Parkervision Q3 2005 Earnings
Call
November 07, 2005
Paul Henning, Cameron
Associates - Investor Contact
Cindy Poehlman, Chief
Financial Officer
Jeffrey L. Parker, Chief
Executive Officer
Scott Robertson with
Halpern Capital
John Bucher with Harris
Nesbitt
Wilson Jaeggli with
Southwell Partners
Mark Gaskill with MKG
Financial Group
Operator: Good day, ladies and
gentlemen, and welcome to the third quarter 2005 Parkervision earnings
conference call. My name is Colby and I will be your coordinator for today. I
would now like to turn the presentation over to your host for today’s call, Mr.
Paul Henning. Please proceed, sir.
Paul Henning: Thank you, Colby.
Before we get started I want to remind listeners that this conference call will
contain forward-looking statements which involve known and unknown risks and
uncertainties about our business and the economy and other factors that may
cause actual results to differ materially different from our expected
achievements and anticipated results. Included in these are factors such as the
ability to maintain technological advantages in the marketplace, ability to sufficiently
increase manufacturing capacity to meet demands, achieving timely market
introductions and acceptance of products, maintaining our patent protection and
the availability of capital among others. Given these uncertainties and other
factors for our business, listeners are cautioned not to place undue reliance
on any such forward-looking statements contained in this conference call.
Additional information concerning these and other risks can be found with our
filings with the SEC.
On today’s call we’ll hear first from Cindy Poehlman, Chief
Financial Officer of Parkervision. And then Jeff Parker, the CEO and President
of the company, will discuss the business end and the outlook. Let me first
turn it over to Cindy. Cindy?
Cindy Poehlman: Thank you, Paul, and
thank you for those of you who have joined us this afternoon. As you’re aware,
we released our third quarter results this morning. As usual, I will spend just
a few minutes highlighting items in the quarterly report and then I’ll turn the
call over to our CEO, Jeff Parker, for an update on the business developments.
The operating costs for the third quarter as you may have noted were a little
over $4 million, and this is the first quarter that reflects operations since
our exit from retail in June. As we anticipated, our operating expenses have
been reduced by approximately 25% from previous quarters and this is due to the
reduced staffing and marketing costs related to retail operations.
At the end of last quarter, we reported to you that we were in the
process of working with our channel partners and others to sell our remaining
Wi-Fi finished goods and component inventory. We had reduced those inventories
to their estimated net realizable values in June. You may have noticed that our
revenues from product sales in the third quarter of this year were $430,000
which is higher than our product sales in the first half of 2005. The reason
for this increase is largely due to our conservative revenue recognition
policies for product in the distribution channel in the past.
As you may recall, we only recognize revenue when we’re able to
establish that the retailer has moved the product from their shelf into the
consumer’s hand. This historically was established through retail sell through
reports and in some cases, retail purchase patterns. In the third quarter as a
result of terminating our retail distribution agreements, we were able to
recognize revenue also based on expiration of the retailer or distributor’s
right to return products, in addition to those other methods. This resulted in
somewhat of a catch-up of revenue recognition for products shipped through the
channel.
In addition to the increased product revenue, you’ll also notice
that we’ve reflected positive margins as approximately $91,000 or 21% for the
quarter. This is reflective of the mix of sales through retail versus wholesale
channels. We had estimated at the end of second quarter when we reduced our
inventories that a higher number of these units would be moving through
wholesale as opposed to the retail channels. As a result for this quarter we
had a higher average selling price than anticipated, resulting in some positive
margins.
At the end of the quarter we have approximately $295,000 remaining
in deferred revenue on the balance sheet. This reflects all remaining product
in the channel. You should expect that over the next quarter or so this
deferred revenue will be reduced to 0 as we either recognize revenue based on
additional expirations of rights to return and/or possibly refund remaining
channel partners for product that they may yet return. Any returned product
will be moved through a wholesaler under an agreement that’s already in place.
So we have no concerns about any remaining unsold product inventory.
