I would not give much significance to the stock action immediately following the announcement. There are several things that could be going on and maybe all of them contributed. There may actually be holders that found the announcement discouraging, having expected a much bigger contract to be announced first. Shorts may be working hard at keeping the stock in a place where they don't get cash calls. Somebody may have been front-running the announcement yesterday and decided to take the very nice one day profit and step out (though the SEC may invite them to step back in).
In any case, the importance of the announcement is (1) a large, technically proficient firm has decided that the technology does something sufficiently important to justify straying from the usual well-known suppliers (2) PRKR has shown that it can overcome the resistance to new technology that comes from an unknown, small company with no revenues. It is the second difficulty that I have never been fully confident they could overcome. Now they have.
It has been difficult for technical people in target companies to push for a contract with PRKR. The company is small. It hadn't sold the technology to anyone. And many of these companies have heard from outsiders claiming that the whole thing is a scam. If you recommend PRKR in that context, you know your job is a hostage to the accuracy of your evaluation. The personal hazard in recommending PRKR technology just decreased by an order of magnitude or so.
It seems plausible to me that larger players will reach much the same conclusions overnight and that the action in the morning will be interesting to watch. Of course, there are those who stand to lose a lot of money and the action will vary depending on whether they decide to run for cover or to slug it out by shorting (particularly naked shorting). PRKR looks to be a very satisfying spectator sport over the next couple of days.
teamrep is one Robert Syputa who works for Maravedis, a telecom market research and analysis company:
and has an on-line newsletter called wimaxpro.com:
He writes professionally, though clearly with some editing, and is only one person. Why he bothers to post here at all is beyond me. One can only imagine.
hansgrettelblix, you asked:
�If the technology can pass Mil Spec qualifications, one would opine it should be good enough for civilian (cell phone) applications?�
That depends on many more factors. Many, if not most, military applications will never result in civilian products.
A well known exception is GPS receivers, which utilize a military developed satellite infrastructure. DoD (Department of Defense) contractors build what is needed for the military GPS receivers while a separate set of companies build commercial products to a commercial standard.
The DoD guys have a different agenda and are much less sensitive to cost. Consider the cost of any military aircraft and you see that if the radios cost a million dollars, it has little impact on the overall system cost.
The parts in such a product are way too expensive for commercial application, regardless of whether or not they might be useful. If the D2P takes an expensive semiconductor process to build it, ITT might still use it and inadvertently prove it is too expensive for cell phones.
But, there is also a very competitive pressure in the DodD market to perform.
It is common for the DoD to pay two or more companies to develop the same thing. Company A and Company B both get a SDD contract to design and prototype the magic widget. Design reviews are held to determine which design is best.
Lets say DoD picks Company A as the best design. Now the DOD asks both (A & B and maybe others) to bid the cost of manufacturing it. It is possible that Company B will underbid company A and build the company A design. Maybe even Company C will get the manufacturing job. Maybe they need a bunch of units in a hurry and pay multiple companies to make them.
DoD can do this because they paid for and own the designs. If there are patents involved, DoD will require a governments purpose license, which lets any builder make the government design.
Now, there is plenty of speculation around here about the meaning of the ITT commitment. I think it's pretty low at this point, but PV does have an opportunity to perform. If they blow the performance of every other manufacturer out of the tub, this could be worth plenty. But, many other companies have worked you many years on efficient designs with good results.
Consider the needs for efficient electronics in aircraft and spacecraft. There is plenty of history out there. PV technology us up against whatever ITT has internally AND that of all the other DoD contractors.
Sorry to inform that little development contracts for a small business are not a big deal.
Further, the PV announcement was missing the reciprocal quotation from ITT. Usually these announcements have a quote from the small company guy (Jeff�s quote) and another from the large company. Where is the ITT executive saying �We look forward the long term strategic relationship that will turn PV into a major supplier�yadda yadda yadda.�? Has even a single name at I.T.T. been offered up?
The absence of that is a big deal to me.
Compare to T.I. announcement? From that: �Bill Krenik, advanced architecture director at TI's wireless business unit, said ParkerVision's technology was particularly attractive since it was "attempting to employ down-conversion techniques without the traditional challenges of direct conversion, such as dc offsets and local-oscillator radiation."�� T.I. also invested $25 million and still ended up not using it.
Compared to that, the ITT announcement is extremely watered down. A chance to perform for a company that has a history of not performing. A small step for a man, but not a giant leap for mankind.
Good point! I can assure you that the D2D technology did not exist in tangible form in 1998 - not even, I believe, as discrete components - certainly not in IC. My guess is that Questars had lost interest by the time it was available. And that, more or less, makes your point that the announcement in 1998 was an overstatement of the potential in the deal. Since then they have become more careful about this, largely I think because of advice from securities counsel.
