|<<Do you agree with my math here?>>|
Well, the market opportunity you outlined is for the IMU portion of the JDAM guidance system. The IMU is just one component in the system, but the most expensive one.
The CC transcript that I just posted confirms your $3,000 retail number, but that is for a single axis DSP FOG, and I think for small quantities. As you said, an IMU needs three FOGs (also 3 accelerometers), but only one set of electronics, case and connectors, so it is reasonable to expect that their costs would be lower than a straight 3X multiple. Also, at these volumes, there should be economies of scale.
As far as the current competitor gyro being $10,000, I did find a link from 2001 that seemed to indicate that price, but I don't know what the current price might be.
But your basic premise is correct. This is a new product which is not yet announced, so it obviously is not contributing to current revenue. However, while the future opportunity may be large, the near term opportunity seems to be for a second source vendor, not the whole enchilada. Even so, the immediate opportunity is probably in the hundreds of units per month. The military expended over 1/3 of their inventory in Afghanistan, and there appears to be some urgency to increase production to restore the inventory, hence the opportunity to second source.
Still, at those numbers, even 100 units per QUARTER would about match their current revenue from all other sources, so this is indeed a great opportunity. And of course Needham's current projections do not include ANY IMU revenue in either 2002 or 2003, so they would have to revise their projections after any kind of significant win in this area.