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Technology Stocks : Wind River going up, up, up! -- Ignore unavailable to you. Want to Upgrade?

To: quelicious who wrote (2455)	11/22/1997 2:29:00 PM
From: J. Kerner	Read Replies (1) \| Respond to of 10309

I2O: Jerry Fiddler in EETimes The following was written by Jerry Fiddler for the Nov. 24 EETimes: techweb.com

To: quelicious who wrote (2455)	11/23/1997 1:18:00 AM
From: Allen Benn	Read Replies (1) \| Respond to of 10309

>Wouldn't the separation of this stream allow anbody to use INTC's >shipment numbers and WIND's I2O revenues to back out the per chip $ amount? Thank you for trying to shoot a hole in my suggestion. If there is a weakness in my suggestion, let's find it and try and fix it. If the flaw is fatal, let's throw it out and think of something else. Fortunately, your concern that anyone could back out the per chip $ royalty is not a show-stopper. We already know the Intel royalty amount is in the range of $1.40 and $1.70 (obviously depending on the RP versus the RD chip). We also know the DEC StongARM negotiated royalty was greater (probably around $2) due to lower volume assumptions. If we are told the total preliminary number of Intel shipments each month, we still might not know the distribution of RP versus RD chips. Add in the number of StrongARM chips when they go on-line as well as the number of other chips from other manufacturers (and we know there will be at least one other) and it becomes difficult to pin the royalty per chip down much more than it is already. And it is entirely unnecessary. Most analysts would use the $1.40 lower bound as a beginning estimate of the average I2O royalty. After comparing quarterly totals of monthly preliminary figures multiplied by the assumed average to the reported I2O royalty, analysts will refine their estimate, resulting in a robust number that evolves slowly as the mix of I2O chips changes over time. Frankly, the use of any reasonable average royalty is good enough for analyst work. Finally, it is not caste in stone that the precise royalty per manufacturer per chip must be shielded from public eye. So even if someone deduced the exact figures, it really wouldn't matter. Allen