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I found it interesting the way Brian starts the blog about pay as you go SmartNIC. He says "it’s safe to say that most providers are satisfied with the capacity of their UPF (User Plane Functionality) software"
I guess that means that providers have finalised at least the parameters of their solution even if not exactly how they will achieve it.
Most will be either deep in testing or evaluating the test performance.
Next will be selection and integrator contracting. We will then see what initial sales come as OEMs and integrators pick up sales on initial deployment. We are talking here about RAN to 5G core access. That is connecting the mobile network to the 5G network.
The next stage will be connecting the mobile network together then mobile network to the client. Then we'll see client to client on private and mini networks. This will be maybe a building where functions join requiring no data centre compute. In this scenario just the outcome goes to the data centre.
I guess you can tell I am super excited about this as the last two years have been building to this.
We'll see sales in the coming months but I don't know how Ethernity will report it. They will start for sure in 5's and 10's from integrators and 10's and 50's from OEMs. 2021 will be a ramp up especially H2 2021 where I suspect we'll see £5m in additional sales. 2022 I believe that we'll see £100m in additional sales over the year biased to H2. H1 2022 I guess at £20-25m
A bit more patience required for sure but we are in the beginning of the end game now for this aspect of business.
We'll see other areas of business grow for Ethernity as 5G spreads and becomes embedded in our lives.
It's all down to how much of the market is available to Ethernity. Certainly they are dominant in the Telco sector and most of the competitors are looking at the data centre.
Telco is where growth will be. Once data centres are scaled it ends, Telco will run and run.
Yep. And AIM gives one the opportunity to add at 16p.
Pennies for pound coins, if you believe.
Interesting summary about SmartNICs. Ethernity have addressed these issues already. The new double 200g NIC combination draws just 50W. The Ethernity products are extremely well priced and fully engineered with of the peg solutions or customisable with low barriers.
Ethernity networks are mentioned alongside big names worth huge sums.
$600m was a ballpark figure from last year, since the expectation for China is double at $1.2bn.
This is largely because of the new potential within the core.
I know that Ethernity will take a chunk of this market. What will it do to a market cap of £7m.
Just spam I think. Hit 50+ pages with the same post.
The patent is very general and it covers the concept. We need to look at a select pool of open providers that are included in two groups of providers. One is a group covering China and near China Asia C-ran and O-ran which covers really most other places. America are cooperating with China in this simply because if they don't they will be Betamax. It is the only thing that America and China are working together on.
This select group has a agreement to respect intellectual property rights. There are many SmartNICs there are none that match ACEnic-100 and certainly none that match 200G UPF.
What we will see are many different ways to implement ACEnic-100 in many forms.
We can forget a Chinese knock off copying ACEnic-100. The network just doesn't allow anything to connect unless it tests out and is from an approved source.
Almost anybody with talent can buy ACEnic-100 from Techtronics and innovate solutions. These solutions can be put forward for testing. They can then be introduced to potential users. The idea is that a large amount of talent will pick up the same challenges and the best solution will float.
Ethernity have developed plug and play solutions. Integrators may add to that, OEMs may market it straight with their own products.
There are many things that can happen and they will but ACEnic-100 will be at the centre of those who want to deliver the best product at the best price.
TL is there a chance other companies will eventually be able to replicate what enet are doing albeit slightly differently to avoid patent issues?
In other news its the year 5781!! I’m so out of the loop
Interesting to see Ericsson spending big to secure much of what Ethernity are about. The point is for them to offer tier two and client to client. Tells me that whilst they still push for ASICs Ericsson boxes and lock-in they accept that open network is how it will go for most of the world.
They are not just interested in offering but want to remove providers like Ethernity that make it possible for integrators, vendors and OEMs to deliver. Boy will they get pi55ed when ACEnic-100 appears in the core.
With 4G there was no choice with 5G if performance can be hit or exceeded and price is similar the flex and future proofing will sell open. 5G will evolve.
These sales will not be from Ethernity but from multiple sources contracted to Ethernity. Beyond 2021 some of the solutions other than UPF will be substantial earners for the company.
I would like to think that by this time next year the business will be cash positive from revenue, that's the view that David Levi holds. Certainly H2 2021 should be a $5m revenue target.
The sales will increase tenfold year for at least 5 years by volume from China. The rest of the world will be a smaller market in total than China alone for 2-3 years.
So 2022 $100m is really quite achievable at high margins. That will trigger a modest dividend. Growth projects after get to crazy numbers.
