Tiger Telematics Inc fka TIGR

[greatday88]

From Sparky: Monday 04/12/07 1:35 pm cdt

TIGR

A Solid Buy At 50 Cents!

Tiger Telematics is the company behind Gametrac, a revolutionary mobile gaming device that Sparky thinks is about to jolt the new and burgeoning mobile gaming industry with phenomenal market penetration numbers and may even become an instant industry leader.

In an effort to explain and justify all this optimism, in the paragraphs below Sparky offers a more detailed look at the product, the team, the competition, the industry, and the actual overall potential.


The Product


In additional to being an exceptional gaming device, Gametrac also performs the following functions: It serves as a movie player, allowing users to view full-feature videos using the unit's built-in SD Card slot; it functions as an MP3 player permitting users to download, store, and listen to select audio files; it's an SMS & MMS messaging facility that lets users easily send text, image, and music files; and it sports a neat, high-resolution digital camera.

Gametrac's also equipped with a unique global positioning system; it's wired for GSM tri-band networks so it can be used in 5 continents; it supports Bluetooth wireless capabilities, which allows not only multi-player competition, but also makes connecting to any enabled device a snap; it has UBS capabilities; and with its removable memory cards, it provides users with unlimited storage.

In addition to having more features than any competing units, Gametrac's also equipped with a 400 MHz processor and a built-in 64-bit graphics accelerator and, it's the only mobile gaming unit that currently uses Microsoft Windows (CE.NET) as its operating system.


The TIGR Team


In order to accomplish the difficult task of converting the Gametrac idea into an actual product, TIGR, over the past seven months, has entered into several strategic partnerships with some of the most reputable design, engineering, software, manufacturing, and public relations companies in the world.

In the initial design stage, TIGR entered into a joint venture with Plextek, one of the largest independent electrical design and consulting firms in the UK. Within weeks, a strategic partnership was formed with Synergenix Interactive AB, regarding the use of Morphum games on Gametrac's mobile gaming platform.

About a month later, TIGR entered into a strategic partnership with Intrinsyc Software International, a Microsoft Gold Level Windows Embedded Partner, and elected to utilize Windows CE.NET as Gametrac's operating system.

Working together with Xilinx, another huge firm that's widely respected throughout the electronics industry, Plextek and Intrinsyc produced for TIGR the initial Gametrac units that were displayed at the 2004 Consumer Electronics Show in Las Vegas back in January.

Shortly thereafter, TIGR announced collaboration with Fathammer Alliance, a leading supplier of advanced 3D graphics and game technologies for mobile platforms, a move that Sparky thinks will assure that the quality of the games is consistent with the quality of the device.

Days later a strategic partnership between TIGR and MINICK was announced. MINICK has already built one of the largest premium messaging networks in Europe, and operates its own SMS & MMS centers that connect directly to mobile networks. This partnership sets the stage for Gametrac units serving as a platform that allows TIGR's Smart Advertising (Smart Adds) service.

Then in late February it was announced that Gametrac will be using Samsung's world-class S3C2440 Mobile Applications Processor. Sparky thinks Samsung, known for its distinguished multimedia and gaming experience, was an excellent addition to the TIGR tem and will help assure that Gametrac's performance remains the fastest on the market.

And speaking of quality, in early March TIGR announced its plans to use a cutting-edge audio IC, a single chip MIDI synthesizer, that's made by respected audio specialist Micronas, a move that will provide Gametrac units with notably superior audio quality.

On the all-important production front, TIGR announced in mid-December that Celestica, a huge and respected worldwide leader in delivering innovative electronics manufacturing services (EMS), will be providing Gametrac with manufacturing services.

Equally impressive, in late March TIGR signed an agreement with CATIC, a giant State-Run Chinese conglomerate, which involved sales, distribution, technical support, and numerous other joint ventures for all Chinese regions, which Sparky interprets as meaning that CATIC is also very likely to be the manufacturer of Gametrac units sold in the Chinese region, particularly if demand from fast-growing high-tech Asian markets is anywhere near as intense as Sparky expects it to be.

And last but certainly not least, in early April TIGR announced that it had selected Ogilvy Public Relations Worldwide as its Agency of Record.

Managed by some of the planet's most respected marketing executives, Ogilvy currently represents some of the most reputable companies in the consumer electronics industry, including but not limited to Cisco, Dell, HP, Microsoft, NCR, Oracle and Xilinx. Sparky thinks that Ogilvy PR is a wonderful addition to the TIGR team, one the Street has not even begun to comprehend the beneficial implications of, yet.

