PRKR 2008 Q2 Conference Call
August 11, 2008
Jim Whitten with Laidlaw
Phil Anderson with Pinnacle Fund
John Peacock with MaxTak Partners
Joseph Graves, a private investor
Operator: Please standby, we're about to begin. Good day everyone, and welcome to the ParkerVision Second Quarter Conference Call. Today's call is being recorded. At this time for opening remarks and introductions, I'd like to turn the call over to Mr. Paul Henning. Please go ahead sir.
Henning: Thank you. Before we get started, I want to remind the
listeners that this conference call will have certain forward‑looking
statements which involve known and unknown risks and uncertainties for our
businesses and the economy and other factors that may cause actual results to
differ materially from our expected achievements and anticipated results.
Included in this respect are the visibility to maintain technology advantages in the marketplace, to achieve timely market introduction and acceptance of our products, maintain product company protection and the availability of capital among others.
Given these uncertainties and other factors about our business, listeners are cautioned not to place undue reliance on any forward‑looking statements contained within this conference call. Additional information concerning these and other risk factors can be found in our filings with the SEC.
We will begin today's call with Cindy Poehlman, CFO who will review the financial and then Jeff Parker who will report on the company's business activities. Cindy, would you like to go ahead please?
Poehlman: Sure. Thank you Paul and thank you to those of you joining
us on the quarterly update call this afternoon. As usual, I will spend just a
few minutes on the financials and then I will turn things over to Jeff Parker
for an update on our business activity.
We reported this afternoon a $0.22 per share net loss for the second quarter of 2008 compared to a $0.18 per share loss for the same period in 2007. Year‑to‑date, our net loss is up from last year by $0.04 per share to $0.41. The increase is a result of increased research and development expenses as well as an increase in non‑cash stock‑based compensation expense.
Our research and development expenses increased about $1.4 million from 2007 to 2008 as we increased resources, both outside design services and to a lesser degree internal personnel focused on the implementation of our technology and production‑ready ICs.
This work includes the implementation in silicon of the digital portion of our technology which controls our RF transmit IC, as well as the development work related to the implementation of our D2D technology into an RF receiver IC. These designs which we own will be utilized by our existing customers and we believe future customers as well.
In addition to the increases in our R&D resources, we also saw a company‑wide increase in stock‑based compensation expense of approximately $0.5 million on a year‑to‑date basis. This non‑cash increase is a result of the expense attributed to the 2007 and 2008 employee equity awards.
We ended the second quarter with 14.8 million in cash, which represents a four million use of cash for that quarter. Our cash balance and year‑to‑date cost of operations are tracking along right in line with our expectations thus far.
Many of you have begun asking whether the company will need to secure additional financing through equity or other means to fund our operations beyond 2008. Over the next few months, we will be evaluating our cash needs taking into consideration a number of factors, including our future cash inflow expectations with regard to both existing and prospective customers.
From that analysis, we'll determine any action necessary to ensure the company's balance sheet remains strong and continues to support our initial growth. You should expect an update from us on this topic at our next quarterly call.
I am happy to address any questions you have on the financial results at the end of today's call. But for now, I'm going to turn things over to Jeff Parker for an update on business developments.
Parker: Thank you Cindy and good afternoon and thank you for joining
us for our second quarter update. In our last call, I focused on three topics.
Your feedback indicated that those topics were helpful in tracking our
And so today, I am going to focus on updates to those three areas that we discussed in our last call; namely number one, the progress on our technology, both from an intellectual property standpoint as well as the development of the hardware itself; then I'll update you on the progress we're making in customer relationships, both with our existing customers as well as the pursuit of additional customers and lastly, I'll touch on our business model and what we see for the future and the creation of shareholder value. So let's start with the IP and technology development.
Since our last quarter update, we were granted an additional six US patents and our IP portfolio has now grown to include 70 US and 55 foreign patents and we've slightly over 100 patents pending. We continue to make advancements to our technology and thus we continue to file additional patents.
