Based upon the language used in the last 10Q regarding the agreement with the Asian OEM, I believe it is possible that EDIG technology is not in the Gateway player and that e.Digital will receive no royalties on Gateway sales.
EDIG has announced numerous "royalty bearing licensing agreements" in the past, most of which never produced royalties. It seems these agreements cover a contingency to pay royalties if EDIG technology is used.
The following 10Q statement does not say that the OEM has licensed MOS or that EDIG has "supplied" the technology for the player, but says that EDIG will be "supporting" the technology. The statement also does not specifically state that EDIG "will" be receiving royalties. I think it's quite possible that EDIGspeak makes this deal look a lot more significant than it is.
In September 2003, the Company entered into a royalty bearing licensing
agreement with a multi-billion dollar Asian OEM for the manufacture of the
Company's Odyssey 1000(TM) platform for OEM branding. The Asian OEM will
manufacture a 1.8" version of the Odyssey 1000(TM) for specific OEM branding and
e.Digital is supporting the technology, software, firmware and upgrades to the
Odyssey 1000(TM) platform. Products manufactured under this agreement are
scheduled for consumer release in our third fiscal quarter
It could be that EDIG will be paid NRE fees for "supporting" the technology, but that royalties are only due if e.Digital proprietary technology is used in the future.
Also remember that the announcement of this OEM agreement was made merely in a shareholder alert, not a PR. If the deal were really significant, IMO they would have released it as a PR on the newswires to attract new investors.
If EDIG supplied the technology for the Gateway player, there should be some specific confimation of it in the specs, the user agreement or at least in the material supplied with the player.
There is no reason IMO that EDIG can not give shareholders a revenue expectation from the agreement with the mystery OEM. Unfortunately, investors will most likely have to wait until the 10Q in mid February to find out if this agreement produces significant revenue.
