AWRE + 21 pts, nice article in Forbes about Aware:
forbes.com
"Aware has a simple business model: It develops its technology for other companies in exchange for licensing and royalty fees, which in the fourth quarter made up more than 75% of its revenues. Since last October, Aware's stock has surged from 4.25 to a recent high of 44.50, primarily on the news that the International Telecommunications Union (ITU) had designated Aware's DSL Lite, or G.Lite, technology the DSL standard. Aware, in turn, has licensed its G.Lite software to companies like Lucent (LU), which then sells it to computer maker Compaq (CPQ), Analog Devices Inc. (ADI), Siemens and 3Com (COMS).
As more semiconductor companies and PC makers adopt the G.Lite standard, Aware's licensing and royalty revenues will only continue to increase. "While other companies such as Orckit, PairGain (PAIR), Alcatel (ALA), and Texas Instruments (TI) are developing DSL technology as well, Aware has the advantage," says Shannon Pleasant, an analyst at Cahners In-Stat in Scottsdale, Ariz. "They have years of engineering and research technology the others don't have. Chip vendors don't have it either and they can't wait three years to catch up. That's why they need Aware."
The beauty of DSL technology is that it allows the phone companies to provide high-speed connections over their existing networks. Currently, there are millions of miles of copper wire buried underground, which handle the bulk of the nation's telephony. To rip these up and replace them with fiber-optic cable would be prohibitively expensive. But DSL essentially upgrades only the ends of the copper wire, the one end in the phone company's central office and the other in the end user's modem--with no rewiring needed. The existing cooper wire is left in place but the new DSL connection is exponentially faster than today's 56 kbps modems." |