In our last call, we mentioned that we were ranked by the Patent Board's first quarter telecom scorecard at #10. We were ranked #17 in the second quarter scorecard and continue to be the smallest company on that scorecard. Our ranking was based on the merits of the 14 patents we were issued during the three‑month period for this Patent Board scorecard and compares with the next smallest patent holder, Sony Ericsson who was issued 60 patents and ranked 19 and then Verizon who was issued 111 patents and ranked 14.
As of the last scorecard, we continue to score exceptionally high in the area of science strength which is defined as the measure of a company's patent portfolio that is linked to its development of core science.
I continue to believe that the significance of our inclusion in these rankings speaks to the relevance of our IP and to the direction our industry is heading. Our commitment to developing and securing IP in this area will prove to have been a good investment, one that takes years of commitment to build and a result that we believe can't be duplicated easily or quickly.
Equally important to building a valuable IP portfolio is our ability to support a customer base by building the physical components that implement our IP and to prove the efficacy of our technology.
So now let's turn to an update on the progress of hardware development. On this topic, I am very pleased with our progress this past quarter. Some of the inertia that ParkerVision has had to overcome to gain enthusiasm for our technology has to do with the challenges that have plagued others in bringing new RF components to market.
These challenges created a cautious environment for decision makers considering new approaches to RF systems, especially as the industries that these components are used within has grown to such large volumes. Having overcome this inertia, will ultimately be seen as one our strengths, especially since our hardware doesn't suffer from the same shortcoming that have been problems for others.
On the topic of product development that we've been creating to support our customers, I am also very pleased to share with you that we've recently expanded our senior staff at ParkerVision. We welcome Domingo Figueredo as VP of Engineering. This role was previously held by Greg Rawlins whose name you may have seen on many of our patents as he serves double duty as our Chief Staff Scientist as well.
Domingo's arrival enables Greg to focus his energies on continued technology advancements and IP creation while Domingo carries forward on product implementations with the strong team that Greg built. Domingo's arrival is timely as the potential of our first two customers along with others that we believe will come soon warrants the expertise that he brings and will help us reach our goal of profitability with greater certainty.
In his nearly 30‑year career, he has been credited for guiding teams through the development and production of RF components that have been fielded in the tens of millions of units each month, including those that are widely deployed in mobile handsets today for some of the world's largest OEMs. His experience is a real asset in supporting our current and future licensees.
A comment that Domingo has made multiple times since joining our firm is that one of the factors he found attractive in coming to ParkerVision is that our innovations have all the makings of truly disruptive technology and of course all that comes with that, disruptive technology development being an area that Domingo has real career experience with.
So, continuing on the topic of our progress in hardware development, we are on track with what we shared in our last update to you for delivery of volume‑producible d2p chips in the fourth quarter to our first mobile phone chip set customer. These chips will not only verify that our technology is superior for handset solutions, but provides the multiple benefits that we've spoken about.
Improving efficiency for 3G voice and Internet connectivity and extending battery life would in and of itself be a great achievement. However, this is accomplished with d2p while using common silicon semiconductors in a competitive form factor which translates into better size and cost.
One last mention I want to make about our D2P chips is that they also represent what I would call a "Platform Technology." Meaning that beyond the 3G application they are designed for, these chips can generate a wide variety of RF waveforms without the designers having to start from scratch each and every time a new RF waveform is desired.
This kind of flexibility will also help win over the skeptics who have been disappointed so many times by other RF component development shortcomings.
So now let's move on to an update regarding customer progress, both with our existing as well as perspective customers.
Our engineering team as well as our sales organization, continues to be actively engaged with ITT. ITT continues to invest resources in D2P. As I mentioned in our last update, ITT has a D2P development system in their own lab that enables them to generate various RF waveforms for their own customer support.
They have identified the first programs to incorporate D2P, and they continue to work on those applications. One very nice synergy that I will mention is that there is an excellent alignment between the chips we will be delivering in the fourth quarter for handsets, and some of ITTS first applications.
We remain confident that ITT and ParkerVision can incorporate the benefits of D2P into government and military wireless communications.
