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Ann: Licensing Agreement Signed with Telink Semiconductor-XPE.AX, page-170

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vintage

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04/07/16

20:27

Post #: 18191184
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Originally posted by elphamale ↑

Hi @RobbieinAus , @vintage and @will007 et al,

Great topic for discussion and at first I would agree with the general logic of dividing Telink's 2016 estimated revenue of $45m by 100m units forecasted total production to determine the average sale price of each chip.

However I am struggling to reconcile how Telink could possibly produce a 'world first/state of the art' all-in-one SoC for under $0.45 USD, including ADRC licensing fee of 17.95% (not to mention the added cost of including BLE/Zigbee tech etc.) and still be able to turn a nice profit for themselves. It just doesn't make any economic sense to me, particularly when the cheapest comparison I could find online was for a far less equipped and dated IOT SoC alternative priced at @$3 USD (Shanghai based Espressif's ESP8266 -refer below links).

http://www.cnx-software.com/2014/11...oards-for-3-with-esp8266-wi-fi-serial-module/
http://hackaday.com/2014/08/26/new-chip-alert-the-esp8266-wifi-module-its-5/

I read in a recent IOT article that pricing for IOT SoC's has come down by 25% or thereabouts in the last couple of years. So if we reduce the $3USD Chinese made ESP 8266 by 25% and then assume a further 25% wholesale discount for bulk orders to OEMs, then that would still imply a wholesale price of @$1.70 USD (note that the ESP8266 is a 2014 IOT design that does not include all the latest bells and whistles including BLE & ADRC).

So my takeout from the above is that either Telink have found a way to reduce their costs by 90% (versus Shanghai based Espressif as the cheapest producer of an IOT SoC that I could find) or Telink's forecasted revenue for 2016 is an outdated projection based solely on their 2015 product line and 2015 volume growth (more likely IMHO).

It's also worth remembering that Telink only announced the world's first all-in-one SoC a few months ago (January 2016 - refer link below), so the new all-in-one design would naturally come at a higher price and therefore should deliver Telink additional revenue (vs what was originally forecasted) for 2016 and beyond. Effectively they are first to market with a world first product and therefore they have no real competitors as yet. So I don't see the need for Telink to sell at major discount to inferior competitor offerings.
http://www.cloudcomputingexpo.com/node/3639837

But if anyone else is able to find any IOT SoC on the market for $0.45 USD per unit, then please let us know for the sake of a better reference. Otherwise I can only presume that the pricing of Telink's latest 'all-in-one SoC' range of products would be well north of $1.50 USD wholesale, providing Xped with future licensing revenue that is still potentially far less than (albeit closer to) management's 'current' per unit licensing estimates as outlined in the April presentation.

Finally @will007, appreciate you contacting management and would love to hear any feedback on pricing that you hope to receive. I have also sent an email to Telink sales dept re: indicative pricing for one of their currently available all-in-one SoCs (for bulk ordering of course ;-), and will let you all know if they take the bait. Note: I could not find any pricing of Telink's current products online.

GLTA

Cheers
Elpha

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Elpha - the solution to your conundrum is that Telink is a fabless chip company. It provides the IP and has the units manufactured by an OEM or similar. So gets around 45c for the 'non-manufacturing' elements (IP, licensing, marketing, distribution etc), based on Robbie's model. My view is that Xped will get 17.95% of whatever the sale price of the manufactured unit is, rather than 17.95% of Telink's gross margin.

XPE Price at posting: 8.5¢ Sentiment: Buy Disclosure: Held
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Ann: Licensing Agreement Signed with Telink Semiconductor-XPE.AX, page-170

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Ann: Licensing Agreement Signed with Telink Semiconductor-XPE.AX, page-170

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