Turning to the balance sheet for just a moment., you can see that
our cash and short-term investments are approximately $14.5 million at the end
of this quarter. This reflects cash usage of about $4.5 million for the quarter
which is exactly in line with our expectations. You may recall from last
quarter’s conference call that we indicated our third quarter would reflect
some negative cash impact from the retail exit, primarily payment of employee
severance benefits of nearly $600,000 that were accrued in the second quarter
but paid out in the third. Based on our reduced operating expenses, we are
comfortable that our cash position will allow us to continue to execute on our
business plan. Our first showing in business relationships we believe will
largely dictate our future capital needs. And on that note I will turn the call
over to our CEO, Jeff Parker to provide an update on our business activities.
Jeff Parker: Well, good afternoon.
And thank you, Cindy. I want to thank everyone for joining us on our call
today. We are speaking from
More importantly, we’re also proceeding on a variety of fronts
with top-tier OEMs. We’ve had a number of initial meetings this quarter with
prospective OEM partners as well as numerous follow on meetings to continue
discussions with others. We continue to have ongoing dialogues with literally
every OEM with whom we have met. With several OEMs, our discussions have
progressed beyond our technology and its capabilities and to how best to frame
an initial business relationship. As you might expect, a business relationship
can take different forms. It can involve multiple components depending on the
structure and the business objectives of our potential partners. And as in any
undertaking, the final elements tend to take the longest. As I stated in my
last conference call, my own personal goal has been to close our first OEM
agreement by the end of this year.
The balance that we are working to achieve is to provide the best
possible position for the first movers without unnecessarily limiting the
opportunity that this company has worked so hard to develop. It’s very exciting
that we’ve evolved our offering to be in a position where we have attracted the
attentions of multiple top-tier handset partners. What you should take away is
that we are not holding out for the “perfect deal” but we are looking to
structure a deal that’s best suited to maximize the opportunity for
ParkerVision’s future growth and that is fair and equitable to the first OEM or
two. I hope we can achieve those delicate balances yet this year. That still
remains our goal.
Our first deal we believe will undoubtedly help drive momentum for
additional partnerships which is another reason why it’s so important that we
don’t find ourselves in the situation that we can’t fully capitalize on such an
important opportunity that this company has worked so hard and so long to
create. We understand that we’re in a marathon, not a sprint, and that
long-term success in our current and future markets will demand a consistent
and thoughtful approach to our business dealings. So I want to take and expand
on that a bit by providing some context and perspective on that topic. There’s
three things I would like to expand on in our conversation today. #1, a little
bit more about our technology; #2, the markets that it serves; and #3, why we
believe it’s an idea whose time has absolutely come.
Some of you may have noticed that we recently updated our Web site
to better reflect the focus of our company. We have framed our fundamental
technology as energy signal processing, or ESP. ESP is the fundamental
technology from which our D2D and D2P technologies have evolved -- the umbrella
over our technology so to speak. ESP is not an incremental twist on a legacy
approach, but rather a total departure that enables a fresh approach for the
next generation of wireless digital communication. ESP when used as the basis
for the RF transceiver is not bound by the same limitations as the legacy
analog approaches that have come before it. To the RF designer that is hindered
by the limitations of legacy analog electronics, it will appear that we are
“breaking the RF rules.” It is important for them to understand how our ESP
technology will liberate them and their products from some of the boundaries
that have been imposed by the century-old analog circuit architectures.
For our OEM prospects, breaking free from the old RF rules means
giving up the preconceived notion that certain benefits can only be achieved at
the expense of other important features. As example, today’s analog RF
technology forces compromises between the quality of the RF signal and the
amount of power required for the analog circuits. ESP technology achieves RF
signal quality beyond what is practically achievable in analog while using a
fraction of the power due to its digital processing architecture. Maintaining
quality performance over real-world operating conditions such as temperature
ranges, voltage ranges that you will encounter in a batterypowered product, and
other conditions in the real world use of a product, is a real challenge for
OEMs on both the engineering and the production fronts.