With regard to our first commercial customer who is incorporating D2P into 3G mobile handset chipsets, our confidence continues to grow as we're moving ever closer to volume chips, and the potential for what our company's will soon be bringing to the handset market.
Our commercial customer is very pleased that there have been no slips to the schedule, no modifications to what we've agreed to do together, and our teams are actively working day‑to‑day.
The benefits of D2p combined with our customers existing Tier one and Tier two OHM handset customers, should prove to be a powerful combination for growing business for both companies.
As I already mentioned, our volume producible chips for their first 3G application is on track for fourth quarter delivery. One additional comment with regard to our first commercial customer is that we have also launched a development program that incorporates our D2D receiver technology in the 3G mobile handset chipset.
We expect the first volume producible D2D receiver chips to be delivered to our customer sometime in the second half of 2009. We are very excited that all of our RF transfer technology, both D2P and D2D, will be incorporated in the mobile handset chipset.
So now on to the topic of “New Customer Prospects”. As I mentioned in our last update, the progress we're making with our first two customers will undoubtedly have a significant, positive influence on securing additional customers.
With volume producible chips only a short time away, this certainly helps moderate the risk. My confidence in securing additional commercial customers remains high, and as I've said before we believe these next customer wins are "When, not if."
As I said on our last call our efforts remain largely focused on those companies who are shipping in volume typically measured in the millions, if not tens of millions of units per month. As I've also mentioned before, the attention to detail by those types of firms is quite thorough.
A couple of years ago, we were on the forefront of predicting that consumers would be dissatisfied with 3G talk time. At that time our predictions often encountered a "wait and see" response‑3G networks hadn't been widely deployed yet.
Today it has become widely accepted that 3G operation drains the battery much more quickly than 2G, and that consumers aren't satisfied with the reduced battery life.
A good example would be the recent reviews of the new 3G IPhone, which has earned seller reviews on most of every [inaudible] except one, the battery life when using 3G.
In general 3G phones have reduced battery life with poignant suggesting, "Turn off 3G. Only use it when absolutely necessary or even use WiFi instead of 3G whenever possible. Some reviewers have challenged handset OEMs to get 3G operation on par with 2G battery life, a feat that D2P can achieve right now.
Having the confidence a few years ago that the complexity of multimode, multi‑band handsets had the 3G and 4G battery life would be challenges that the industry would be looking to solve and would require advanced technology approaches, were the beliefs behind the reason we invested and developed in D2P.
Just as I was confident in our investment in D2P then, it is my personal goal and belief that we will secure our next OEM agreement before the next scheduled conference call.
So, now the last topic I want to discuss with you is with regards to our business model. In our last update we expressed our belief that we could gain adoption that would put us at a market share run rate by the end of next year that's in the high single digits, perhaps low double digits as measured against the 3G handset market.
That market next year is forecast to be in the 500 million unit range and growing the following two years by another 50%, to around 750 million units annually. Based on our continued progress, I continue to stand by that belief.
By the way, it's our belief that our existing commercial customer can account for a mid to high single digit high market share run rate for us by the end of next year with growth potential beyond that.
For a little longer term given the strength of our technology, I remain confident that ParkerVision can achieve share market penetration. They will incorporate our technology into a third or greater of the 3G, and emerging 4G handset market.
For that goal to be achieved within the next few years (two or three) with continued growth that will give us the opportunity of achieving our vision of becoming a defacto standard in that important space.
Given a reasonable range of royalty expectation, and assuming that ParkerVision has 30 million shares of stock outstanding, I believe this will translate into a revenue run rate that will yield annualized earnings of $2 to $3 a share in pretax for the company.
If we maintain our focus and continue to build upon our customer relationships, this is the foundation for the kind of value we can achieve.
I also continue to believe that there will be some helpful upsides to our results that will come from our customer relationship with ITT, and that can provide some extra momentum to our growth.
So an synopsis; when I think about the assets of ParkerVision and how we are positioned for growing shareholder value I consider that number one; we've maintained a multiyear course of developing new RF architectures which take years to innovate, protect, and mature into implementations that are appropriate for our target market, mobile handsets, a tapped in my opinion cannot be quickly or easily duplicated.
