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To: Sector Investor who wrote (1359)9/8/2002 10:56:49 AM
From: David Semoreson
   of 6947
 
Sector, nice find as always! Do you read this to say that KVH hardware will be used for Defense Dept maritime communications? If so, why wouldn't KVH be saying so?

Cheers,
David

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To: David Semoreson who wrote (1360)9/8/2002 12:15:35 PM
From: The Ox
   of 6947
 
Lower end competition starting to pick up. Of course this type of solution needs to find a friendly "cloud" to communicate:

Message 17966416

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To: David Semoreson who wrote (1360)9/8/2002 2:21:04 PM
From: Sector Investor
   of 6947
 
<<Do you read this to say that KVH hardware will be used for Defense Dept maritime communications?>>

Well, the actual P/R from GCS doesn't say military. It says"

<<GCS is offering the KVH TracPhone F77 voice/fax/data terminal and airtime services through several land earth station operators to individuals and maritime businesses in the United States and around the world. >>


However, the potential is obviously there.


GCS wins the contract for INMARSAT EQUIPMENT AND AIRTIME SERVICES FOR A PERIOD OF TEN YEARS, then immediately signs KVH to provide Inmarsat F77 Phone and Service.

Now, the military hardware and service is surely different from the Commercial versions, so I'm sure some changes would be required to supply military equipment and service.

But, let's also take a look beyond just the immediate GCS announcement.

GCS also provides Mobile Emergency Response Systems. Take a look at the picture of the truck, with the 1.5 meter antenna.
globalcoms.com



GCS also provides Communications Solutions For Emergency and Disaster Response. Take a look at the SUV with the big antenna dome.
globalcoms.com


Can you envision the low-profile antenna and TracNet on these vehicles?

And as far as why they didn't mention this, well, perhaps they aren't ready. Perhaps they need to make changes to existing equipment before they say anything. Perhaps the recent vacations in August also delayed things. Perhaps additional things are brewing involving unnanounced products. Who can say?

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To: Sector Investor who wrote (1362)9/8/2002 3:29:20 PM
From: Sector Investor
   of 6947
 
Also, take a look at the applications GCS shows in this link. KVH communications technology could improve all of GCS's offerings. No wonder GCS is interested.

globalcoms.com

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To: david james who started this subject9/8/2002 4:41:44 PM
From: Sector Investor
   of 6947
 
Bears come back to win! <VBG>

KVH's Inmarsat news is being reported in lots of places.

SatPhoneStore
satphonestore.com

at RemoteSatellite.Com
remotesatellite.com

Reseller Channels
phoneplusmag.com

at MegaYacht.com
megayacht.com

at Marinelog.com
marinelog.com

at SkyBroadband.com
skybroadband.info


and TONS of KVH products offered at Concord Marine Electronics
concordelectronics.com

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To: Sector Investor who wrote (1362)9/9/2002 9:19:37 AM
From: David Semoreson
   of 6947
 
It doesn't "say" military but the events certainly imply it. Sector, your research and insight is truly invaluable ... thanks again.

David

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To: David Semoreson who wrote (1365)9/9/2002 11:06:01 AM
From: Sector Investor
   of 6947
 
KVH's Inmarsat business is still in it's infancy. There are lots of opportunities, and KVH will get it's share of them.

What truly amazes me is how many significant opportunities they have, and in very diversified market segments too. They are making progress in all of them too, which is good to see.

Historically, R&D used to be between 10%-12% of revenue, with spurts into the mid-high teens or low 20%s. At this time two years ago they were in the 12% range. Then, when they went after the Mobile Broadband and Optical opportunities, R&D went way up into the low-mid 20s. This recent spurt is now winding down. Note how quickly it dropped after the last spurt in 1999.

Here are R&D percentages of revenue the past 12 quarters

1999 Q3 - 24.2%
1999 Q4 - 20.4%

2000 Q1 - 18.9%
2000 Q2 - 12.8%
2000 Q3 - 11.8%
2000 Q4 - 10.5%

2001 Q1 - 21.4%
2001 Q2 - 28.9%
2001 Q3 - 21.7%
2001 Q4 - 24.5%

2002 Q1 - 24.2%
2002 Q2 - 19.2%

Martin said in the 2001 Needham presentation that KVH's target level of R&D is 12% (slide #35). We should see R&D start to drop back towards historic levels starting this quarter.

That drop, along with the higher top line is what is about to make them profitable again - with several new products and larger markets heading into 2003.