Our ESP technology provides a more stable and predictable RF
platform. It helps time-tomarket for designers and reliability for
manufacturing. For our current and future investors, it’s important to
understand the scope of the opportunity that ESP provides. To achieve real
adoption by OEMs from a new entrant such as Parkervision, the technology has to
provide a quantum leap in important benefits over current solutions that they
are using. ESP enables this level of improvements as OEMs endeavor to provide
the next generation of products and services. If you’ve not done so yet, I
encourage you to visit the new ParkerVision web-site, our new campaign is
central to the identity and the future of Parkervision. We will be adding a
significant amount of content to our web-site the balance of this year. We will
explain in more detail how ESP technology liberates product designers from the
many tradeoffs that are required using the analog RF architectures of today.
Regarding the markets, frankly, there isn’t an application that
uses an RF transceiver that cannot benefit from ESP technology. We have
initially targeted the 3G cellular market, where the legacy analog transceivers
have truly run out of capacity to meet the needs of this next generation
application. This market is expected to be one of the fastest growing segments
for the foreseeable future with handset shipments for the cellular phone
category forecast to grow to 1 billion units shipped per year in the latter
part of this decade. 3G is the convergence of voice and data networks that are
being deployed now. Its widespread adoption is definitely a question of when,
not if. And the speed of adoption and profitability of these networks will be
influenced by factors such as long battery life, true broadband connectivity in
both directions -from the handset and the base station -- and ubiquitous
coverage. Achieving all of these features will have the consumer using a single
portable wireless device as a one-stop communicator.
However, there are some important gaps in achieving those goals.
And ParkerVision’s ESP technology helps fill those gaps and in no small
measure. The effectiveness and application of our technology is not an issue.
The market has reached a critical juncture for a number of reasons. #1,
successful migration to 3G and beyond will require more robust performance and
reliability than is found in today’s analog transceiver architectures; #2, OEMs
and network providers alike are seeking the best approach to improving
performance, maximizing the services they can provide and gaining a competitive
advantage in their market segments. And thirdly, as usage skyrockets, customers
are demanding greater functionality, better features and more reliability in
their wireless phones. Legacy analog technologies have reached a point of
diminishing returns and cannot meet these challenges gracefully, and in many
cases, not at all.
We believe meeting these challenges requires breaking the current
rules of RF and our ESP technology does just that. We believe we’ve reached an
inflection point, an inflection point where our technology and expertise can
make a fundamental difference in the development of our wireless world. We are
truly at the cusp of the next generation of wireless communications but all of
us at Parkervision know that success does not come overnight and changing the
rules of RF is an ongoing process.
We are proud of our progress, we are focused on our goals and we
fully appreciate the many challenges ahead. And now, I’d like to open this up
for questions. So, Colby, if we could begin taking questions that would be
great.
Operator: Your first question
comes from the line of Scott Robertson with Halpern Capital. Please proceed.
Scott Robertson: Good afternoon, Jeff.
Jeff Parker: Hello, Scott.
Scott Robertson: Just a quick question
regarding obviously -- with the new coverage, we put out some of the feedback
and not necessarily feedback I agree with, but -- believes you’re holding out
the technology or the license of the technology or basically deal with an OEM
for the big Tier-1 OEMs, the big deal -- at the expense of maybe there’s some
Tier-2s out there that would be willing to go forward today. But you’d want the
first mover to be one of these top-tier, huge, PR-machine-type OEMs. If you
could just comment on that briefly and then I’ll have one more observation
after that.
Jeff Parker: Okay. Sure. We have been in dialogue with --
of the top 10 handset OEMs, we’re in dialogue with half of those -- maybe --
with some of the more recent additional conversations even a little bit more
than that. Scott, and to our audience, we are not holding out our first deal
for any particular -- a showcase OEM or a trophy OEM so to speak. We’re working
with the OEMs who we approached first who happened to be Tier 1. They were open
to the idea. They were open to looking at the technology and frankly they moved
through the process of looking at the technology rapidly and into the business
dialogue quickly. And the ones we’ve been speaking to the longest which happen
to be Tier 1 OEMs have just been the ones that have been moving down the path
the fastest.
