Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Brightpoint - CELL -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (1376)	2/1/1999 6:03:00 PM
From: Brian Lempel	Read Replies (1) \| Respond to of 1999

I spoke briefly with Phil Bounsall reagarding Iridium. I'm not sure if it improved my understanding...it probably raised more questions than it answered. My first piece of business was to clear up the possible conflict with CELL/CLST distribution press releases. It was clarified that CLST delivers global roaming phones as well as customer care (lost/broken phones). My next question was whether Brightpoint would handle all the phones. The answer was no, since 25-40% (the range he gave me) will be delivered direct. He suggested contacting IRIDF for more exact figures. Now...I was quite mistaken, apparently, in thinking that the $3000 cost of each phone would in some way flow to the bottom line. This is not so since tey are never in ownership of the phone (as in the trading division, I presume). Now the number he gave me was that typically 1% of the phone costs flow to ?????. I had said top line...but this seems like an extraordinarily small figure for top line. I think he must have meant bottom line profits. Last quarter, they did $510 mm in revenues. 81% came from distribution. 3.75 mm handsets were distributed. That comes out to revenues of $110 per handset. So obviously this is not 1% of each handset's cost! But as far as net profit...this may be a more reasonable estimate. This could indicate a net profit per phone of $30. A nice cut, I'd say! This would lead to an increased .20 in profits. But who knows if these numbers are even close. I guess this highlights my ignorance as to the way that CELL realizes its revenues/profits. Since my investment in CELL is not based on IRIDF, it is somewhat a matter of curiousity. I still find it obvious that IRIDF is still not factored into estimates...so we have somewhat of an advantage if we could find out the revenue/profit structure of the deal. Anyway...it will all become very clear next quarter...IRIDF will have meaningful shipment figures and you can be pretty sure that the numbers will be broken out... Until then, Brian