Sonic, Well were looking at several issues here, direct and indirect. But for the scope of this post lets go with the overall theme of potential cash inflow.
Now I have to be honest here and say I must be missing something in the numbers given. If I may.
You went with 0.35%. I would think that figure is too low for 2G over all but 3g as stated will be lower than 2G. For this example only than .35% is used as a place to start.
You mentioned what I take to be avg selling price of 100 dollars. But I got lost with 35 dollars a phone. “I'll estimate we receive 35 dollars for every phone sold($100 ASP” Did you mean 35 cents a phone? That’s the way I’m going to read it anyway. You mentioned a billion phones sold. Seems high but lets go with it.
350million a year . Ok , ok. There will be various expenses starting with taxes but in this post lets say we can keep half to earnings. That IMO is beyond world class cost savings for a small company that has a development program. 50 percent to the bottom line. 175 million works out to a little over 3 dollars per share if they don’t increase the share load anymore. You went with p/e of 25. I think your going to find that to be a little high for the 2nd half of this decade but lets run it.
75 a share then. With a statement that there will surely be periods over that number.
There is a lot of problems with that statement. I would challenge that a billion 2g - 3g phones will be sold.
Don’t think were going to get any money for Mot 2G -cdma phones as 1 example.
Your aware of course to the paid up current and also paid up by the end of 2006 issues on 2G phones.
Would challenge that we will get all others signed up by that time. It would require a new license roughly every mo between now and the end of next year. Unlikely considering our position. And even if we did by the end of next year we would still be faced with the paid if full starting with 2007. Ie what percent does Nokia sell in 2g at that time? I don’t know. Nokia is the leader and it will be several years before 3G over takes 2G on units sold.
There is a lot of subtracting that would need to be done to get correct figures in place. But the point would be moot. This potential you mentioned has always been there. This is nothing new. The issue has been can we get them licensed. “” AND PAYING””. Nokia IS licensed and we are having a hell of a time. They are already coming out with a lawsuit for 3G from 2007 on , fighting us before were even there. To keep this at the micro, lets say Ericy does sign a 3G with us, do you believe that Nokia will quickly pay the 3G while still fighting us on the 2G? That would be a whole new arb I would guess. But those two are ones WE Have licenses with. Were not even trying to go after the ones we don’t. At least not the big hitters. I would have a hard time believing that a day in the very near future these companies will be rushing in demanding to start paying us. That would be great and I’m all for it but I will not assume it.
Now there are other things in play, but the focus is where it needs to be in this post. Failing in the 2g- 3g issues would be enough to send me packing. Well once I clearly see the writing I would be gone. To be clear here Antenna’s R Us just doesn’t do it for me.
So I guess 75 may be full potential from the 2g 3g world. 1 billion phones, I don’t know, again seems high, how many will this company be involved in? in the best of positions I would think a whole bunch less than 1 billion. 50 Percent to the bottom line, well guess your best here but I would be ecstatic with 1/3 to the bottom line. 25 p/e for a nonleader in the field is questionable for the overall avg. { MO} Now Sonic, it’s up to you to come up with how all are going to get licensed. I my self have no idea. Btw if you happen to have this one, please, please pass it along to Bill.