Would OEMs of maybe smaller companies move more quickly, demand
less from our company? We can speculate. I don’t know. But we’ve been fortunate
to have the OEMs that I think the investment community -- if I could put the
names out there, which they’re confidential, I can’t. But if you had the names
-- and everybody, I think, knows who the top 10 OEMs are in the handset space
-- would be excited for us and our ability to build value from those
relationships would hope that that’s who we would go after. Certainly the
technology is worthy of that type of relationship. And the technology can
deliver a lot of benefits to clearly any OEM but including and especially the
top ones who are trying to keep and maintain and perhaps some of them, expand
their market share.
Scott Robertson: Yes. I agree with that
and in fact I often think some of the investors are too focused in on the
tier-1s when in the 3G world, I would argue that the top 3 OEMs are not what I
would consider the top players in 3G today. They essentially gave that market
-- or gave other entrants into that market years ago because they didn’t want
to play in it because they couldn’t do it in volume.
So, just to throw a name out, an NEC, I consider a home-run-type
OEM. And certainly they are within the top 10. So I’m glad to hear the full top
10 is being discussed with.
Jeff Parker: We are working the
balance between wanting to give the first movers every opportunity and every
reason to want to do business with us and to take that step forward with a new
entrant on the scene, which is ParkerVision. And yet we’ve obviously got to be
cautious that we don’t provide any features in our agreements that keep us out
of the opportunity to do business with others for too long or we will find that
we may have made one nice step forward only to be locked out of the bigger
market for a time period that could be real minimizing to building the kind of
value we can build here.
Scott Robertson: Okay.
Jeff Parker: I believe reasonable people will come to the
right balance. And I believe we will get there.
Scott Robertson: Okay.
Jeff Parker: You have a follow on?
Scott Robertson: One -- yes. Just more
of an observation, maybe to try and find a way to address this. As I talk to
clients, there’s a group out there that really understands conceptually what
the D2P architecture can do today and where it’s designed and kind of where it’s
going. And obviously nobody can look at the patents today because they’re not
public information. But from a conceptual standpoint, to understand what it
will do.
And then there just seems to be a gigantic group of investors or
interested parties -- even some self-proclaimed RF engineering experts -- who I
just don’t think understand what the D2P -- IC or D2P semiconductor solution
would do. They typically classify it as a power amplifier, totally forgetting
the fact that it has the transmitter portion included in it as a single unified
operation
and that the roadmap in my opinion will also at some point include
full transceiver functionality all bundled together in a single unified
operation. And I’m wondering if there’s a way we can more effectively get
people to understand that this is not a power amplifier -
Jeff Parker: Right. We -
Scott Robertson: -- it’s not -- because
they talk about the market size, and yes, power amplifier market’s about $1
billion. And in the future it’ll be about $1 billion. And they -- so they say
well, that’s a small market when they’re forgetting the transceiver market has
to be included in with that. And if you could do a single unified operation,
that’s really where OEMs want to go.
Jeff Parker: Sure. Well, couple of
comments on that. First of all, we will be giving a lot of additional
information on our Web site over the coming months that will help people get
their arms around what is it that we do that’s unique and beneficial and that
is not achievable -- at least not in practical terms that we’re aware of -- by using the old legacy architectures. I’m
asked all the time to try to come up with something that’s a good analogy of
what we’ve developed in this umbrella of ESP.
And the analogy that comes to mind -- I remember the first time
that I heard a CD music player, which has DSP -- digital signal processing --
in the bass band audio. And I didn’t care what you would spend in money for
tape decks or LPs or whatever your medium was of putting music through a
speaker, but all the analog processing -- no matter how much money you spent
that came before it, always had a certain amount of background noise and hum
and hiss. And when you heard your first CD, it was like, wow, listen to that.
It sounded like you were there at the symphony. And then of course we’ve
watched over the years what’s happened with DSPs and their ability to process
that type of information in a way that for any money in analog you couldn’t
come even close to duplicating the experience or the performance. This is what
our ESP technology is going to do and is starting to do already for radio
transceivers.
