ASM – BM & Allen Prothis
Following is a paraphrased exchange after the meeting:
Question- In choosing between a one time dividend and doubling the quarterly dividend, would it be fair to say that the decision was made that way because there is more activity in the pipeline- i.e. a one time dividend only has to be supported once, whereas the quarterly dividend has to be supported on an ongoing basis- one does not worry about canceling a one time dividend - reducing an ongoing dividend is something to try to avoid.
BM – the decision was made on the sustainability of revenues.
Question- Can you give us a feel for when and how much M2M will contribute to revenues?
BM – there are two aspects to M2M – Connectivity & Data
M2M is slower to roll out than previously thought. Right now there are a lot of proprietary companies in the connectivity space who do not want to change so they can continue making money. IDCC is pushing forcefully for standardization. There
may not be much revenue opportunity on the connectivity side.
On the other hand, Allen is working on establishing something on the data side. Picture data silos for every conceivable pertinent category- i.e. Trucking would have its own data silo- health care would have its own data silo etc. etc. There would probably be a better opportunity for revenues on the service side of that rather than in the data itself.
So because of lack of standardization and where we are data wise, meaningful revenues are probably 3-5 years out.
Allen P. – I’ve been living on airplanes and just got back from the UK. It’s almost unfathomable how HUGE this market is going to be. EVERYTHING will have a chip in it – from your car down to your toaster.
Right now, an Audi automobile has more software code in it than an F-15 fighter jet!!
My thought/question-
While we might get substantially less in revenue per connection/data/service, than licensing revenue for each cell phone, would not the M2M market be 10,000 times greater???
I am sure some of you math wizards could quantify this and give us a ballpark figure.
