The fact that a Giant like Comcast would even work with Smith on a trial is telling. Multiple quarter of revenue from Comcast is also a sign that they are pass the "trial" period and at early deployment stage, which they have confirmed. The lumpiness of the revenue from quarter to quarter was to be expected and they warned us about that in advance.
The deployment so far is obviously only to support Comcast's initial test area.
Like I said before, you are free to draw your own conclusion on the potential revenue from the Comcast deal and make your investment choice according.
They have also signed an additional cable company since Comcast. While that company has not been named, we were told it's smaller than Comcast, but close to its size.
Another very good close considering...
1. Netlist was up the previous 5 days in a row. Down today on lower than avg volume. Price was up 10 or last 12 days.
2. Still up 10.8% this week.
3. 9th day above $1.
4. It was at today's intraday low for only a brief moment or so. It was hovering around today's close most of
$1.23 most of the day. Very strong support above $1.20.
5. There were no close of day selloff.
6. The overall market was down this week by a lot.
7. Inphi down almost 15%.
Inphi is shipping only their DDR4 "registers"; they canNOT and have NOT shipped any of their DDR4 "buffers" for the DDR4 LRDIMM because cannot do that without a licensing deal with Netlist. Because of that, Inphi currently has ZERO market share in the DDR4 "buffers" for LRDIMM.
Quote from Inphi's earnings call today:
Inphi CEO: [30:45] "As far as attach rate for LRDIMM, we do not participate in that market on DDR4..."
The reason Inphi is only on the hook for DDR3 LRDIMM and not DDR4 LRDIMM is because Inphi have not been able to ship any of their DDR4 buffers yet! Netlist will get licensing fees for DDR4 LRDIMM from others even if Inphi never ship their DDR4 buffers.
I cannot emphasize enough the significance of the fact that for the first time, the Inphi CFO would even state the following in their prepared statements on the earnings call today:
"...we continue to maintain that our technology does not infringe and that even if it did, we believe the exposure at the circuit level is small compared to the system level exposure..."
Samsung is an Inphi customer (but not a 10% customer) and we know they are friendly, which is why some here suspect they would encourage a settlement between them. It has nothing to do with hedging. Inphi has no NVDIMM tech to offer. Samsung is partnering with Netlist on NVDIMM, period.
That statement confirms what we already suspected, that LRDIMM IP licensing will not just come from buffer makers, but also the LRDIMM module makers as well, which is very important given the price of the buffers vs. the price of the price of the LRDIMM module itself. It's a percentage of a much bigger pie.
Quote from 2/4/16 Inphi earnings call:
[18:50] "...we continue to maintain that our technology does not infringe and that even if it did, we believe the exposure at the circuit level is small compared to the system level exposure..."
Just listened to the call again. Pay special attention at around 18 minutes into the call (18:40) when the CFO talks about the 200K in legal expenses...
During Inphi's earnings call today, they are now guiding expectation for DDR4 LRDIMM buffer revenue in 2017. That's right, 2017!!! Does anyone still have any doubts that they cannot ship their DDR4 buffers without a licensing deal with Netlist?
For the first time, Inphi actually mentioned the Netlist lawsuit in their prepared statements during the call. Of course they still claim they are not infringing on Netlist patents, BUT, they did say, 'even if they were' infringing, it only impacts their DDR3 buffer business which is in decline because of the transition to DDR4. They have no exposure to DDR4 since they can't / haven't shipped any.
As for their DDR3 LRDIMM buffer that is infringing on Netlist's patents, they claim that business is about $20 million now due to the switch to DDR4, but you will of course have to add up the last few years revenue, especially when they were the only supplier, and before the higher density DIMM was available.
The other thing to remember is that fact that not only are they accused of 'contributorily infringing' on Netlist's patents, but they were 'actively inducing the infringement' of Netlist's patents. DDR3 LRDIMM would not be in the market if Inphi did not supply the DDR3 LRDIMM buffer. Inphi of course want to believe that at worst their exposure is the revenue from the buffer sales, but of course Netlist would disagree. Inphi on the call suggest that the infringement is more so at the system (module?) level as oppose to the buffer. That would imply that they think Netlist should be collecting greater licensing fees from the LRDIMM module makers instead of from them? I'll have to see the call transcript or listen to the call again to confirm.
Bottom line, as expected, Inphi cannot ship DDR4 buffers with a deal with Netlist, and they are losing $20-$40mm a year in DDR4 buffer revenue to Montage and IDT. Netlist will be collecting royalty from them instead of Inphi, so either way Netlist will get paid.
1. Closed above yesterday's intraday high
2. Highest intraday high in recent months; 3 days in a row
3. Highest intraday low in recent months; 3 days in a row where the low is above or at previous days high
It's the perfect chart. No unreliable/unpredictable crazy volume or spikes. Just a nice, steady, controlled accumulation on slightly above average volume. Love it!
So the couple of million revenue Smith received from Comcast so far are just for Netwise trials? WOW!!! If they can get that much with trials, imagine the revenue at full deployment.
1. Closed at intraday high
2. Highest intraday high in recent months
3. Highest intraday low in recent months
Can't wait to hear what Inphi has to say on their earnings call tomorrow!
"Comcast (CMCSA) plans to file as a bidder in next month’s auction of wireless spectrum, the cable TV firm confirmed on its earnings conference call Wednesday, in a move that could reshape the telecom industry.
One big question is whether Comcast aims to be a national player in wireless or provide mobile video services within its service area. Comcast has been building out a public Wi-Fi network using unlicensed spectrum within its local markets.
If Comcast aims to go national, it could team up with another cable firm, Charter Communications (CHTR); or it could acquire feisty T-Mobile US (TMUS) or debt-laden Sprint (S); or it could partner with industry powerhouse Verizon Communications (VZ), perhaps the most attractive option from a balance-sheet view."
Totally agree on how quickly the EPS can grow given the low number of shares. With their huge backlog that is still growing, their revenue should also continue growing at a very healthy rate. Even after the run up, this is still trading no where near what it should be. It might seem like a typical pumper talking when I say that I believe this can easily get to $10 to $15, or even more this year, but if you actually look into the details of what we already know about the current state of the company (their backlog, their booking rate, how they recognize the revenue across multiple years, their expenses, and their management), you'll see that my price targets are quite realistic.