We first heard about POET looking to join with a Strategic Partner during Mika’s visit to Toronto in the summer. That desire was confirmed at the AGM. My understanding is that one reason they were interested in signing a deal (with indications that it would be exclusive) with a Strategic Partner (for the dielectric waveguide) was for the cash to apply toward the development/production costs of the full blown transceivers to completion under the POET roof.

So when SE makes this statement:

Very interesting comment about they could create sales today but at $2 per unit they would be giving away their technology where they have all the pieces to sell units for $400 so that is a decision they have made to defer sales today for bigger sales in the near future

That could be a comment regarding what the partner wanted to pay for the multiplexer /demultiplexer. POET has stated that their costs are less than $1 to produce the mux/demux and one would assume the buyer wants the added benefits of passive optical alignment (lenseless) configuration.

Apparently according to SE’s post POET is still looking for partnerships but they don’t want to give away the technology today when they will begin selling the ROSA and TOSA next year. So they appear to be going after better conditions..ie multiple partners as opposed to one. And then there is India with the potential for a cash deal for the military applications?

So I support POET in getting the best deal possible without selling the future as it is future revenue that will drive the share price. A bad deal today would I expect have some short term gain attached to it but maybe not as analyst may view that as a poor decision in terms of limiting the DCF part of the calculation.

I posed the question of whether POET might be better off to just do the Intel thing and just sell optical engine chip sets since they offer the greatest margins so maybe upfront cash does not have the same degree of importance today? That being said judging by the pictorial representations in the CP it appears that the POET single mode duplex QSFP CWDM transceiver design combines both mux and demux on the same die representing a more compact footprint and a lower cost than what is offered with TOSA and ROSA.

The AGM CP provided insight into POETs cost for the quad filter (mux/demux) of less than $1 and quotes the cost for an InP Photonics thin filter as $20. That information was not provided in the R&R presentation probably because it should be confidential and might be the driver behind someone wanting to get it for $2?