-a change in deployment plans for HD-DTA (high-definition digital-terminal-adapters)
STBs by one of Entropic's end-customer U.S. Pay-TV service providers"
Could they be any more vague? Once the contract is lost, is it really a competitive liability to release the name of the customer or they simply trying to keep their own investors in the dark? For me, I can live with the revised guidance, but the secrecy does not bode well for investors.
I believe these are the STB's expected to be deployed in India. Sadly, this was a VERY large order. Now it appears as though the company will be saddled with excess inventory that will soon qualify as "legacy".
u_needa, U R .WRONG! U_needa listen to the Roth Capital Q&A following conference call over again!!.
The cause of the lowered guidance was identified as having been the result of a large US customer who was delaying their "ramp" on low end "DTA" digital converter boxes. These low end boxes would facilitate customers who remain behind in the analogue world having failed to take the bait and resubscribe at higher rates covering the cost of the new whole home HD digital encoder / decoder boxes.
Now this is just MY take away on the downgrade, the call and the situation, but I suspect that it is a result of managements failure to effectively price these boxes which almost CERTAINLY will have to be GIVEN away to the analogue customers once they fail to be enticed into "UPGRADING" their services (read, pay more, get more). Currently, most US households are strapped for cash and seeking to LOWER their cable bills, not raise them. Therefore these simple boxes that will be GIVEN away for FREE as a part of ordinary service will be a last resort. I disagree with the interpretation that it's not a demand issue. It is, its a demand issue on the higher end boxes. I believe that the customer in question is Comcast and that they want to give the end users time to see the vast benefits of having upgraded service as they experience vicariously through their friends. Ultimately, if they don't choose to upgrade, Comcast will be compelled to foot the bill themselves and simply shell out for the low end DIGITAL boxes as they consume around 1/6th to 1/7th the bandwidth as the outdated analog "legacy" boxes do. In the end, the market for this type of box will be huge, but within a few quarters, and certainly within a year these boxes will be completely "commoditized" as Broadcom and others flood the market with cheap legacy converters. This means THIN margins and lower profits. It would have been more advantageous for ENTR to have seen cable providers make the investment sooner not lat
Yeah, saw that. It's what I was afraid of - our most important customer. Being long this stock is like being a victim of the Spanish Inquisition; first they ostracize you, then they torture you into a confession for not believing their views on the world, and then finally, once you've confessed, they burn you at the stake - all in the name of their "god of love".