Number two; we've built a stable and growing team that has developed its technology, and it has built the expertise on the sales and marketing along the engineering front to bring volume producible silicon to market.
A team that has now grown to include a VP with the experience in having fields of RF components in the very highest volumes used by some of the world's largest OEMs; a team that is on track for delivering volume producible silicon in just a short time from now for 3G handsets.
Number three; we've secured excellent customer relationships with our first two accounts, one incorporating the benefits of D2P technology into challenging government and military products, and the other that is incorporating the benefits of both our D2P and D2D technologies in the 3G mobile phone. Both accounts already selling volumes of their products to cheer one firm's in their respective field.
Number four; the market trends in the mobile handset space are clearly moving in our favor. Chips at OEM want to provide complete solutions, from the start of the base stand all the way to extend to the antenna.
They want to use common silicon semiconductors; they're looking for ways to simplify the complex RF frontend while increasing 3G and 4G battery life.
Simultaneously achieving all those desires won't occur by just tweaking traditional RF architectural approaches. Our volume producible silicon will soon be available for any combination of 2, 2.5, 3, 3.5 and 4G handset applications.
Last but certainly not least, we've had the unwavering support of many of our investor partners who have entrusted to us their financial as well as moral support, and whose commitment we don't take for granted or take lightly.
Rest assured that while we believe we are very well positioned with what we've achieved up to this point, we are committed and driven to bring in additional accounts soon, who will incorporate our technology in a mobile phone‑anza.
So, I hope you've found this update today to be helpful. Our key to success is to stay on course, as you've just heard we have a great deal to be enthusiastic about. Now I'd like to open this call for your questions, so operator?
Thank you. The question and answer session will be conducted
electronically. If you'd like to ask a question please do so by pressing the
"*" key followed by the digit "1" on your touchtone
If you are using a speaker phone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, please press "*1" for questions, and we'll pause a moment to assemble our cue.
We'll take a question from Jim Whitten with Laidlaw.
Jim Whitten: Hi Jeff!
Jeff Parker: Hi Jim!
Jim Whitten: How you doing?
Jeff Parker: I'm doing very good, thank you. How about yourself?
Whitten: Great. The first question, as a novice, as a novice in the
technology here. As I read about these new phones coming out, etc. they're
talking that in 3G and 4G with a potential demand for so many things from not
only cell phones, but the other ancillary things, that to put it all out would
be a total strain or at this time probably almost impossible to put out what
people would want. How do we address that particular situation?
Two. In your projections on D2P, do you have any projections on how much we would bring in from D2D if it's incorporated?
My last question is when you refer to volume producible very shortly or on the way, what time frame are you referring to?
Parker: OK sure, so starting at the top. So 3G handsets, which is
certainly shipping in volume today using traditional linear transmitters and
linear power amplifiers, are already providing significantly shortened battery
life for telephone calls, voice calls, and for data Internet connectivity. So
if you read a lot of these reviews on these handsets today, and I think I mentioned
some of them like on the IPhone, certainly the reviewers like a lot of the
benefits of the 3G, but they are complaining about the need to improve the talk
time or the battery life for Internet connectivity on these 3G networks.
We help that a lot by making a 3G phone call, talk time or Internet connection to look more like 2G time. Even some of the reviewers have said, "Gosh! Just get up to 2G, and we'd be happy." So that was good news for us, because from our calculations that's pretty much what we can do with our existing implementations, and of course we'll continue to push forward from there.
4G is even more challenging then 3G, because the complex of being the weight form is even greater and makes the battery life even shorter. So it calls out for even more need of advancement, so think of it the same problems with 3D plus.
How much battery life do consumers want? Well, you can never have too much battery life. So anything you can do to help push that higher people welcome, and especially if you're taking them into more common silicon conductors, which we do‑‑fewer redundant circuits, which we eliminate, and things like that.