Scott Robertson: Okay.
Jeff Parker: So when people figure
out how to transform analog functions to digital processed functions, what you
can do and the quality you can achieve and the -- kind of the old “rules” that
you can break are significant. And we will be addressing this on our web-site.
We’ll be sharing more with people to try to help them get their arms around
that. And I guess the only other comment I’ll make is, there are people who are
looking at our technology who want to believe and who approach it with the
glass is half-full, help me fill it up the rest of the way so I can understand
and benefit from hearing what the latest technology advances are. And there are
other people who don’t want to believe. And frankly, those are people that it
doesn’t make a difference what we say or what the facts are, they’re going to
come up with their own agendas and that’s fine.
But I can tell you that in the important -- the most important
space for the company today -which are the OEMs, the people who write their
opinions with checks, cash dollars that come to our coffers -- we have had no
pushback. We have had nobody who doesn’t want to engage us in some way to try
to figure out how they can benefit from this technology. So in that space,
which is where we’re spending 99.9% of our time, we’re making great strides.
And frankly there aren’t enough hours in the day or days in the week to keep up
with all of that interest and activity because it’s all over the globe. That’s
why we’re excited. That’s why we’re energized. That’s why our team is excited,
because they see that. And they see that coming from companies who have plenty
of people knocking on their door to do business with them. So if they don’t see
something special with what ParkerVision’s bringing, I assure you, they
wouldn’t be spending all the time they’re spending with us. Thanks for your
questions. Next question, please.
Operator: Your next question
comes from the line of John Bucher with Harris Nesbitt. Please proceed.
John Bucher: Yes, John Bucher,
Harris Nesbitt. Thank you. Jeffrey, just wondering -- yes, I understand that
you have a much more comprehensive architecture that you’re applying here. But
do you think that the -- some of the first commercial opportunities might be in
the power amplifier space? And could that lead potentially to a more
comprehensive adoption? In other words, could the power amplifier be sort of a
Trojan horse or do you expect that your first commercial opportunities are
going to be a more comprehensive transceiver?
Jeff Parker: No. I -- John, I think
that’s a good question. I think you’re correct in your -- what I think your
assumption is. Our first opportunities -- the ones we’re working on the most
closely right now are in the transmit side. And I think what Scott in the
previous question was trying to help people understand is that the transmit
side of what we do is all the way from the base band processor function all the
way to the antenna. So it’s a more comprehensive function than just the power
amp and there are a lot of challenges and compromises and engineering
difficulties between that base band data and that antenna that makes our D2P
function very valuable solution to a lot of OEMs and especially the ones who
are trying to do 3G and now they’re looking at 3 1/2 G and beyond.
But I also would agree that that is an excellent Trojan horse or
so far it appears to be an excellent Trojan horse for our receiver technology
where people are looking at trying to understand, okay, if you can do this for
me on the transmit side by using a digital architecture, what do -- let’s go
back and take a look at what you guys have been doing on the receive side. And
I will tell you, to that end, some of the OEMs who we’ve been speaking to have
actually taken some of our Wi-Fi products and tested them and studied what
their performance results are and who benchmark those against what they consider
to be excellent RF analog front ends that we just run rings around in
performance have been the most active in saying, well, wait a minute. We don’t
just want to talk to you about the transmit side, we also want to talk to you
about the receive side. And our only caveat to that is that our team is largely
focused on the transmit technology and getting that to market and making sure
that we satisfy all the momentum we’ve built up there. And that the receive
side will, in our opinion, come as a commercialization reality for -- at least
for the cellular space behind the transmit side.
John Bucher: And any other -- I
understand that you’ve got to be focused here but any other market
opportunities? I mean, clearly the 3G cellular device opportunity is massive, but
any other market opportunities that you see?