Yes it's misleading. It is upfront of delivery for sure but the term suggests that it is engagement money. In reality it is a fee to allow the property to be licensed to the client for use.
I believe that the recurring income is about half a million a year from royalties on legacy work. So our baseline income $2.5m. This has to carry until revenue flows in from China through multiple avenues. The most significant currently is Techtronics because that will involve rapidly cleared payments to Ethernity.
I suspect that it won't take much to move the share price but to move it in a sustainable trajectory it will need to involve quite chunky revenue.
The cash situation weighs on the share price but the end game is very close. I know that many can't yet see what is coming from China but ACEnic-100 will be huge for Ethernity.
Missed the term " each of which will be earned in staggered stages over 12 months"
THE initial RNS mentioned an upfront fee of $495k.
That is better news.
Dallo as discussed.
"As set out in its update on 6 May 2020, the Company anticipates design kit and licensing from existing customer relationships will provide approximately $2m in revenues over the next 12 months over and above the regular recurring trading. This includes the tier-1 OEM contract announced in April 2020, with $495k licensing fees and $240k for continued product development, each of which will be earned in staggered stages over 12 months (and of which $52,000 has been invoiced to date with the majority of the balance due toward the end of 2020), and a Military / Aerospace tier-1 vendor contract on which negotiations are continuing"
So a couple of million US expected within 12 months above the recurring income from old business.
It appears that must the case with the upfront payment which is a positive
for cash flow in the 2nd half.
Upfront doesn't literally mean a chunk of cash upon signing. We did cover this somewhere. It's milestones up to delivery about 3 installments.
I think that it was all to be paid in 2020.
Clearly much depends on how much news comes from the China deployment in Q4. If they announce contracts etc, with some level of figures/guidance share price will fly. If that fails, then as Dallo says loan, placing etc but hat won't be pretty for the SP - I hope Levi has a plan if deployment slows or is delayed.
The April contract with an American Tier1 company involved an upfront fee of $495,000 and annual payments of $240,000.
Why did we not see the upfront payment in the 1st Half years accounts...if it is paid in the 2nd half that would be good news...clarification required.
The August St. Petersburg deal involved staged payment of $190000 in 2020 and 2021 and future royalties on successful implementation .
Tracy we are on the same side here and we have a lot to gain/lose
As Ronnie Reagan once said "Trust but verify".
I am still cautiously optimistic of success despite Mr Market ignoring the company.
I have absolutely no doubt that David expected the share price to refloat after the placing. I did as well. I think that the dire state of the UK market and the UK psychology makes it difficult for a share to move without news. The money coming with news is short term gambling money.
Ethernity needs to reach a different type of investor. I can only see that in a sustained way upon profit.
David says that revenue will flow from China through integrators and OEMs. I think to see real movement certainly above £1 the market will need to see that revenue flow in quantity.
I didn't expect that, I didn't expect to be a buyer at 12p or 16p. I can only look at the industry from where I sit in the sun. My view is very different than many who sit in the cold and wet.
So we are just ignoring the $2m expected in the next 12 months from contracts in place 3 months ago.
Revenues for 1st 6 months were c$340000.
I have added an extra bit to revenues for 2nd half out of optimism not fantasy .
Tracy, my worry in the current situation has always been that it may suit the board to buy the IP at a knock down price in insolvency.
Where did $500000 come from. Are your accounts built on fantasy?.
Cash at 30 June was $550,000 add placing proceeds of $1.1m equals $ 1.65m.
Add cash revenues of say $500,000 for 6 months to 31st December 2020
gives us GROSS CASH OF C$ 2.15M LESS 80% OF 1st HALFS CASH USAGE ( $2.7M X80%) $2.16M
Precisely enough cash to get to year end.
That Sir is accounting not nonsense.
"The Company continues to focus in the short term on entering into licensing deals as was completed with the St. Petersburg based customer. The upfront cash benefits generated by the licensing deals contributes to the Company`s financial resources to meet the anticipated 5G deployment that is anticipated to commence in 2021"
Of course we would rather that they didn't have to focus on these old business markets when there is a huge opportunity so close but it is where the company is right now. It is not 16p for nothing. If they were well funded and the mass deployment had happened as first thought 18 months ago we wouldn't be buying at 16p.
This company has come too far not to succeed. Clearly we directors have cash to support the warrants and I don't see them letting their lifes work fail so close to the safety line.
Yes we may get squeezed as a worse case but nothing more.