2/19/09 by lbcamera. Several elements are quite different then they were in the past. Some of the text below I am copying from the transcript,and I will post my comments after each entry.
PROS
1. In respect to AT&T the new contract they
have is with AT&T Corporate which encompasses a lot more " products" then
the contract with AT&T mobility.
2. the agreement provides them with greater visibility into their long-term cost structure with volume discounts as they scale through higher levels beyond today’s current volumes and higher and more robust guaranteed service levels as compared to our prior agreement. So the
volumes will be higher.
COMMENT:
How much higher? That they do not tell us.
More volume more transactions. But they state higher than todays volumes. I wonder what the volume numbers were 2 years ago.
3."We have higher guaranteed material minimums that we have not had in our prior agreement. And finally, our related aspect is that we believe our new agreement has natural incentives in place which will allow AT&T to expand Synchronoss platform across new channels throughout the new AT&T."
COMMENT:Higher Miniminums again we don't know how much higher.
4. "Synchronoss is now managing a segment of transactions specific to local number porting for the 3G iPhone on behalf of AT&T independent of that which channel the iPhone is purchased through."
COMMENT: Yes they are now doing the activation for 3G Iphone but only in specific local areas so they are not activating all the 3G Phones. So we don't know how many areas or local porting numbers they are handeling at this point.
It could be 3 or 40.
ConvergenceNow Plus platform is focused on supporting and enabling different types of wireless enabled consumer devices to be activated and supported on multiple networks.
In extends our platform into account and lifecycle management expanding the types of transactions our platform can match such as credit card transactions, inventory management of emerging devices, trouble ticketing on devices and product catalog capabilities for emerging devices to mention a few. All of these are obviously in addition to the core activation related services that we automate for all of our customers.
COMMENT:
ConvergenceNow Plus platform is definitely
a plus (no pun intended) My interpertation of this is that Sncr will take on the responsibility of handeling the entire
product line that AT&T has to offer.
All phones,navagation devices,paid radio
and video services as AT&T has announced
that they are teaming up with RaySat to CruiseCast in vehicle entertainment and the partnership extends through Avis Budget Group. They will be in direct
competition with Sirus who is on the verge of bankrupcy. Certainly opens the door for the Convergence platform to handle many more products other than phone & cable activations. This is where I believe
is the biggest news of all. They have expanded their services way beyond what they were doing 2 years ago!
After the debacle with the failed attempt
when the 3G Iphones came out if anyone remembers it was a nightmare for the activation process. So AT&T in there
not so good wisdom decided at that time to
eliminate Sncr and do it themselves.
I guess they learned a hard lesson by doing
that so now SNCR is back in.
Question from an analysts:
Tom Roderick - Thomas Weisel
Okay, last question from me, maybe you could just provide a little bit of an update from non-traditional transaction types and update on the retailer big box opportunities that you had talked a bit about last year? And then you also mentioned Dell Computer, which seems to be a little bit out of the norm of traditionally what you have done, so can you provide an update in terms of the strategy, getting away from some of the carriers-centric deliveries there?
Steve Waldis
So, it’s a big part of our ConvergenceNow Plus initiative and essentially the, let me start by answering the Dell question, the Dell is to our relationship with Brightpoint and through Brightpoint they use our technology and platform as they go into pick back and shift opportunities for Nokia’s and Dell and which there maybe hot air cards being shifted out with the actual computers.
I think the opportunities that Synchronoss sees going forward and why we’re excited about our first appointment with CruiseCast is there is big push in the industry today to get devices onto the networks that the large carriers that are offering today and I think it is a big growth opportunity as wireless saturation happens here in the U.S. the way for wireless carriers to grow is to offer ways to allow other devices are called the non-traditional devices to be activated in the networks.
Panasonic devices for example, cell phones, cameras, navigation devices and so Synchronoss sees a great opportunity to play in that field and that we can be a great enabler of those devices and titles into the various different networks and that existed both not for just wireless but even for high speed data or IP type services and so that’s the growth area that we believe to our partnerships to Brightpoint as well as directly with consumer OEM manufacturers or devices manufacturers like CruiseCast that will want to contract us to have us managed that subscriber process from start to finish.
COMMENT:
This is all wonderful news and it opens
up many new doors for SNCR. They are not limited to one or two services they can manage. Since they did a great job with the roll out of the first Iphone
Which was the biggest roll out of a phone ever in modern history they have proven
what they can do. This was even more apparent when the 3G was rolled out
eliminating Sncr and was a total failure.
Ok now for the CONS:
1. I believe that the new contract with
AT&T corporate will only tie Sncr into
a more dependent situation that they are in now. Currently AT&T represents 66% of
Sncr's revenue I think this number will
be greater in the quarters going forward.
Not good to have all your eggs in one basket as we all know.
2. With the current state of the economy
and the unemployment level reaching historical levels and the slow down of consumer spending I don't think 2009 will
be a year that the average consumer will
be looking to spend money on what I call
ammenities like the latest and greatest
cell phone,navagation system,laptop etc..
Sncr is not the only company faced with this dilema. If the economy was not in the condition it is currently based on all that I read and heard on the conference call I believe Sncr's stock price would be considerably higher. 2009 will be tough for everyone.Once the economy stablizes
whenever that may be, look for Sncr to make new highs if they stay on track with the plan!
Best to all LB
