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Technology Stocks : WAVX Anyone? -- Ignore unavailable to you. Want to Upgrade?

To: Kid Rock who wrote (7564)	6/24/1999 12:04:00 PM
From: PistolPete	Read Replies (1) \| Respond to of 11417

Another interesting link Article from UK about WAVX that was posted on the Yahoo thread... uk-invest.com

To: Kid Rock who wrote (7564)	6/25/1999 2:16:00 AM
From: B Spears	Read Replies (2) \| Respond to of 11417

Notes from the San Francisco roadshow First let me say that there was a lot of information supplied very rapidly. I was sorta like drinking from a fire hose. I took a lot of notes and I hope I can convey all of this information to you. I think that there were other Raging Bull posters there as well. If there were and I have made a mistake or left anything out please let me and the rest of the board know. The meeting started with a discussion by Steven concerning the technology and then Jerry followed with the business plan and how they were going to make money. There were about 50 people present and Steven told me later that about half were from institutions. He said that was also true at the two previous roadshows. I was sitting next to a fellow who was a principal for a Bay Area private equity fund. I am going to break it up by subject as that is how I took my notes. SDMI Steven said that the solution to digital distribution of music will probably be a smart card solution. He was very comfortable with this as he stated both here and later in the presentation that the EMBASSY system can emulate any smart card. If there is more that one smart card solution (say one for MCA and one for Universal) Embassy can switch emulations on the fly. I got the feeling that WAVE is very involved with the SDMI. REVENUE SPLITTING 50% to content provider, 10% PC/OEM, 4% distributor, 4% technology partner, and 25% to WAVE. The fund manager sitting near me started taking notes here. RELATIONSHIP WITH IBM This was a question that I asked Steven after the meeting was over and I am not sure I heard him right but I will report what I thought I heard. I asked him to describe the relationship with IBM and he stated that they continue to have a good working relationship with them working to make WAVE the standard in the industry. I then said that last year we were hearing more about this relationship than we are now and did IBM plan on producing a WAVE enabled platform. This is the part that I am not sure I heard. It sounded like he said that there were problems with a distributor last year that slowed IBM/Wave deployment last year. I got the feeling that there may have been product ready or at least and announcement ready and then a distributor crapped out on them and that quashed that particular deal. I am sorry for the vagueness here but there were a lot of people around all wanting to ask questions. He made sure that I understood that they still have a good and forward moving relationship with IBM. INTELLICAST When Steven started talking about intellicast he got very animated. He is clearly very excited about this part of the business. He said that Wave is building a terrestrial TV broadcast network. The initial live tests are in one week. He went on to say that this was a great partnership between WAVE, Fantastic, and Sarnoff. He stressed that all the software that Fantastic was supplying was currently in use and was not still “in development”. Steven showed us a demo of the software and it is very slick. He said that with this system he can stream 100 gigs of data a day to your PC. Gonna need to get a bigger hard disk I guess. He talked a little bit about the AOL/HUGHES satellite deal. He said that AOL cannot do their datacasting without WAVE. I am now quoting Steven. “AOL knows it and HUGHES knows it.” He stressed that the patent for streaming data, caching it, and then decrypting it belonged to WAVE. Steven said that WAVE is working with many players in this area although he would not get specific. He did state that AOL and HUGHES know who WAVE is. I got a good warm fuzzy feeling when he talked about this part of the business. As an aside Steven said that with intellicast you will be able to use your computer as a message device. The example he gave was ..........you are off line and your favorite buddies come on line and go the the chat room......somehow via intelllicast they will be able to page you and make your computer ring so that you can come on line and chat. Sounds cool to me. THE GLOBE Should be up and running on The Globe by the end of JUNE. Steven said that there are 2.2 million publishers on The Globe and that it will be one of the first places to buy content. I guess he is discounting all the pornsites on the internet. SETTOP BOXES I asked him about STB near the end of the day. He stated that they do see a potential market there but they are concentrating on the PC market right now. I saw him outside the hotel waiting on his car after the show and asked him about this again. He said that they are concentrating on PCs first. I get the impression they think that the STB market might be tough to break into because they will have to do battle