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Message: Mezzo Scenarios

Re: Mezzo Scenarios/LL

posted on Mar 22, 2008 11:54AM

Let's look at the positive, particularly the financial impact.

If the new system marketed by Mezzo is an Edig variation, then the relationship is solid and we continue to see growth resulting from Mezzo's participation.

If the new version as stated in the latest PR is not an Edig modification, then we may eventually lose the current business or may continue to offer our Evu along with other IFE products that will be marketed by Mezzo as an option.

Profit wise, the units sold by Mezzo are substantially lower than units sold directly by Edig. In addition, direct sales also may involve an amount of service revenue making direct sales transactions more attractive. Considering our direct sales progress to date, with several airlines and with the embedded system soon to launch, in the long run it may be to our advantage to aggressively solicit more direct sales and fewer distributor sales.

Personally, long term it may be to our benefit to only sell direct, the end result being significant gross margin improvements.

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