In terms of our volume producible silicon, when I say "Soon…" I'm referring to the volume producible silicon that we'll be delivering in the fourth quarter to our first commercial handset, chipset customer. It has the potential to not only satisfy their application, but additional applications as well. We'll continue to add silicon Jim to that, to continue to advance the capabilities of the silicon. It will just be an ongoing type development kind of private activity, but again what's nice is in the fourth quarter we'll be actually able to show people, "Hey, here's volume producible silicon." It will answer a lot of questions I think some people have about, "Can you guys really do what you say you can, and can you do it in a practical way?" Other people have obviously been willing to make that leap of faith; others will want to see that.
In terms of the D2D and what it adds is we get a meaningful increase in royalty‑‑I don't want to go into the exact rates, but from our first chipset customer mobile phone, our chipset customer we get a meaningful increase in royalty when they ship D2P with D2D. My expectation is that over time we'll see a blend of both companies who want to use chips to D2P, and other companies who decide they want to use both. Of course we'll continue to evolve the technology to keep giving people every reason to want to use both of our technologies, because they both can do things together that separately people would find more difficult to achieve.
So, I'll take the next question please.
Operator: OK, next Phil Anderson with Pinnacle Fund. Mr. Anderson your line is open, please pose your question?
Phil Anderson: Hi Jeff! How are you?
Jeff Parker: Hi Phil, good.
Philip Anderson: Good. If I heard you clearly in your prepared remarks, you said that the current cellular OEM customer to whom we will be begin to flow product in the fourth quarter this year, has mid to low single digit market share in 3G now, is that what you said?
Jeff Parker: What I said is that based on the customers they currently have, which are both Tier‑1 and Tier‑2 handset OEMs…
Philip Anderson: Right.
Jeff Parker: ... and the volumes that they're shipping and they're continued‑what I think they're going to be as they continue to move forward, that by the end of next year I believe they'll be able to get up into mid to single‑mid to high single digit 3G market penetration‑yes.
Philip Anderson: I see. The 500 million unit forecast, is that a forecast for the market for 2009 or is that for 2008?
Jeff Parker: Phil, that's a good question, I think it's 2009. I don't have those charts right in front of me right now.
Philip Anderson: Right.
Jeff Parker: I think its 2009, but I don't recall.
Philip Anderson: Well, what is this your next year? If it's 500 million units, and say they can get an 8% share; that would be 40 million units a year.
Jeff Parker: Exactly.
Philip Anderson: Are they shipping their product into which our technology is incorporated, to more than one handset cellular OEM?
Jeff Parker: Yes.
Philip Anderson: I see.
Parker: Yes, we will be included in one or more platforms that they
offer their products. Therefore, previous conversations I think we've had,
we've mentioned that typically the way that this industry works is a handset
OEM will source a platform from a chipset company, and then they'll build multiple
models of handsets off that platform.
So that's how they end up with multiple handsets, and in this case they also have multiple customers doing multiple handsets from their platforms.
Philip Anderson: So this platform into which we're incorporating is Tweet if you will, for multiple customers, just to pull some names down at the arrow. They could be shipping platforms to Nokia; they could be shipping them to Motorola, to Ericson, to whom ever is out there, which is basically you said a branded OEM, an assembler from components which they make a cell phone.
Jeff Parker: Right. These are known OEM names; that I think pretty much anybody who knows the handset face would recognize those names.
Philip Anderson: Right. Last question, are we going to be ... How much of the first customer's 3G handset business do you think we're likely to get?
Parker: It will be a ramp, but I can tell you that we can deliver the
type of solutions that I believe we can deliver. I think we will get volume,
the majority of their business, and if we're fortunate maybe we get all of it.
I think it just depends on how quickly they ramp; how quickly they ramp their inventory that's already been committed. We'll continue to advance our own chip set implementations to also continue to make it more and more attractive, but the goal of being to earn all their business. I think they certainly have the attitude of giving us that opportunity.
Philip Anderson: A couple of points; it maybe helpful or appreciated if the company were to announce when it begins to ship the silicon, or when the silicon begins to ship in the fourth quarter.
Jeff Parker: Yeah, we will definitely keep the community updated on it. I would certainly consider delivering volume producible silicon to be material, so we'll very likely keep everybody updated on that.
