I just listened to the mips Q405 conference call. They were disappointed with the results and they said it was due to some large customers pushing out and decisions and sign on's. They have said they dont expect the next Q to have significant growth as there is some caution amongst their customers.
They said that there is additional spending going on in new product lines and they expect FY06 to be a very good year.
There was talk of arrears earning of royalties and that existing customers are doing very well with their product lines and therefore they see Q2 (dec Q) and Q1 (jan 06 Q) to be strong.
they also said they are going to beat the semiconductor industry and match or beat competitors expectations and also that they believe the 24K family is ahead of its peers.
Ok i asked a question in regards to the difference between licensing and royalties earnings and how it all works. From my understanding now i think licensing are fees they collect when they sell their tools and designs and services to customers who are designing their products.
They collect royalties from the sales of the products their customers design. This is normally from my understanding a % of revenue from the product.
Ok also learnt that there can be a 1 year lead time to royalty pay off from when new products are designed, which is obvious with time to develop through to market roll out to peak production and market acceptance.
They said they expect alot of things happening in the portable consumer electronics space in the near future. Obviously the PSP is going to be key to this.
Mips still a long term hold and i am putting fair value at 9 dollars per share at end of Q4, but expect Dec Q results to be strong. Watch the consumer space to gage this better at that time.