Thanks Urspond - may be that may be so for TI, but I am not so sure about whether ALL of the others can be dismissed so(see previous statements copied below after similar tie ups) - for example Questars deal definately seemed developement focussed.
Dec. 2, 1998
Questar InfoComm, Inc. has invested $5 million in ParkerVision, Inc., to fund development of new communication systems for the energy industry and other projects using patented wireless radio technology.
Questar InfoComm, a subsidiary of Questar Corp. (NYSE:STR), will receive shares of ParkerVision, whose common stock is traded over the counter as "PRKR." ParkerVision, headquartered in Jacksonville, Fla., designs and develops wireless technology and audiovisual productions.
ParkerVision has developed and applied for patents on what it calls a Universal Direct Conversion Receiver (Direct2Data or D2D) radio technology. According to ParkerVision, the D2D technology promises to significantly reduce the cost and power consumption of wireless-communication systems. ParkerVision believes the technology has the potential to replace current radio-receiver sections in a wide variety of applications, including cellular telephones, utility meter reading, home-security systems, pagers and others.
Independent consultants hired by Questar confirmed that the performance of D2D makes it capable of being applied to a wide range of wireless devices from low-speed data and voice applications to high-speed data applications, Questar said.
Questar InfoComm provides information-technology support for affiliates of Questar Corp. that engage in energy development, transportation and distribution. Radio links are used extensively, for example, to monitor pipeline pressures and volumes and to open and close flow-control valves. "Technologies such as D2D that could potentially improve the efficiency and performance of these communication sytems would be of interest to Questar and other energy companies," said Clyde M. Heiner, president and chief executive officer of Questar InfoComm.
"Questar InfoComm is pleased to join ParkerVision in this early effort to commercialize that company's exciting radio technology, especially in products of particular interest to Questar," he said. "D2D holds great promise as an entirely new architecture for the wireless-communications products industry."
Heiner said Questar InfoComm also is exploring joint ventures with ParkerVision to use D2D technology in other communication applications such as home-security systems and wireless-computer networks. Questar may provide some funding for the joint product-development effort.
The company issues a limited statement and the result is that stock hypsters conclude the meaning of the agreement substantiates the technology. Where has the company given any details$ How much revenue does this result in or for what products? Sometimes IPR licenses are just a step to enable taking a closer look at the technology and a chance to see IF it can be used. Obviously there must be enough interest to get as far as an agreement, but until the company gives details, it could just be exploratory and may result in little revenue. It may mean little about how much use will be made of it.
The prospects for getting Parker's technology designed into a large percentage of 3G handsets is exciting. But this is also meaningless. Companies are competitively looking for new technology and new market opportunities that allow them to stay one step ahead of competition. Just being in discussions can be meaningless. The devil is always in the details: who with (oh we are talking with Sam, he works as a janitor part time at Nokia), and what royalty or sales revenue is being discussed? That the company says they are talks means little: Parker has been in talks with someone for several years. He must like to talk so much that he forgets to sell anything.
<<Sometimes IPR licenses are just a step to enable taking a closer look at the technology and a chance to see IF it can be used. Obviously there must be enough interest to get as far as an agreement, but until the company gives details, it could just be exploratory and may result in little revenue.>>
I actually agree with you, but it cuts both ways. I suspect that if things work out well, and I, unlike you, am confident that they will, ITT may become a much larger customer than indicated by the current deal, which, as you say, is probably exploratory in nature.
"The prospects for getting Parker's technology designed into a large percentage of 3G handsets is exciting. But this is also meaningless."
Do you have a special definition of the word "meaningless" that you would like to share with us? What exactly would be meaningfull in your opinion? No don't answer, I don't have the energy to read anyone as dower as you seem to be no matter what good things happen.
It is easy for outsiders to think of large organizations as monolithic entities that think and move as one. Nothing is farther from the truth. It was easy for PRKR investors to think that every relevant person at TI had a perfect understanding and appreciation of what ParkerVision was doing.
The same is true for the cell phone OEMs. Perhaps, after this deal, awareness can permeate deeper into the organizations.
I should, perhaps, elaborate regarding TI. The dealings with TI were with the people who operate their fab. That is a different division from the TI operations that create and sell chips. PRKR tried but never succeeded in getting a hearing from the RF people at TI. So, while I concede that TI would be an excellent indicator in terms of an evaluation of the technology, no such evaluation was done by the RF folks. The fab people liked the product and they decided to make an investment. The RF people wouldn't look at it. NIH!