Jeff Parker: There are and some of
those have been brought to our attention through some of the dialogues we’ve
had with some of these OEMs who have business divisions that are either in
complementary spaces or maybe in slightly different spaces but spaces where
maybe they’re trying to borrow components that they’ve used in the past from
one application for another. There’s nothing right now that I’m really ready to
talk about because it’s a balancing act between making sure we get all the way
through the first sales cycle with these first OEMs on what we’ve put forth and
what they’ve got a strong interest in before we start opening up the
opportunities.
But I will say this, there are some fundamental building blocks of
our technology that will apply nicely to some other market opportunities and
we’re just not quite ready to start talking about those. But there is some very
nice synergies between the mobile handset application and some other related
and unrelated opportunities that we should be able to leverage this technology
into.
John Bucher: Thank you very much.
Jeff Parker: Thank you. Next
question, please.
Operator: Your next question
comes from the line of Wilson Jaeggli with Southwell Partners. Please proceed.
Wilson Jaeggli: Hi Jeff. You mentioned
here I believe that you have moved beyond the technology consideration in your
negotiations with some and you’re trying to claim more framework business
relationships. Does that mean in a sense -- I mean, that whoever you’re dealing
with here have come to some acceptance of your design?
Jeff Parker: Yes.
Wilson Jaeggli: And -- okay.
Jeff Parker: It does.
Wilson Jaeggli: And -
Jeff Parker: What has happened is we
have some demonstration platforms that allow OEMs to drill down into the
technology pretty deeply. And of course the chicken and the egg that you’re
trying to work as a new entrant into a market is to develop implementations
that fit their needs but you of course can’t completely finish those
implementations off until they give you feedback and you know exactly how they
want to use it. So we went in earlier this year explaining that we didn’t know
if we were too early for them to look at the technology or not but this is what
our chicken and egg was, what we’re trying to solve for. And some of the early
conversations they were able to see enough technology that they said, okay,
we’ve seen enough. We’re ready to talk about how we’d like to apply the
technology in our business. And what kind of business relationship we could
create.
Wilson Jaeggli: Has anyone built an
actual handset -- I mean, in other words, taking it out of the lab as such and
then built a handset format and used it (inaudible - cross talk) --?
Jeff Parker: Some of those
activities are under way at this time. And I’m not at liberty to go into which
standard or which OEM and those specifics. But what they have done is they’ve
been able to test the technology on all of the same test gear that they use to
test the transmit chains of their existing handsets. And one of the things I’ll
be doing at AeA tomorrow is showing many of the printouts from the Agilent test
gear that’s used in this industry -- it’s not the only brand, but it’s majority
of it -- that OEMs are looking at -- what are they looking at? Why are they
getting excited? What does the traditional transmit chain deliver and why are
-- what are we delivering that gets their attention? We’ll be going through
that at some of these conferences tomorrow and the next day.
Wilson Jaeggli: Well, good. I’m out
here in
Jeff Parker: Great.
Wilson Jaeggli: The level at which
you’re discussing with these OEMs, I mean is this the level of senior
management and design that can create a change in their basic cell phone
design?
Jeff Parker: We’ve had the good
fortune earlier this year of having introductions at some of the OEMs at very
senior levels. And so those were decision-makers who were able to kind of rally
their troops to take a look at something, drilled down into it relatively
quickly and then to start talking to us about how this can benefit them and
what kind of business relationship they’re interested in. I don’t know this for
a fact but I think some of our early conversations -- at least my suspicion --
and some of the positive results that we had from those stimulated other OEMs
to start looking at this in areas where we didn’t have perhaps quite the same
senior level connections that we had at the first ones. It’s a small,
incestuous industry as all of these spaces are. And it seems like everybody
kind of knows what most everybody is doing. And so those resulted in us getting
invited to come in and demo our technology and some of the other
OEMs. And -- although we didn’t have the same senior sponsorship
at some of the later ones, we got into dialogues with people who are
responsible for what’s the next generation of technology platform going to be
for certain handsets and how are they going to build it. And how are they going
to integrate it and how are they going to compete against things that are
coming on the market. And it started to kind of feed on itself.
