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Technology Stocks : Fonix:Voice Recognition Product (FONX) -- Ignore unavailable to you. Want to Upgrade?

To: Dr. Bob who wrote (1439)	12/6/1997 5:36:00 PM
From: Mark Cox	Read Replies (1) \| Respond to of 3347

I visited both Siemens and fonix this year. Visiting Siemens was to do with my own work but following fonix has been a fascination. I think Scruff was right to point out how fonix is getting unjustifiably critical and virtually paranoid reactions from the boards and then proceeds to get top ranking corporate finance help with Salomon, a deal with Siemens, a link up with OGI. I totally respect those who have been able to remain relatively neutral and cautious about this nearly amazing story. Recently a newsletter was published by the Philips Business Information, Inc. called "VOICE Technology & Services News" vol 16, No. 24, had an article called "Fonix Emerges from Secrecy, Licensing Speech to Siemens AG". (www.telecomweb.com). Sony also announced this week that it was negotiating a telecoms technology sharing agreement with Siemens. Lots of others do things with Siemens, like Nokia and Ericsson and...... I think the Betamax problem was more similar to the struggle with DVD formats or the new photographic film formats. fonix is offering a completely different and superior technology. With the help of those it can convince such as OGI and Siemens fonix will participate in the market share struggle which will in the end favor the `fittest' to survive. I believe the high market cap which occured after the run from about $3 to $12 is caused totally by a sense of the future ubiquity of the technology in future products of all varieties within a few years based on the startling nature of the innovation of the speech recognition engine. Investors appear to have been found who took very large positions helping the stock appreciate to higher levels. Subsequently we have seen an evolution in management's handling of the issues. They have brought in outside expertise, legally protected the intellectual component of the technology, and changed the strategic focus by concentrating on licensing the technology rather than developing specific products or any associated radio microphones etc. Some folks have missed the fact that Siemens is a conglomerate whose $60+ billions of global sales are made up from 12 subsidiary's including the group which dealt with fonix. While this may make the strategic size of the Siemens unit much smaller it also increases the importance of the deal in size terms to them. It is not something that Siemens can do as a risk which they can write off if it doesn't work. They have made a commitment to make it work for them. While it might seem imprudent of management to have so much of a stake in both options and stock, at least we can be fairly sure that it's in their interests at some point to see the stock price rise although there may be some short term strategic reasons for it to be low. Management's hanging onto news and details seems to be perfectly consistent with managing the introduction of a new technology which might just prove to be revolutionary in scope. Many critics in a similar position might be much more cautious in similar circumstances. There is much talk of perception. How can a small company come up with something as important as this, when other better capitalized company's don't. It only takes one person to have a key idea. SAP a German software company has spent over $600 million in R&D for their software product and Windows 95 also had large amounts invested. Fonix appear to have developed this tech to its current state for less than $50 million. Then there is the difficulty of perception in stockholders. The Demo was indeed a bad day for the perception of the stock for the public who attended. I unfortunately could not go but have seen the "Jack and Jill" simplistic style of the demo. It did demonstrate the all important user independence and you choose whether you believe that they can scale it up to adapt to any number of words. Some very important folks do believe this. We have an opportunity to learn from what `those in the know' can see here. Experts have voted with their feet now. In their eyes fonix' technology is extremely valuable. I believe the perception thing will dog fonx for a while longer. Until one of the deal makers actually produces a product which demonstrates the technology fully, the press will find themselves hamstrung with nothing to catch the reader's eye. Happily the revenues (royalties, license fees, R&D support, stock purchases) will come first. Looking at the Siemens numbers is probably to underestimate the future revenue stream although IMHO Siemens may have covered much of the `burn' and other deals may well be EPS. I hope that we're turning the corner at some point in the coming weeks. Parx PS Saw an unusual voice recognition URL: www.hcooke.co.uk/technology/voice.htm I couldn't get it to open

To: Dr. Bob who wrote (1439)	12/8/1997 8:57:00 AM
From: franco nuvoloni	Read Replies (1) \| Respond to of 3347

Hi Bob, I would like to relativate part of your summary on Fonix where you say < and the lack of any blockbuster deals after all this time rule out the Holy Grail hypothesis (would you agree, Frank and Scruff?) > "After all this time" implies that we have been waiting for years for this or any other deal to happen, but realistically, when could we really have expected a deal? Only after the company received patent protection. Wether you now take april or july, it really doesn't matter, but since then not too much time has passed to see the first deal. Now, I would concede though, that we were led to believe that things could've been happening earlier, but it was also not in the managements hands to determine when the patents would've been released. The fact that they've been released in late spring, early summer has been one of the main causes for this time delay, IMHO. The perception of the time line is crucial in determining wether to invest or not in fonix and David Evans certainly did a good job to make people believe that it will take 3 years to see the first product or 3 to 4 month for the subagreement to be signed. There is nothing the company can do about it, except for signing the subagreement in a couple of weeks instead of months and bring out the first product in a year instead of 3, in the mean time we'll have to wait. For those like Bob, that are neutral, I guess this is a comfortable situation, for the longs like myself I don't think it makes sense to sell at this point. Best regards. Frank