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Technology Stocks : IDTI - an IC Play on Growth Markets -- Ignore unavailable to you. Want to Upgrade?

To: BigBull who wrote (7612)	3/30/1998 2:18:00 PM
From: Rob S.	Read Replies (2) \| Respond to of 11555

No apologies necessary. I think we all appreciate your input and questioning of the issues. Your conversation with Brian confirms my own previous conversation with him. I don't think that IDTI considers the MIPS market as a primary focus going forward. Pioneering the WebTV product was an exciting area to venture into. Like a lot of consumer product efforts, the squeeze on pricing is incredible. Without a lock on a market or significant IP position, IDTI faces stiff pressure on pricing. The MIPS market is highly bastardized because of the widespread licensing of the core technology. The problem confronting the competing architectures of the RISK camp, is the challenge to gain widespread acceptance of the basic architecture. The support and software momentum that builds up around the architecture is as, or more important than the inherent advantages in the part itself. So the originators of the architectures, including ARM and MIPS try to license it broadly in order to gain acceptance and momentum. But that becomes a catch 22; once it proliferates and usage goes up so does the competition. That can make it agressive a commodity market. The objectives of the licensor to maximize royalties are somewhat at odds with the profit objectives of the licensees. Not the best situation. It's better to be into markets in which you can have greater control over the IP rights. Part of IDT's strength is that it has a diversity of products. As much as we want the C6 family to grow and prosper, too much of a good thing could conspire to be a problem in the future. However, IDTI should find several opportunities to diversify the C6 core into numerous applications over the next several years. I am cautious about where the stock goes from here. I see a fair amount of risk if the market turns sour or even mild dissapointments in sales or earnings hit. And I think it will be a quarter or two before we can expect very much improvement in the numbers or expectations.