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Technology Stocks : Netro Corp - (NTRO) -- Ignore unavailable to you. Want to Upgrade?

To: Mark Oliver who wrote (696)	6/7/2000 11:42:00 AM
From: Rob Preuss	Read Replies (1) \| Respond to of 792

An impressive list of tough questions about the Nokia deal was posted on a Yahoo thread: messages.yahoo.com That wasn't my post (I never post on Yahoo), but let me repeat these questions here for your convenience: 1. What is the initial order quantity from Nokia? 2. What is the expected size of the orders for 2000 from Nokia? 3. How much LESS profitable will Nokia orders be than your average order? (i.e., How much are these units discounted?) 4. When do you (ever) expect to become profitable? 5. Why have your roll-outs been much slower than analysts originally projected? 6. Have you recently experienced component shortages? 7. Is the Nokia agreement exclusive for either party? If not, and if there are no minimum purchase commitments, why is this such a big deal? 8. What does your backlog look like now? Can anyone here offer some answers? The presence of an agreement between Nokia and Netro is fine, but nothing was revealed about the terms of the agreement.. so its not clear that the agreement favors Netro very much... I'd be particularly interested to know if there were any minimum purchase commitments and/or deep discount offers included. Many companies (including Netro's competitors) establish purchase agreements so that they don't have to waste time and effort haggling over every single sale. But such agreements don't necessarily translate into large sales volume. As I understand it, Nokia may well choose to use products from Ensemble Communications, or others, instead of Netro's products... and which products they choose will all come down to price/performance. As I recall, Netro just announced 36% sequential growth in revenues from Q4CY99 to Q1CY00. That sounds great until you realize that Q1CY00 revenues were only $10.5M. So their sequential increase was a couple million bucks (woo-hoo). They still have a LOT of growing to do and they're swimming in some tough shark-infested waters. Netro is a VERY small fish so I wouldn't be surprised if they had to offer generous terms to get the Nokia deal. So while Netro is currently enjoying its time in the sun, the big question (to me) is: Will the good times last? What is Netro doing to establish itself in other microwave radio product categories and to improve its products in the P-MP broadband access category? What will happen to Netro's financials when competition heats up in the P-MP broadband access category? Do they have deep enough pockets (or enough new quality products in the pipeline) to weather (or avert) a business downturn? Can they in fact achieve a sustainable high growth pattern? Rob