From Sparky’s vantage point, whether or not a small company that’s introducing a new high-tech product survives or fails all boils down to unit sales.
In TGTL’s case, on the cost side of the company’s profit equation higher unit sales would surely reduce general & administrative costs, at least as a percentage of sales; and through economies of scale, higher sales would also measurable slice production costs, at least on a per unit basis.
And on the revenue side of this same equation, higher unit sales not only enhance the likelihood of much better deals on popular games, but they also assure much higher after-sale revenues overall, particularly since many of the units sold will no doubt include some sort of monthly service plan options.
That having been said, Sparky thinks it’s important to note that in three recent press releases Tiger Telematics has already announced distribution agreements involving over one million units. Here’s a quick review.
In June, TGTL announced it had signed a letter of intent with Auckland-based Renaissance Corp, a respected marketer and distributor of high tech electronic specialty products, wherein Renaissance plans to distribute an estimated 150,000 Gizmondo units throughout New Zealand & Australia.
In July TGTL announced arrangements it reached with Minnesota-based Redline Marketing and Texas-based Tartan Sales, wherein together these sizable marketing firms plan to sell an estimated 800,000 Gizmondo units in throughout parts of the US, Canada, and Mexico.
And on most-recently, on September 7th, TGTL announced an agreement it reached with Playcom Software Vertriebs GmBH, a leading German games wholesaler and distributor, wherein Play-com will be Gizmondo's exclusive distributor in Germany & Austria. This latest sales order involves an estimated 120,000 units, as well as related Gizmondo accessories.
Adding up the above estimated unit sales numbers, they total 1,070,000 units, and that sum doesn’t even include the upcoming Toys R Us deal, which never contained any unit sales info. Nor does this sum include any Asian sales, which Sparky predicts will be a huge number.
Considering that TGTL hasn’t even announced a specific Gizmondo launch date yet, Sparky thinks that all this activity on the order front is a very good thing; for in the final tally, it truly is:
All About Unit Sales!
Sincerely,
Sparky (09/09/2004)