with the likes of ATT. However: at the show was a gentleman who sells STBs in China and he was looking for something like the EMBASSY system for his STBs. He would not give me much more info than that. I saw him talking to Steven after the show. After Steven told me about WAVE, STBs, and not wanting to do battle with ATT I asked him what he was talking to this man about. He said that is a different market and he had been talking to that guy for a while. Not sure what that means but hey it could be important. DIGITAL WALLETS Steven touched briefly on these and said that anyone with a digital wallet needs a secure place to store and and EMBASSY is just such a place. If they are all stored on a central server and that gets hacked.....well good bye charlie. DEPLOYMENT Steven showed a graph that listed deployment goals. Q3'99 - Wave enabled peripherals..........Q4'99 - initial OEM shipments........Q1'00 - Business services...........Q2'00 - high volume OEM shipments He said he thought ActionTec could ship 100,000 units by Christmas. Currently there are about 110 registered WaveDirect users spending at the rate of 30.00/ month. They are generally putting 50.00 on their meters. Steven then gave the magic 100,000,000 meter number. When asked how much this was going to cost to deploy this many meters he said that he thought it cost about 10 to 15 dollars per meter for materials and marketing. Damn that seems high. When asked how he was going to pay for this he said debt and equity. He then said something about using the float to help pay for this. He said that the float was probably from 90 to 135 days. Some of the people at the meeting picked right up on that and said what a cash cow that was. Steven said that the content providers wanted to be paid either quarterly or semiannually. When asked how long until 100,000,000 units were deployed Steven said he thought that the deployment curve would mirror that of modems and CD ROMS with a very steep curve but he would not commit to an estimated time. HAUPPAUGE Steven said that the interesting thing about Hauppauge is the way they talked about themselves now. He said that this was just a hardware company and they are now talking about building networks. Steven said they could be the largest Digital TV network. He thought that their market was good because they have a cost effective entry way into DTV. He said that they are on schedule with deployment of their DTV board and WAVE will supply datacasting services via intellicast. Steven also said at this point that the next version of the Wave chip will have parental control built in. A Vchip for your PC. They are working with the content providers to provide ratings for the games. NABLE Steven touched on this to say that initially Nable and Wave were just going to work together with WAVE using the NAble chip as another silicon vehicle for the EMBASSY system. As they got closer and closer together it made for sense for a merger to take place. He said that NABLE has a good group of investors who are happy to get WAVE stock. WAVE PROJECTED REVENUE MIX 15% from distribution 50% from usage 25% from security and 10% from advertising. Feney said they expect a 40% operating profit. INTEL The fund manager sitting next to me asked Steven what is to prohibit INTEL from getting a WAVE chip, reverse engineering it and putting it into their latest chip. Steve said he want INTEL to do that. He said he offered INTEL the design. He is not worriied that intel is going to do its own thing as he doesn't think that the pc OEMs will go for that. He said that Intel knows who we are and they work together. I think I got that right. VISA Steven said something about VISA wanting to create an image of a VISA card on the EMBASSY system. Not sure what this is all about but it sounded interesting. AOL In addition to the stuff I already mention about AOL in the intellicast section someone asked Steven to comment on the AOL investment in WAVE and all he could say was that it was on open market investment under 5% of the company. When asked about ongoing deals with AOL the reply was a sharp no comment. ATMEL I missed some of this but Steven said something about the ATMEL device sitting between the BIOS and the computer. The ATMEL drive will boot the computer? Not sure if I understand this but it sounds important. When Steven was asked what he thought the biggest hurdle to growing to 100,000,000 deployed meters he answered that silicon was not a problem but he was unsure how fast he could grow the organization. This is about all I was able to absorb. Perhaps some of the others in attendance could add some more. When it was over I asked the gentleman from the Bay Area equity fund what he thought. He said he thought that it was a remarkable turn around for WAVE. He did say he thought that the big hurdle for WAVE would be to convince the PC OEMS that EMBASSY could be a standard and to get them to deploy. I am sure I missed a lot but I will say that I came away from this meeting feeling very good about my investment and I will not sell a share anytime soon. Sorry for the length of the post but I didn't want to miss anything. Bob Spears