RE: Level 228 Aug 2021 08:48
It's important to understand that the deal in India and the recent UEP deal with an international radio vendor just include the delivery amounts of the product. 900 and 1000 units. These are nothing more than sample networks quantities. Both anticipate substantial orders in the tens of thousands a year.
These are Ethernity solutions end to end but built and sold by substantial vendors in their field. Ethernity developed the product and the vendor takes it on as theirs paying Ethernity $900+ for each unit sold. In the case of the IDU they are $3-4000 each. The market is huge when you think that less than 10% of buildings in the developed world has a indoor mmwave capacity currently and that doesn't mean radios just capacity. We are talking shopping malls, schools, hospitals, cinemas, theatres, museums, Offices and factories. mmwave has very poor penetration and requires lots of units.
Current sales are 10000 units a year. This new solution is a real game changer for the radio vendor and gives them a market leader product when combined with their radio unit in a totally new market.
The key to the deal in India is not the Indian market which is huge but getting the product global. The programmable router and security platform will be a market leader in India and Ethernity are completing the software stack for the virtual router in a funded development program. This product is initially aimed at Indian telco networks and will become the standard cell router I suspect.
The deal was for 900 units plus development at $1.5m.
So far Ethernity delivered their UEP-20 and the Indian OEM built their device. Now Ethernity has that in their lab testing and building the UEP 360 functionality. Using this end to end Ethernity product with layer 2 and 3 solutions the OEM is the most advanced product in the Indian Teleco market.
The initial 900 units was for orders in place which no doubt are a small part of the requirement for these clients. At circ$1000 a unit we can expect $10m a year absolute minimum. That's starting really as soon as the product is complete.
These end to end solution has a to market window of around 3 months reducing the previous 18-24 months cycle from work to reward.
Ethernity don't need any more contracts to create massive wealth as these products find their place in the market. It's OEMs and vendors who now need to sell sell sell.
This really is what they do and now they have market leading products.
Ethernity will inevitably sign many more contracts for others to build and sell branded products but firstly the market needs to understand how this works and what will happen next.
There's also the question of ongoing license payments for the code, there will no doubt be fixes and additional functionality requirements but largely these annual payments are money for using Ethernity ideas and magic to make it work.
Ethernity don't make hardware, not quite true but they do make their money on what they drop on the hardware.
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