Now considering the impressive cast of characters listed above, Sparky thinks he has ample reason to believe that not a single one of these outstanding firms would have entered into agreements and joint ventures with TIGR if Gametrac was not in fact one hell of a device!


The Competition

At present, it appears Gametrac's primary competition will come from Sony's new PSP and Nintendo's new dual screen unit called DS. Another smaller but noteworthy industry member is Tapwave, with its pricey PDA-like Zodiac models, which have mobile gaming capabilities. And smaller still we have Nokia with its gaming cell called N-Gage, which Nokia is threatening to re-design and eventually re-introduce.

And while Sony and Nintendo remain as truly formidable competitors, Sparky enjoys pointing out that Gametrac seems to be right on track for a much earlier launch date than either one of them.

Sony, which first announced plans to produce the PSP in May of 2003, with a launch date of late 2004, reported in late February that the PSP launch will be delayed until after the first quarter of 2005. Because it appears Sony's PSP is likely to be Gametrac's biggest competitor, Sparky thinks this delay has market share ramifications that are far more significant than the Street has yet to realize.

As for Nintendo, initial DS plans weren't even announced until January of this year, the unit's specifics aren't being released until May, but supposedly a late 2004 launch is still planned. Frankly Sparky doesn't think Nintendo stands a chance of launching the DS this year and expects news of a delayed launch date any day now. This expected delay, Sparky thinks, will just further assure deeper market penetration for TIGR.


The Mobile Gaming Industry

Despite rapid ongoing growth in the mobile gaming industry, at this point it's impossible to reference any industry averages or trend rates because it's such a new industry.

That said, someone needs to finally break the ice and predict how many mobile gaming units this industry will sell during its first real full year of existence, and it may as well be Sparky.

Using a consensus of unit sale estimates for 2003, Sparky estimates that Sony sold about 70 million PlayStation 2s, that Microsoft sold about 13.7 million X-Box units, and that Nintendo sold about 13.9 million GameCube units; for a three-company 2003 total of about 100 million units.

Now because mobile gaming units will cost more to buy and because they also involve monthly service plans, Sparky understands that mobile gaming unit sales will be far less. So let's say that the first-year unit sales of mobile gaming units amount to a paltry 10% of 2003's gaming unit sales of 100 million units; that still amounts to about 10 million units!

Conclusion

If Sparky may build upon the foundation presented above, let's say Gametrac captures just 10% of this new mobile gaming market during year one and that it's estimated to be comprised of about 10 million units. In other words, let's assume first year Gametrac sales of 1 million units.

Then, even though TIGR has not yet publicly announced what Gametrac is likely to cost, for purposes of illustration let's assume a price of $ 200 per unit, a gross margin on sales of about 25% (or about $ 50 per unit), for a first year total of $ 50 million.

And let's not forget the post-sale revenues associated with Smart Adds, as well as the monthly income from related service plans. Also for illustrative purposes, for year one let's assume that amounts to a gross of about $ 5 per month, per unit, for a total of $ 60 million. Adding up those gross totals, Sparky computes first year gross income of about $ 110 million.

Now let's make another ultra-conservative assumption, and assume that every single one of TIGR authorized 500 million shares is issued and outstanding at the end of year one.

Dividing $ 110 million by 500 million shares, Sparky comes up with per share earnings of about 22 cents. Now if TIGR shares were to be assigned a reasonable multiple of say 20, which is the multiple at which the DJIA now trades, that would yield a TIGR share value of about $ 4.40.

Granted, the above gross numbers are just estimates, and vague ones at that; they reflect absolutely no input from Nintendo, Sony, or Tiger Telematics; and they don't reflect operating and administrative expenses. But that said, the above numbers are still very conservative and in Sparky's opinion, if the unit sales increase, operating and other variable expenses become increasingly less of a profitability issue.

To conclude, Sparky views TIGR shares as an excellent addition to any growth-oriented portfolio and recommends immediate and aggressive accumulation anywhere near current levels.

Sincerely,

Sparky

PS - To hear what Microsoft has to say about the mobile gaming market in general and Gametrac in particular, Sparky urges you to check out the link below. After clicking it, you will be taken to Gametrac's web site. Once there, click on the link at the lower left entitled;"Microsoft on Gametrac".


http://gametrac.com/flash.asp


Tiger Telematics (TIGR)