Sentinel Spoke with Robert Putnam this evening (6/4/01):
Around 6:00 PST I spoke with Mr. Putnam about questions I had emailed him in advance. They were fairly specific questions, so I didn't expect much in the way of substantial answers, butt I wanted to run them by him anyway. FWIW, what appears below is my own summary/interpretation of our conversation, in my own words.
1. I see that Apple has announced a bundling option for Rio players with teir PC's. Is this likely to spur other PC makers into action as well?
PC makers, as well as other companies have been looking hard at bundling options. When this first came up the PC makers were in a much different situation than what they are in now. They are presently trying to work out exactly what effect bundling will have on their revenues and how best to approach the whole notion. They are trying to work out how best to acquire repeat customers and customer loyalty in the face of the waning PC market. One way is to bundle jukeboxes. The establish an aftermarket presence because if Son like his, perhaps Sister might get one, then Mom and Dad, etc. This gives them an independent revenue stream as well as being able to customize product for their consumers. Obviously EDIG or anybody else would need to be able to assemble enough manufacturing capacity to fill one or more orders of large magnitude in order to secure a bundling contract and EDIG believes they have that capacity, through announced and unannounced manufacturers. It is up to the OEM's as to when they pull the trigger or not. There is no hold up on EDIG's part. It could happen at any time.
2. We've always spoken of "double digit" OEM's. What is the nature of these OEM's? For the most part, are they global (recognizable) names, are they regional (Asian) names that Americans wouldn't recognize, or are they small cap domestic companies like Hy-Tek?
For the most part, they are recognizable names, though there is a certain percentage of Asian and European companies, as well as companies like Hy-Tek. The term "double digit" still applies, but Robert would not give an order of magnitude (whether is was 10 or 60 or 90).
3. In our last conversation, you mentioned EDIG was close to being able to articulate their efforts/results to date to have a kernel of the MicroOS embedded in a silicon solution. There is a large trade show, the Embedded Processor Forum, beginning on June 11th in San Jose. Will EDIG be represented directly or indirectly at this show? Is there likely to be any announcements directly concerning EDIG before during or after this show?
Mr. Putnam had no comment about any of the above.
4. You mentioned in our last conversation that you believed there might be one or more announcements concerning a technology platform, other than digital music, before the end of the quarter yet. Is this still imminent? Will any announcement be a solo one on EDIG's part, by an OEM, or a joint announcement?
This type of announcement is still a distinct possibility. IF it happens (and it is entirely dependent on third parties), it would be a joint announcement with an OEM.
5. Fleishman Hillard has been coordinating media reviews of "Powered by e.Digital" jukebox devices. Are you privy to the schedules of these reviews? Do the reviewers sign agreements regarding publication dates prior to receiving the devices? Has Mr. Mossberg of the Wall Street Journal received a device? If he has, was it a brand other than the Treo from Hy-Tek? Are we likely to see any of these reviews before the quarter ends?
Fleishman Hillard has been more involved in educating industry analysts about e.Digital. For instance, there have been conference calls with Jupiter, Forrester, and Cahners Instat to educate them in regards to e.Digital. OEM's are responsible for distributing devices to the media for review. EDIG has an idea of when what goes to whom, because F-H also works with OEM PR departments, but it is the OEM's responsibility to insure there are devices for the media to review and to give the reviewers whatever help they may require. EDIG is not in this loop because they are not branding any players. F-H may know what's going on, but is not running the show. However, it is EDIG's understanding that there may be some reviews fairly soon. No comment on Mr. Mossberg.
6. EDIG was/is looking for Linux engineering talent. For which application do you see the most demand from our OEM customers for Linux engineering.
Linux capabilities are being asked for more and more by our OEM's. EDIG has some Linux talent in house, and they'd like to get more. No comment other than that.
7. According to last Friday's announcement, we are working to integrate voice and video technology into "handheld entertainment centers". What exactly IS a "handheld entertainment center"? What is the broad framework for delivery of such an item? Summer? Fall? Christmas? Does DataPlay figure into that type of application, or is it not related to DataPlay?
Handheld entertainment center is a term we will hear of more and more. Apparently this is something they have been working on internally for a number of months. I asked if it was like a Gameboy, or more like a convergence device. He said it was more a convergence device. I defined what I thought a convergence device was, namely a PDA which might play video games and digital music. He refused to comment any more about the nature of this type of device, and would not divulge whether it was DataPlay related or not
8. Also in Friday's agreement, the was a reference to "longterm agreements with OEM's". Are there such agreements besides the announce one with Lanier?
Yes, there are unannounced agreements. We also expect to hear from Lanier about the continuing relationship with EDIG fairly soon (perhaps by the end of the quarter)
That's it. In spite of all the optimism, Robert admitted that the only thing he could be be 99% certain of was that EDIG would indeed file their earnings report by June 30th (barring any serious problem at Ernst & Young). EVERYTHING else is in th ehands of third parties and is subject to change at their discretion. EDIG is forced into a waiting game too. Hopefully the next 3 weeks are eventful. We will see...
AI
