NPLI discusses hacking impact
In the 10-Q report which NPLI filed today (8/14/2000), I noticed the following interesting remarks. I'm wondering just what percentage of the i-opener units were sold to non-subscribers. NPLI reports 44,000 subscribers; I wonder how many pieces of hardware were sold -- twice or three times that many? Here are the remarks by Netpliance:
"In the past, following the sale of some of our i-opener Internet appliances, we received minimal or no subscriber fees related to these appliances because they had been purchased by persons who reconfigured them for use as a personal computer. We changed our hardware to help prevent such reconfigurations in the future. However, similar tampering with appliances and the related loss of expected subscriber fees could occur again. Due to our pricing structure and the short period of time we have been offering our i- opener service, we have experienced significant operating losses to date. If we are unable to achieve sufficient revenues from subscriber fees and other sources, we may never become profitable and our business model could fail.
"We are not profitable and expect to incur future losses and negative cash flow that could cause our stock price to fall.
"As of June 30, 2000 we had an accumulated deficit of $168.2 million. We have in the past, and may in the future, subsidize the sales price of our i- opener Internet appliance. However, with our i-opener 2001 membership pak, our revised pricing of our i-opener Internet appliance decreases the subsidy that we provide with respect to our customers' purchase of the i-opener Internet appliance. Our pricing structure is subject to additional future revision.
"From January 1, 2000 through June 30, 2000, we generated only $4.2 million in revenues. We will need to generate and sustain dramatically greater revenues from sales of our services if we are to achieve profitability. If we are unable to achieve dramatically greater revenues, our losses will likely continue indefinitely and we may never generate profits. If this occurs, the market price of our common stock could suffer."
The full Netpliance report can be reviewed here: