Wave Systems Corp. (fka WAVXQ)

[bbigtim]

awk/Your Revenue Model

The main point is that almost any upgrade activity at all will make Wave profitable and after that things get VERY interesting. A few more comments on your numbers follow.

First, I think that even with robust interest in upgrades, the actual percentage for all TPM-equipped machines could be low. Thats because our target customers are those who buy a TPM-equipped machine with the intention to really use its capabilities. I expect that the upgrade rate could be quite a bit higher than any of your percentages in this target subset of the total market and still lead to a pretty low upgrade rate among all TPM-equipped machines.

Second, I question whether Wave will be able to hold the $50 a seat revenue target if enterprise and government customers do purchase upgrades in volume. I'm not saying it will drop precipitously, only that I doubt that number will hold when the numbers get big enough.