And this is why I said in my conversation earlier that the
balancing act we’ve got is to make sure that whatever we do -- securing and
announcing our first one or two relationships will surely help speed up the
desire for the next ones to want to get involved in doing relationships with
our company as well. And the first one or two are always the most difficult and
then once those get done then it’s -- everybody wants to be involved. And what
we are not wanting to have happen here is that we finally get that opportunity
to get people to start adopting this technology and because of some contractual
agreements that we’re held away from doing that for some unreasonable time
period or some unreasonable condition that doesn’t make it viable for other OEM
opportunities and we find ourselves pushing away the rest of the industry in a
way that we don’t think is consistent with building the opportunity that we
have in front of us. I’m quite prepared to go toe to toe with anybody to
explain why this is a best-in-class technology for where OEMs are going now.
And if you really believe you have the best-in-class technology, which this is,
then you better figure out a way not just to get it to the first -- or first
and second OEMs but beyond that in a way that you’re not going to push them off
and prevent yourself from exploring the opportunities.
Wilson Jaeggli: Right. That’s easy to
understand. Well, keep up the good work. Thanks.
Jeff Parker: Thank you.
Operator: Your next question
comes from the line of Mark Gaskill with MKG Financial Group. Please proceed.
Mark Gaskill: Hey, Jeff.
Jeff Parker: Good afternoon.
Mark Gaskill: Quick question. In
talking with the OEMs, are we looking at potential multiple relationships here
or are we looking at potentially starting off with a single relationship and
some protection for a certain period of time before others would be able to
come in? I mean, just -
Jeff Parker: Well, our goal -
Mark Gaskill: -- trying to get an
idea on the pace in terms of what we might be looking at.
Jeff Parker: Right. Our goal is to
be able to have the technology adopted by multiple OEMs at a reasonable pace.
The chicken and the egg that you work through is -- obviously the first mover
or the first mover or two feel they’re taking the most risk and that they’re
going to be working the most closely with the company to make sure that we
understand their needs which are going to resemble their competitors’ needs an
awful lot. And that there’s some benefit for that. And so we’re trying to work
through how to make that benefit available but not in a time frame that --
keeping us -- or not with the feature that would keep us away from allowing
others to adopt relatively shortly thereafter. And we think we have some good
ideas on how to make a balanced, win-win situation for that need. But as I’ve
told people before there’s two signatures at the bottom of the page and I only
control one. So we’re doing the best we can.
The best I can tell you is the dialogues are very active and there
certainly seems to be activity that indicate people really want to make it
work. They want to find the relationship and they want -- and they understand
this is not a one-trick pony ParkerVision. This technology of ours, which is a
great solution for what people need to do in terms of efficiency increases and
smaller form factors and multi-modes of operation in 3G. I mean, if people like
it for 3G, they’re going to like it even more for 3 1/2. And even more for 4G
and again, at AeA conferences tomorrow and the next day, we’ll explain more of
that but in a nutshell, all these cellular generations that are coming on the
market and beyond, they’re trying to pack more users and more data rates to
sell more features, and to do that, these analog circuits are becoming more and
more inefficient. And the more data, the more densely the spectrum is trying to
be used, the higher the peak to average power ratio is to these RF wave forms,
which is what the result is of more data, the better Parkervision looks.
So, the balance is that I think people are trying to find great
deals for themselves to start with, which I don’t blame them, but also I think
they believe -- and I hope they believe that this isn’t going to be the first
-- the only relationship with our company. We think there’ll be many iterations
of this technology and many forms of this technology that will have long
enduring relationships. And so hopefully we can find a good start to these
relationships that’ll also lead to many follow-on opportunities.
Mark Gaskill: Are you -- on the other
side of that story, are you finding that some are somewhat concerned that they’ve
looked at the technology, they like what they see, and obviously if someone
else picks it up -- a competitor, that obviously if it works over there,
they’re going to want it to work for themselves as well?
Jeff Parker: That’s our goal. That’s
our goal. Our goal is to -- well, it’s -- I think I understand your question.
Is your question --?