Philip Anderson: Good, great! If you were to think about having a conference call when you sign the next cellular handset customer the way we did when we had the first customer signing, I think that would also be appreciated.
Jeff Parker: Oh, customer on the line; think about that a lot‑‑and look forward to it!
Philip Anderson: [laughs] Yeah, so do I!
Jeff Parker: OK, thank you.
Philip Anderson: OK, thanks a lot.
Operator: We'll go next, John Peacock with MaxTak Partners.
John Peacock: Hey Jeff! How's it going?
Jeff Parker: Hi John! It's going very good, thank you.
John Peacock: Quick one question; Anadigics recently warned about their shipments for the second half of the year, saying that they were going to be down, their 3G power amplifiers were going to be down about 50% for the second half of the year, what do you think of about and does that have anything to do with what you guys are ‑‑ in the future contracts or what's your feeling on that?
Parker: John, I don't really know exactly where their contracts come
from or where they were expecting to get that 3G business. So, it's hard for me
to really comment on why their 3G business is down even though the 3G market, I
think, in general continues to grow, in fact it was just recently that a number
of industry analysts who track the market, slightly increased over the earlier
I don't really know. I just can tell you that we are very excited about our opportunities to start participating in this market and our goal is to pick as much of this market as we can possibly take and to support our customers fullest, because it has been many years in coming to develop the technology that can do what we do and we want to grab the market share while we have such an opportunity. So, I don't know why Anadigics is maybe losing some market share.
John Peacock: OK. All right, great, thanks.
Operator: And ladies and gentlemen, as a reminder it is star‑one for questions; at this time star‑one for questions. And we will go to Joseph Graves, a private investor.
Joseph Graves: Hey, Jeff this is Joe.
Jeff Parker: Hi Joe.
Joseph Graves: Hey, could you give us a little bit of your thoughts on the competitive landscape, specifically as it relates to ParkerVision's key advantage in being a truly digital process relative to a lot of other solutions in 3 and 4G specifically?
Parker: Sure. Obviously, we still have to transmit in analog
waveform. There is some analog in our circuit implementation. But what's very
significant about our approach is that because we don't create a radio signal
early in the process in our circuit, a typical transmitter system creates a
small signal radio transmitted signal and then it has a bunch of gain stages to
make it larger and larger and larger in power until ultimately it leaves the
So, when you make a signal early in the process that's already a modulated radio carrier, you have to be very careful that you keep and preserve all of the after beats of that signal all the way until leaving the antenna.
In our case, because of our digital process, we don't make a signal that's a RF signal that has to be preserved in its linear requirements until the very end of our process. We kind of flip the process around and that gives us the advantage of being able to run circuits that don't have to be nearly as carefully, let's say, produced and handled as a traditional approach and gives us more efficiency, gives us greater linear at greater yield.
One of the things Joe, I am very excited about is I believe when our chips are delivered and people start to see how they actually behave in real products and real volume, they are going to find it's a very different experience than what they have been used to with these kinds of radio circuits, which are pretty ‑‑ the yields have to be careful nurtured to keep them high.
And when you glue together transmitters and power amplifiers that are produced by separate companies using separate semiconductor processes, it's got quite a bit of art to being able to produce that kind of stuff in volumes.
So, I think that not only all the things we have talked about, will be exciting to people, our efficiency, the common silicon semiconductors because of the process of how we make signal using a more digital approach and putting the signal out at the very end of our process, that the beginning the yield and therefore the cost and the time to the factory is going to be a lot more exciting to people than what they are producing today, I think will be another big competitive advantage that we will be able showcase.
Joseph Graves: Yeah, so that's exciting stuff and so in theory it works better in the real world than in the lab?
Jeff Parker: Oh absolutely.
Joseph Graves: And then just from your conversations with customers, you have to be getting to the point where, how much could you deliver. I mean you are talking about some decent numbers here. So it's my understanding that this first customer will actually be receiving chips from IBM's fab, right, is that correct?
Jeff Parker: We will be using IBM's fab for the first chips, yes.
