. C-Cube needs a systems division to sell a complete solution to its customers.
The Sonys, Philips, Toshibas, Thomsons of the world already have system divisions. They may not buy from C-Cube. But any Chinese OEM could compete with them, if they had a complete solution, and earned a reputation for quality. In the 60 & 70s, "Made-In-Japan" was a symbol of low Quality. Today, it's a very high quality lable.
Without VCD, C-Cube's parts fit in the Divicom business model. Divicom is becoming symbol CUBE. If your looking to add to revenues though a purchase, it's crazy to spin-off C-Cube. VCD may be declining, but when Divicom was a pup, VCD was its mother. 20% plus R&D was paid for with VCD. Now let Divicom the settops carry the load. Besides DVD and the "The Holy Grail",(which won't add to revenue this year) it's all the symbol CUBE has.
C-Cube Microsystems has been spun-off already.
VCD dies..........................
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