Mark Gaskill: The chicken or the egg
as you were saying. I mean -- in other words, I like the technology. I can’t
quite figure out how to make it work but if one of my competitors comes in and
they can figure out how to make it work then that may give them the leg up. And
we all know what that -- what the industry looks like.
Jeff Parker: Sure. (inaudible -
cross talk).
Mark Gaskill: I don’t want Verizon
having it over here and Qualcomm not having it over there, et cetera, et
cetera.
Jeff Parker: Right. Right. No, it’s
a somewhat multi-dimensional issue to deal with but I don’t believe that -- we
won’t be the first company to have figured out how to get through that.
Mark Gaskill: Sure.
Jeff Parker: Other companies have
gotten through it. We’ll get through it. I mean, to be frank with you, if we
weren’t operating in a public company environment and someone said to me, hey,
how is the momentum going along? I’d say, I couldn’t be happier. We are
operating in a public company environment. I’ve made the statement my goal is
to close these first -- this first one before the end of the year. It’s still
my goal. Don’t know if we’ll get there but that’s my goal. And so it puts a
little bit of an unnatural mist frankly on some of the negotiation that we’re
doing. But that’s okay. The public company environment has also been very good
to helping keep this company funded and giving us the opportunity to do what
we’ve done. So, it’s a balance in life.
Mark Gaskill: And the key is you
can’t be happier, right?
Jeff Parker: We’re very -- we have
-- every OEM we have approached with this piece of technology without exception
has engaged us in an active dialogue. Some are still looking at the technology.
Some are still drilling down deeper. But a number of them are not.
And I can tell you that’s a very different experience than we had
when we first tried to roll out our D to D, where people took a look at it and
said, eh, it doesn’t quite fit my needs right now. So I couldn’t be happier. I
think we’re being given the opportunity to succeed.
Mark Gaskill: Okay, thanks, Jeff.
Jeff Parker: Thank you.
Operator: Your final question
comes from the line of Scott Robertson, Halpern Capital - Analyst. Please
proceed.
Scott Robertson: Hey, Jeff, just one
quick follow-up. Clearly you have a dedicated effort on these top OEMs on the
wireless handsets base and then probably also have some dialogue on the Wi-Fi
side but I’m wondering how much or if you plan to put any push into the
wireless network operator side. Because my experience with the wireless
industry over the last seven or eight years, I watched NTT Dokomo (ph) have an
advanced amount of influence on how NEC, companies like Sharp, design their
handsets. They told them what they wanted and those companies responded by
giving them what NTT asked for. And then NTT of course sells them through their
network and services. And I just believe that the operators have massive
influence with what gets built. Also on the base station side, which quite
honestly is I think a market for the future.
Jeff Parker: Well, Scott, it’s funny
you should mention that. And I’m not -- there isn’t a lot of detail I can give,
but I will tell you that we have had some others also think that this company
is now ready to have dialogues and presentations and explanations to network
providers. I do believe that before too much more time goes on, those conversations
will be added to the ones we’re having with OEMs. And I also think that the
timing is good because today we have a lot we can share with network providers
about how we can really help many of the goals that they’re trying to achieve,
whether it’s better mobile equipment that they’re selling and why it’s better.
Whether it’s higher data rates from the handset back to the base, whether it’s
battery life, whether longer-term, when they want to look at our receiver
technology we can give them fewer dropped calls, better handoffs. There is a
lot for us to talk to a network provider about. And we will likely start those
dialogues in the very near future. Okay, yes, thank you.
Scott Robertson: That’s great.
Jeff Parker: That’s a great question
and that is a very good place for us to also be exposing or promoting our
technology. Well, I appreciate everybody taking the time who was on this call
today to hear an update on our company. I look forward to seeing many of you at
AeA tomorrow and the next day. And please, again, keep an eye on our Web site
as you’ll see much more information that will be added between now and the end
of the year that I hope will continue to give you a lot of good insight into
why we have a best-in-class technology and how we intend to make shareholder
value out of that technology. And I wish you a good evening. Thank you very
much. Bye-bye.
Operator: Thank you for your
participation in today’s conference. This concludes the presentation. You may
now disconnect. Good day.