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Technology Stocks : DSP Group: an incredible bargain? -- Ignore unavailable to you. Want to Upgrade?

To: Tom Caruthers who wrote (968)	2/3/1999 6:54:00 PM
From: savolainen	Read Replies (1) \| Respond to of 1055

[cc etc] hi tom, that was one heck of a post... been thinking some on this one eh...;) i agree with all your points... and think that magnum's weighing in today makes the acquisition angle all the more likely... and as i know you picked up from the cc, believe its gonna be cordless phones and believe we'll hear the first news very soon... as a little over a week ago they said maybe two weeks... thought the last section of the q&a had some of the more interesting pieces: --- "?: richard marshall of fendex: given what you have said so far, i would take this to mean that this is a one quarter event... or after the first quarter the earnings expectations of the company should be expect to meet those.. ? do you still expect a higher earnings in total for 99 vs to 98? royalty paying licensees, in the past you have mentioned that you have two companies paying royalties, has that number increased? can you address your projected growth rates going forward for licensing and for products... given the new product teams you are acquiring... (igal) this is a two quarter event, because we have a decrease in this quarter... if you are talking about eps this is one quarter... we do expect that 99 will exceed 98 ... i do not want to say exactly how much... but not one or two cents, it will be considerably higher... than 98... the growth of licensing we do expect it will maintain 30 to 35% growth... year to year and don't check every two months but year to year we feel comfortable with this increase... product growth, we do expect that there will be product growth 98 to 99 but because of the weak qtr, we do not be a dramatic growth but it will higher than 98... ?: the new product teams you are acquiring, the one that you have acquired and the one that you will be acquiring ... just on a more macro basis, putting the first qtr behind us shouldn't that substantially expand your product opportunities and your growth rate of products? we just started.. i mean these two, but if everything that we are planning now will materialize... we expect to see in the second two quarters of 99 revenues from the new products... ?: in terms of market opportunities... i know you don't want to get specific on what you are doing with these new product teams... but in terms of a market opportunity given your tad business... that you've had historically... and these new market opportunities, what factor? does it double the market opportunity? more than double... and much much higher growth potential than tad... ?: looking forward, if we can put the first quarter behind us, you've got a much more exciting product business... ahead of you... once you've done these things... this is right, but we don't expect the new product to have any influence... by new product i mean not the new product in the telephonic market but in the wireless it will be only in the last two quarters... ?: is your goal to get your product revenues growing as fast as your licensing revenues? let me tell you ... the move that igal described to you is in wireless communications area... has only one purpose... and this is to grow the top line of the company much faster... and because of this news (missed section).. now igal mentioned that we shall begin to see, if everything will materialize, revenues... of these new activities in q3 and q4... but we are entering here and we can tell you in what area... we are selling chips in telephony today... and telephony is strongly connected today to cordless phones and cordless phones are by far the fastest growing section in telephony... and you can expand if you have new technologies of rf and baseband to whatever you like to do in the future... in wireless and you can integrate things to be done on one chip... this is the purpose of the strategic move that took place by hiring this integrated group of people and ... by other things that may take place in the near future... but definitely the answer is yes... by doing so we are opening a much better marketing potential in new areas which are in full synergy with ours... the same customer base... and we are looking forward for this to happen because this will increase our top line... ?: rob adams, cibc oppenheimer: i want to confirm on the product revenue side of the business while we are going to have revenues going down sequentially in q1 with the shipments of the new products beginning in q2 do you think that revenues on the product side are going to grow sequentially in q2 or do you think that turn might come more in q3? it will return to the level that we had in q3 of 98 ?: on the licensing and royalties side of the business, what is your total number of licensees now? about 30.. ?: and can you break out of those licensing and royalties revenues, can you break out % of those that would be considered royalty revenues? we told you in the past that we don't break it down, but we will always say what is the .. we did start to say what was the percentage of royalities out of the total licensing...this is about 24% of licensing/royalty revenues... namely there was an increase ...from last qtr...a percentage increase and of course also an absolute number increase... ?: and do you continue to see that increasing in 99? the only thing we can do is to really hope... and based on the trend it looks like yes, but i cannot anticipate exactly... we did mention that there already four licensees that are paying royalties which compares to two that were in the past... ?: eliot prince , saloman smith barney: wireless communications... did you acquire or do you have any plans to acquire any of the technology that they had designed, and is not being utilized by their previous employer? not for the time being .. the projects we have in mind are not in the gsm.. ?: could you say what they are ... is it cdma? it will be clear very soon and we will say it in the open .. but we prefer to delay it by several weeks until we see how the second step that we are close to finalize will finish... ?: could you tell us are they starting from scratch or are they picking up on a project... i understand what you are looking for... if the second step will finalize as we expect we are starting from very very late stage.. not from scratch.. very advanced stage... ?: i was kind of surprised that you could start a project today and expect chip revenues.. they had already ... ?: so i understand.. dspg had been working on this beforehand and now you brought in some better experts... that have done it maybe successfully, commercially i dont know maybe not commercially but already have more experience than your own people... that's exactly the case .. ?: now the people that you adding, 12 people, somewhere in the north of a million dollars... in annual r&d expenses... i suspect... is this an expense you would have spent anyway or is this all incremental expense to what we were already forcasting ... are you recommending .. this is part of incidental expenses that we will have when we are dealing with this new wireless project... we will be much more specific... when we finalize the second step and we will have some discussion with analysts... ?: ahead of that i have to make some adjustments tonight... since i don't know about any of the other analysts numbers, but i was looking for a little bit north of 20% growth in r&d expenses... or a little more that 2 million ... 2.2 million dollars... are you encouraging us to raise our existing targets by the expense associated with these people or are you telling us that you were going to hire them anyway you just have them now on board in one shot... we had assumptions about growth in r&d anyway ... are you telling us that this is a new incremental expense area that if it didn't come along you would have spent our numbers and now we have to add another million or 1.2 million of expense above the 12.5 that roughly i guess others and i are using? or are you saying that no,no,no, ... the 2.5 million increase in r&d expense increase from year to year is going to include the 1.2 million dollars annual expense to hire 12 people? it will be incremental... ?: so you are encouraging us to raise our numbers? and that will be true i guess of the second stage that you will be adding sometime in the not too distant future? we prefer to be more specific when we have discussions not in this situation .. ?: well unfortunately i'll have to make some assumptions anyway .. now all these people are just going to be developing chips, they are not be going to be coming up with cores that you will license? just chips ?: doug whitman of whitman capital: i understand that you don't want to disclose exactly what you are doing in wireless... but i'm trying to get an understanding whether we are talking about ,just a basic question, this is going to be in the cell phone area or this is going to be in the home... portable phone... ? it will be in the home area... ?: so then if we follow a step further , there will be a coming integration of tad we are starting to see portable phones and answering devices integrated ... is there an opportunity to do an integration at some point down the road or is the technology so different that it is really better to have two separate chips? first of all there is a possibility it is not different, but tad... i do prefer to wait another two weeks or even less to be more specific... " --- and did you see this one? : "Voice Recognition Drives Feature-Packed Phone Jim Forbes If you're a home-office professional, Microsoft's PC-based Cordless Phone System may fill your need for a powerful and flexible way to manage phone calls and messages. For $199.95, you get a 40-channel 900MHz phone and base station, a transmitter and Microsoft's Call Manager, a voice-mail and phone-management application with great basic voice-recognition capabilities... techweb.com --- til later s