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July 16, 1997updated 05 Sep 2016 12:56pm


By CBR Staff Writer

Terminal and network computer maker, Network Computing Devices Inc (NCD) has won a big vote of confidence from its largest OEM customer, IBM Corp, which has extended its contract with NCD for a further two years to develop and build its NCs, which IBM calls Network Stations. The contract now runs to the end of the century. The two year extension is to develop the second generation of IBM’s machines. There are no details of those machines – it would have to come from IBM, says NCD. Network Stations have been shipping in volume since the end of March. Meanwhile, the company reported second quarter net profits of $697,000 or $0.04 per share, against losses of $6.0m last time, on revenues up 17.2% at $34.4m. However, the take-up of IBM’s NCs is taking longer than NCD – and most observers, for that matter – thought, and NCD has pushed back its expectations for a ramp up of the IBM-badged machines back a quarter, to the fourth quarter of this year. It said forecast for the next six months started turning downwards in mid-June. It blames numerous factors, including the protracted talks between Microsoft and Citrix Systems Inc over the latter’s licensing of Windows NT and its multi-users extensions to it, plus the lack of multi-user Windows NT until around the end of this year. NCD also says customers’ testing and decision cycle is longer than expected. But, says NCD chairman Bob Gilbertson, the NetPC has not been factor in its marketplace. It says it has not lost any customers to NetPCs, but they are not really out in volume yet. NCD identifies three realms of thin client computing. Network computers, like IBM’s and Sun’s JavaStations; network terminals – hybrid machines that run Java, Windows, Unix and mainframe applications, but that are not particularly optimized for any of them, and finally Windows terminals – thin clients optimized for windows and championed by Microsoft. For its part, NCD reckons network terminals will win, but it is going to manufacture all three. NCD says it intends to continue using Citrix’s ICA protocol, as well as Microsoft’s T.Share protocol and X in its machines in the future to run Windows applications from thin clients. All of NCD’s second quarter year-on-year revenue increase can be attributed to NC shipments, according to chief financial officer Rudy Morin. He also revealed that revenues form shipments to IBM increased from $5.4m in the first quarter, to $8m in the second quarter. He said the company is still on course for the low-end of its dollar volume forecast for the year – $25m. The high-end – $75m will be difficult to achieve, he said. . Net profits in the six months were $1.5m, or $0.08 per share, against losses last time of $6.3m, which included a $6.9m gain on the sale of a product line, on revenues up 4.4% at $65.4m.

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