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To: Sector Investor who wrote (1366)9/9/2002 2:12:18 PM
From: Sector Investor
   of 6947
 
Myths and Realities about 40G Optical Technology

<<The rationale is straight-forward: Higher bit rates per wavelength allow more services with less equipment. In addition, the reduction in the number of components at 40G will consume less space and power as well as improve reliability.>>

<<Fatter pipes mean fewer ports and thus fewer costly electrical and optical components in the terminal and regenerator equipment.

Less components potentially also means fewer faults and easier sparing. Add to this the associated reductions in physical space and power consumption. These reductions will translate directly to cost savings for the service provider at constrained central office locations.

Finally, it's much easier to operate and maintain a fat pipe compared to multiple thin pipes.>>

<< This has lead many to back up the most prevailing myth surrounding 40G: "chromatic dispersion in optical fibers will prohibit cost-effective long haul 40G systems". NOTHING COULD BE MORE WRONG.

The reality is that chromatic dispersion counteracts non-linear effects in the fiber and as such facilitates 40G over long distances when combined with well-known in-line dispersion compensating modules (DCM)!
>>

<<Today, optical fibers are fabricated with very low PMD, and around 90% of post-1994 deployed fiber routes have sufficiently low PMD to allow 40G to be transmitted over more than 1,000 km. >>


The full paper here:
mintera.com

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To: Sector Investor who wrote (1367)9/9/2002 3:13:17 PM
From: Sector Investor
   of 6947
 
This is a response to Yahoda's post on Yahoo! I can't seem to get longer posts to work there.


<<Hi Sector,

Can the intermittent increases in R&D expenses as a % of revenues be explained by funding received specifically for R&D (e.g. kvh.com or at least development (e.g. kvh.com
How are such funds treated ? as revenues and the actual expense as R&D?>>

To try to answer that, first you need to see R&D percentages of revenue going back to 1997. I'm not sure about the accounting treatment, but the net effect is a reduction on R&D expense.


1997 Q1 - 10.2%
1997 Q2 - 11.0%
1997 Q3 - 11.8%
1997 Q4 - 16.2%

1998 Q1 - 20.8%
1998 Q2 - 18.3%
1998 Q3 - 17.1%
1998 Q4 - 22.2%

1999 Q1 - 14.6%
1999 Q2 - 15.9%
1999 Q3 - 24.2%
1999 Q4 - 20.4%

2000 Q1 - 18.9%
2000 Q2 - 12.8%
2000 Q3 - 11.8%
2000 Q4 - 10.5%

2001 Q1 - 21.4%
2001 Q2 - 28.9%
2001 Q3 - 21.7%
2001 Q4 - 24.5%

2002 Q1 - 24.2%
2002 Q2 - 19.2%

Note that early 1997 R&D levels were under 12%.

The rise beginning in Q4 1997 through Q1 2000 is clearly a direct effect of the acquisition of the FOG unit from Andrew Corp, which closed in Q3 1997. It's clear from looking at these numbers that KVH spent 2 1/2 years completing the development of their optical technology and the integration of the new technology into their new products. While some of that R&D might have been funded, much probably was not.

Call this the period of Digestion and Incubation.

Levels declined briefly in 2000 back to 1997 levels, when KVH turned profitable again.

Then Martin announced their twin Initiatives for Mobile Broadband and 40Gbps Optical components. As reported the Mobile Broadband development is now complete and the Optical, which also is close, has been slowed down a bit due to the Telecom downturn.

Call this the period of "Preparing for Prime time"

R&D for these initiatives should now decline going forward. The L-3 win should also directly reduce R&D going forward. So, I think we will see a nice reduction in the last half of 2002.

In fact, we were told that in the Q2 CC:

"R&D expense is forecast to decrease for the remainder of the year, as project spending begins to decline, and increased customer funded engineering begins to offset internal spending."

Starting in 2003 KVH enters "Prime Time".

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To: Sector Investor who wrote (1366)9/10/2002 10:11:20 AM
From: Robert G. Harrell
   of 6947
 
Sector, I took a small position in KVHI a couple weeks ago when a bottom fish bid at $6.35 filled, so I'm now a very junior member of the club.
Perhaps you may recall several months ago I asked about the in flight TV provided by JetBlue. Apparently it is a joint venture with Harris Corp whose interest JBLU just bought.
biz.yahoo.com
Do you know anything about their product and if it presents possible competition to the roof top antenna product? I'll gladly research this further but don't want to re-invent the wheel if you've already done the research.
Bob

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