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Technology Stocks : Aware, Inc. - Hot or cold IPO? -- Ignore unavailable to you. Want to Upgrade?

To: Jess Beltz who wrote (7851)	2/29/2000 1:05:00 PM
From: Scrapps	Respond to of 9236

RMBS is up big today, but it has a closer business model to Aware than QCOM does I think. RMBS is an only IP company, which, profits mainly on their relationship with Intel. Now I can get most everything you ask for, and/or tell you where to get it, but I'd need some assurance I'm not spinning my wheels or feeding the beast that wants to feed on me. <gg>

To: Jess Beltz who wrote (7851)	2/29/2000 1:06:00 PM
From: KHS	Read Replies (1) \| Respond to of 9236

Jess, why not make it a project for your students. Have them write a long and short version. You grade the long version, we grade the short version and average the two. I'd love to do that.

To: Jess Beltz who wrote (7851)	2/29/2000 1:27:00 PM
From: slacker711	Respond to of 9236

: No, I have never compared Aware's business model with Rambus's. Of more interest to me at the moment is a different business model: Qualcomm's I have been trying to compare the business models of the two companies for a while and have (unfortunately) come up with a few key differences....For those familiar with the concept I am hoping to nominate Aware as a possible DSL Gorilla over on the G&K thread. 1) The biggest difference is that it seems like Aware doesnt really control the ADSL or G.Lite standards. They participated in the standards setting process but do they actually get royalties on EVERY implementation of either chip? It doesnt seem like Alcatel will pay them when they sell an ADSL chip.....same for TXN. Contrast this with QCOM....where every CDMA handset sold earns Qualcomm a royalty. If companies get tired of paying Aware it seems like they could go elsewhere for their DSL solution.... 2) Point #1 is probably why the size of the royalty is also vastly different....Qualcomm earns a royalty of between 2-5% on every handset sold. They also earn another 2-5% on the sale of CDMA ASIC's by companies such as LSI Logic or Intel. If the average ASP of an ADSL modem and a CDMA handset were roughly equivalent at $200....Qualcomm would earn roughly 9 dollars (if someone else sold the chip) while Aware currently earns about $2-$3....and this will slide to just over $1 according to Stephens Research. 3) The addressable market.....I'm not sure how big the upgrade market will be. Wireless is counting on eventually having over 100% penetration in many countries....and the upgrade market already runs at 40% of the installed base each year. It seems like ADSL might be installed once and Aware will only be able to earn a royalty once on each line. I'm not sure how often DSL users will be able to upgrade....though progress in VDSL might change my mind on this. Hoping for some feedback on this...I like Aware's general business model but am having trouble deciding how big it can actually be. TIA..... Slacker