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To: Matt Webster who wrote (4732)	11/15/1998 2:16:00 AM
From: TREND1	Respond to of 9236

Matt Very good and interesting post ! Well Done !!! Some thing to think about ! Larry Dudash

To: Matt Webster who wrote (4732)	11/15/1998 2:24:00 AM
From: Scrapps	Read Replies (2) \| Respond to of 9236

Interest, but I guess that LU will buy ADI & AWRE and announce it within the next three weeks. Then we will all be sharing Christmas cheer patting ourselves on the back. <ggggg>

To: Matt Webster who wrote (4732)	11/15/1998 2:42:00 AM
From: Jon K.	Read Replies (3) \| Respond to of 9236

RE:>>>AWRE's maximum royalty model Nice job Matt: very interesting, well thought out and highly educational. I doubt you can get more than $1 per unit though. (I'll say it would be less). But in 3 to 5 years, I believe far more unit will be sold world wide. For example, China now has population of 1,000,000,000 (give or take few hundred million). With in 5 years, at least(very minimum) 2% of them will have internet. That alone will be 20,000,000 units. I think internet market is still in its infant stage. As you have mentioned, G-lite technology maybe out dated soon. That is my concern, too. These days technology changes so fast, better technology might come up next year. However, when you set something a world standard, this should last at least 3-5 years. And hope AWRE will continue to improve this technology. (But then again, what do I know.. I am just a bean counter.)

To: Matt Webster who wrote (4732)	11/15/1998 10:13:00 AM
From: Bill	Respond to of 9236

Matt, thanks for the model. I think your view has many merits. Two points though: 1. Try a royalty model of $3.00 per unit for the first 1 million per partner plus $0.50 per unit thereafter. Add $1-2 million up front license fee per partner (although much of this has already been included in this year's revenue). 2. Assume households (and businesses), not people. In the U.S., there are 102 million households. PCs will penetrate about 60% by 2001. Some subset of that 61 million are candidates for ADSL over the next three years. With the exception of Canada, international deployment of ADSL is lagging the U.S. by at least 2 years. If all 61 million U.S. households bought AWRE based ADSL technology in the next three years, AWRE would realize about $35 million from household sales plus $35 million for C.O. sales (where a compatible ADSL DSLAM is required to terminate the household connection), equalling $70 million total over three years. Add modest international rollout to this. Of course if ADSL penetrates only 40%, as you believe, then AWRE's revenue would be substantially lower. A market cap of more than $300 million is more than 5x too high, IMO. They should have stayed in the equipment/systems business.