Joseph Graves: All right. So in negotiating with other customers, are there any capacity constraints at all?
Jeff Parker: IBM has good capacity in the process that we've selected, so I think we're in good shape on that right now.
Joseph Graves: So there's a possibility that IBM would be the fab in this project?
Jeff Parker: Oh, yeah. And one of the benefits of our technology is ‑ it is fairly stingy with the silicon. Our silicon chips are pretty small, so we get a lot of chips out of the labor. So, no, there's capacity for us there.
Joseph Graves: All right. Great. Thank you.
Jeff Parker: OK, Joe. Thanks.
Announcer: We'll take a follow up question from Jim Whitten.
Jim Whitten: Hey, Jeff, back again.
Jeff Parker: Yes, Jim?
Whitten: Going back to last spring, we were talking hopefully we
would have this second chip producer out by this time, so I imagine you have a
few problems here. Could you just elucidate a little bit about the problems?
Are they legal? Are they technical? Is it a problem we're a small company
dealing with a big company? Whatever you can on that.
Secondly, when this company is indeed announced, will the name be announced? It seems to be a point of interest with a lot of investors.
Jeff Parker: Sure.
Jim Whitten: And thirdly, will it be possible that the name of the company we signed in December, once we start shipping in the fourth quarter, will their name be able to be announced? Thank you.
Parker: Sure. All of the negotiations I've been involved in for this
type of technology, ITT first and then this commercial chip set company, they
take a life of their own and they take the time that they take and everybody
has their own process.
And all we can do is work it as hard as we can and try to be as accommodating as possible. And because we've made such good progress on the actual technology in the chip sets themselves, I think that's really helpful to us in starting to move some things towards closure.
In terms of whether we'll be able to actually announce the next account, we'd love to be able to do it. We certainly are going to ask for it and we're going to encourage it. When the day is done, it's going to be the decision of the company that the next material is in.
You know, ITT decided it was OK for us to announce their name, and I can tell you that through parts of negotiation, they weren't indicating that, but ultimately decided, OK, we'll do it.
The commercial chip set customer wanted for their own reasons, which are good reasons which I can't talk about today but we will hopefully someday, they decided they wanted to not have their name identified, and they wanted some anonymity for a variety of good reasons.
As far as will we be able to say once they start shipping, I don't know. We'll certainly go and ask them for that. I would think it would be to both party's interests.
However, if for some reason that they decide they still want to remain anonymous, and we start getting volumes of chip revenue out of them, hey, you know, ultimately when the day is done, that's what it's all about is let's bring in revenue and move this company to profitability and grow from there.
On the flip side, I will tell you that it's probably not lost on them that with our technology and their chip set, eventually there are various companies out there that buy hand sets, look at novel features, tear them down, open them up, write reports about them, and publish it.
I mean, you've probably maybe seen reports on the iPhone. It didn't take probably very long since the 3D phone was out, or even the 2D, that people tore them down and wrote reports on them. Wouldn't surprise me if that's what happens ultimately with our technology.
Whether it happens quick or takes a little longer, I don't know, but ultimately, I think it will come out who was the smart forward‑thinking company to adopt our technology early and grab that competitor's advantage and move forward with it.
And hopefully, certainly I'll encourage them to put that flag in that mountain and lay claim to that because we will be forever indebted to them for their leadership, and I hope they lay claim to that, but that'll be up to them. That'll certainly be their decision.
Announcer: Any further questions, Mr. Whitten?
Jim Whitten: No, thank you.
Announcer: And it appears we have no other further questions at this time. Mr. Parker, I'd like to turn it back to you for any additional or closing remarks.
Jeff Parker: Well, just again, as I said in my comments, we really do appreciate your continued support, and as I say, we don't take your support lightly or for granted. And we are working feverishly to move this company forward on multiple fronts and to make this the kind of company that everybody has hoped it can be in terms of its growing shareholder value. So, thank you and have a good evening. Bye‑bye.
And ladies and gentlemen, that does conclude tonight's call. Thank you
for your participation. You may now disconnect.